Sample Note

All About Writing Notes & Sample Notices

Secured Promissory Note Sample

This type of note is a written document that is backed by a property as a collateral or security for the loan amount. In a secured promissory note, it is stated that if the borrower is failing to repay the loan amount on the due date, the lender will then take your property. There are many lenders who never pay the loan amount without any security and is usually used in commercial or real estate loans. Secured promissory a bit stressing on the part of the borrower because if due to any reason the borrower fails to pay off the loan amount on the spelled out date of the note, he/she will lose the right of possession of the property.

It is important to keep the terms and conditions of the secured promissory note a little flexible. Always try to sign a promissory note having some flexible circumstances in which the borrower will consider as a defaulter. A promissory note, once signed by both the parties will be considered as a legal document and both parties will be then bound to abide its terms and conditions. A secured promissory note never includes the details of the collateral and is similar to a simple promissory note however have an additional agreement based on the details of collateral. For example, if in a secured promissory note, a car is offered as a collateral, the secured agreement will be based on the details of the car like its model, date of manufacture, time of usage and the current value.

A sample Secured Promissory note

Date —————         Amount—————–              Interest rate————-            Due Date———

For the amount received, the undersigned promises to pay to the order of______________(creditor)____________ the sum of ($____________) Dollars, together with interest at the rate of____% on the unpaid balance. The terms of the promissory note will be valid till (date of creating the note) to (ending date of the note or due date).

This promissory note is secured by an additional agreement that is confirmed by the parties and a conformed copy of the secured agreement is attached to this note and is received by the undersigned. The borrower will be considered as a defaulter if the borrower unable to pay off the amount within 30 days after the due date and the lender will then become a legal owner of the collateral.

The note is created according to the laws of the state and both the parties agree on the terms of the note.

Borrower’s name and signature ——————–

Witness name and signature —————-

Lender’s name and signature —————

Witness name and signature —————-

Guidelines of creating a secured promissory note

  • A secured promissory note is like a simple promissory note that is usually written in a way “I (name of the borrower) is agreeing to pay a sum of (amount in dollars) to (name of the lender) on this (day), (date) and year. At the end of the note there are spaces for signatures of both parties along with their permanent address and a signature of a witness in some cases.
  • For securing a promissory note, you have to write an additional agreement but before creating a securing agreement, discuss the terms with your lender carefully and never sign the one that goes against you or is inflexible.
  • It is good to prepare a secured promissory note by a legal body in order to avoid risks.

Related Notes

  • Personal Promissory Note A Personal Promissory Note is the one used between two parties like friends and family members on a small level with a small amount of loan. As compared to commercial and other types of business related promissory notes, a personal promissory note is not used by people commonly because people usually feel shy in creating some legal documents for personal loans. There is no need to feel shy or unpleasant because a promissory note is just used to eliminate misunderstanding and is good […]
  • Unsecured Promissory Note As the name implies an unsecured promissory note is a promissory note in which a borrower doesn't have to put something that is equal to the value of the loan amount as collateral such as car, house or any other type of property. An unsecured promissory note has also a legal value and one party can sue the other party in court in case of violation of the terms.  Unsecured promissory notes, like simple and personal promissory notes are common for loans in which the parties, the lender […]
  • Simple Promissory Note A simple promissory note is a loan document that shows an agreement between two parties and bounding the lender and the borrower legally. A simple promissory note is based on a number of details of the loan such as the amount of the loan, the names of both the parties, contact information of the parties, applied interest rate and a specific date or due date on which the borrower has to pay back the loan amount to the lender. The purpose of adding a list of information in a simple […]
  • Demand Promissory Note A demand note is a type of promissory note or loan note without any specified time for the repayment of the loan and is held by the lender that he can use it any time and call the borrower for the repayment of a loan.  These notes are provided by the lender in a flexible manner and usually based on a long term in which the lender never asks for the repayment of the loan to borrower unless he needs his money. When the demand notes are created by the loan parties, there is no kind of […]
  • Payment Promissory Note Payment notes are also known as notes payable are a type of contract or agreement that comes into existence between two parties when one party receive a loan from another party for a specific period of time with a due date and with a specific amount of interest rate charged on it annually. Payment notes that are based on a period of one year or less are known as short payment notes while those having a period greater than one year are considered long term payment notes. Payment notes […]

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