A Georgia promissory note is a written contract memorializing the details of a loan between two parties. Promissory notes add structure and clarity to a loan agreement, and they help the lender receive payments on time.
These documents should include information about both parties, including their names and addresses, the date of the loan, the loan amount, interest, and payment plan. Additionally, clauses that further explain the terms of the loan are helpful, such as how much interest is due in case the borrower defaults, attorney fees, and acceleration.
As promissory notes are considered contracts, they are subject to Georgia laws on contracts, collections, and interest rates on loans. In this state, they can be secured or unsecured.
Georgia Secured Promissory Note
The main difference between secured and unsecured loans is that to enter into a secured loan in Georgia, the borrower must offer some form of collateral. Should the borrower default on the loan, the lender may legally take possession of the collateral, which is typically something of value. Both parties must agree on the item offered before signing the contract.
When drafting a secured promissory note in Georgia, in addition to the information listed above, the form should reflect that the promissory is secured. Also, the particulars of the collateral offered should be detailed.
Click here to download a free Georgia promissory note form.
Georgia Unsecured Promissory Note
Unsecured promissory notes, on the other hand, are not backed by collateral. As such, they typically have higher interest rates, and they are usually given to borrowers that are considered trustworthy. This type of loan is also more common among close friends and family members.
The main difference when drafting an unsecured promissory note is that it will not include mention of any collateral.
Click here to download a free unsecured promissory note template Georgia.