A promissory note allows two parties that agree to a loan to record the exact amount of the loan, when the transaction occurred, and when the lender should receive repayment plus interest. These types of notes remove any confusion from the loaning process, and it can stipulate what asset the borrower would forfeit if they can’t pay.
A Montana promissory note usury rate, or interest rate, is 10% yearly. However, interest rates can go up to 15% per year, according to Montana Code § 31-1-107.
Below are the two types of Montana promissory notes, followed by frequently asked questions.
Montana Secured Promissory Note
A secured Montana promissory note means that the lender will always be guaranteed repayment, whether financial or through one of the borrower’s assets. A promissory note template Montana will have information about which assets the borrower wants to use as a security, should they be unable to pay the loan back.
There are many ways to get a free Montana promissory note. A promissory note Montana form will require the following information:
- The day, month, and year in which the agreement takes place
- Borrower’s full name
- Borrower’s address
- Lender’s full name
- Lender’s full address
- Amount loaned
- Interest rate
- Which of the borrower’s assets will be used as collateral
- Signatures of all parties, usually including a notary public
Montana Unsecured Promissory Note
The borrower and lender will have to fill out the same information on the form. Filling out an unsecured promissory note is a quick and easy process that cements an agreement between the two parties.
Because there’s no security, these types of loans are often riskier for the lender. Unsecured notes are more common between friends and family members.
Since unsecured promissory notes are still legally binding documents, the lender can use them in a small claims court to urge the borrower to repay the amount owed.