An Illinois unsecured promissory note is a legal agreement between a lender and borrower for an uncollateralized loan, outlining instructions for repayment, including payment frequency, interest rate, penalties for delinquent installments, and the date when the entire balance must be repaid.
Since there is no collateral, lenders issue unsecured loans only to borrowers with a strong credit history or personal trust. It adds structure and legality to the agreement, ensuring timely and consistent payments from the borrower. However, the lender has no immediate way to recover lost money in case of a default on the balance.
