Updated April 08, 2022
A New Jersey unsecured promissory note binds two parties in a contract that states how the borrower will repay a loaned amount of money to a lender. Additionally, the template includes areas for the parties to agree on consequences for being late on payments and/or entering into default. The lender does not receive security in this version. Because of this, the lender is at risk of losing the loaned balance if the borrower cannot recover from entering into default. The best way of preventing this potential scenario is for the lender to screen potential borrowers by ensuring their credit score is strong and by working with friends and family.