As you already know, there are certain situations that require the provision of collateral to support a promissory note in a loan agreement. The note in this case is referred to as a secured promissory note. In this case you will need to obtain a secured promissory note template in order to include all the necessary features. A secured promissory note contains most of the features found in an ordinary promissory note. However it also includes an additional section with details on the security provided. Just like ordinary templates, the secured templates can be drawn by professionals or downloaded online which is the cheaper option.
If you are looking for a secured promissory note template these are some of the contents that you should expect. It should provide for the names of both the creditor and the debtor. It should also provide for the inclusion of the total sum and the interest charged per annum on the unpaid balance. It should also detail how the payments should be effected. In most cases, these are usually applied on the interest amount then on the principle. The template should also provide information on situations that would require instant settlement. These might include breach of security interests or guarantees offered as collateral security for the note. This can also result from failure to make payments for a given time after the due date. Insolvency and death can also be provided as reasons for this.
The secured promissory note template should also provide information on where the payments should be made. Apart from this, there are certain legal terms that should be provided for by the template. First it should indicate that all parties involved in the agreement shall remain bound until the note is fully paid. This will mean that any indulgence and modifications by the holder can only be effected through writing. Finally the template should have a section for inclusion of the date and signatures of all the involved parties. The template can also state the rights of the parties involved in the agreement. These can be either successive or cumulative. Since it’s hard to find a template that meets all the needs of your agreement, you can use different templates to make your own document. This should not be hard as there are so many sites and blogs providing these templates free online. Otherwise you can just hire a professional to draft the document for you.