Personal notarized letter template3/20/2024 ![]() If the borrower defaults on payment completely, the lender can pursue repayment (and collateral repossession, if applicable) via small claims court (a less expensive venue that doesn’t permit attorney representation, thereby eliminating attorney’s fees) for loans under the state limit. If the borrower still fails to make up for the payment, the lender must evaluate the financial viability of initiating legal action. In case of late payment, the lender is required to issue a demand letter requesting the payment and any applicable late fees. If the borrower repays the total amount per the note’s conditions, the lender should provide a loan release form to relieve the borrower of any further obligations related to the note. Generally speaking, there are three potential outcomes once a promissory note is in effect: The borrower could technically ghost when there is no proof that the loan happened. If neither the original nor a copy is present, try and find other ways to prove the agreement (i.e., text exchange). What happens if I lose the original note?Ī copy will suffice if the original is lost. If your borrower expects a large sum of money in the future, one lump sum payment may be more appropriate than installment payments. When determining repayment terms, the lender should consider carefully the borrower’s financial condition and the risks associated with the loan.įor example, if your borrower has low credit, you may opt for a secured promissory note in case the borrower defaults. ![]()
0 Comments
Leave a Reply.AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |