The Loan Note is also famously known as the promissory note which is a legal piece of document which puts any party under obligation that they have to repay the money to another party from which they have borrowed. An official Loan Note secures the interest rates of both the the borrower and the lender in this case. In order to carry this out, the loan note must give the description of the loan in detail ensuring that these is no misunderstanding of any terms between the lender and the borrower. This article will guide you all that you know about the Loan Note.
All that you need to know about the Loan Note
The Features of Loan Note
A Loan Note lists down the loan agreement date and the parties which are involved and the co-signers of the loan note in their full registered name and their addresses. The Amount of loan is also pen down with its interest rate and the process of calculation for these amounts. The repayment terms are also listed in this document. Moreover the payment installment, the date for payment and other conditions for the borrower’s default and consequences are also noted in this.
The Types of Loan Note
A loan note can be composed in simple language and would still be legal, accepted however if one uses the legal terminology for the Loan Note then that is a safer bet. In easier lending scenarios the forms of the Loan Note can be brought at the supply store which sells office items or can even be purchased online.
The Function of Loan Note
For including veracity to the loan note and to give added security details to both the borrower and lender the loan note must also be signed an impartial witness who has no bias and the best option for this witness in this case is any notary public. A notary will look into the loan note, witness when the note is signed and stamp this note. The transactions are also noted in this loan note.
The Importance of Loan Note
When you bind the contract by signing the loan note you basically are agreeing that you have read and understood all the terms of this document and have no objection in it and are legally bound to carry out all things stated in it. If you are a borrower or a lender you need to read the whole document and then the copies of the signed loan note will be given along with the original piece of this document.
If any property is listed down in the loan note for protection of the loan then this needs to be checked with the filing at the Uniform Commercial Code.