In the Ocean State, borrowers and lenders can sign a Rhode Island promissory note to create a legal contract. It can be secured or unsecured, and the promissory note Rhode Island form details the term and interest.
The Rhode Island promissory note also provides the lender with the legal document needed to seek recourse if the borrower stops making payments on the agreement.
Rhode Island Secured Promissory Note
When a promissory note is secured, the agreement includes the borrower offering collateral to the lender to back up the loan.
When you are recording a promissory note template Rhode Island, you must have precise details completed. These help make the document legal. Regarding the loan, the note should include details about:
- Names of the lender and borrower
- Term and interest
- Conditions of the loan
- Fee and default information
- Signatures of lender and borrower
- Signature of witness
Rhode Island Unsecured Promissory Note
An unsecured Rhode Island promissory note does not include collateral. The note could be one between friends or between a lender and a borrower with reliable credit.
When a borrower stops making payments on a promissory note, the lender can go to court to attempt to recoup losses. Lenders should know that a judgment in their favor does not guarantee the borrower will pay. Some lenders might be able to garnish wages, especially if the loan is unsecured.