Promissory Notes and Promissory Notes and LoansLoans

Promissory Notes and LoansPromissory Notes and Loans Promissory Note: Written agreement to pay Promissory Note: Written agreement to pay

back money at a given time. Lender and back money at a given time. Lender and LendeeLendee

CollateralCollateral Anything that has value and that can be used to Anything that has value and that can be used to

secure the note or ensure that you’ll pay money secure the note or ensure that you’ll pay money backback

Usually banks want up to the value of the loanUsually banks want up to the value of the loan CosignerCosigner

Bank/Person may ask that someone else signs the Bank/Person may ask that someone else signs the note with you. They are responsible for loan toonote with you. They are responsible for loan too

Needed for people w/ bad credit or have little credit Needed for people w/ bad credit or have little credit historyhistory

Promissory Notes and LoansPromissory Notes and Loans

DefaultDefault Failing to make a payment. Hurts your Failing to make a payment. Hurts your

credit rating. Lender could foreclose on credit rating. Lender could foreclose on loanloan

Missing a PaymentMissing a Payment Contact the lender immediately. More Contact the lender immediately. More

than likely you’ll get an extension or than likely you’ll get an extension or deferment for period of timedeferment for period of time

Credit Report?Credit Report?

Promissory Notes and LoansPromissory Notes and Loans

Defaulting on a LoanDefaulting on a Loan Lender will request all of the money Lender will request all of the money

due. If you can’t pay, items will be due. If you can’t pay, items will be repossessed and then sold so they can repossessed and then sold so they can get money.get money.

If they make more than owed, you get If they make more than owed, you get the money. If it doesn’t cover, legal the money. If it doesn’t cover, legal action to garnish your wages.action to garnish your wages.

Promissory Notes and LoansPromissory Notes and Loans

Get it in WritingGet it in Writing The most important thing to have if The most important thing to have if

lending or barrowing money.lending or barrowing money. State who loans, receives, how much State who loans, receives, how much

and when to pay back. IF there is and when to pay back. IF there is interest, it should be noted.interest, it should be noted.

Loan CalculatorsLoan Calculators

Car, Home, Remodel, etc.