An Iowa unsecured promissory note is a borrower’s legal promise to repay an unsecured loan to a moneylender with interest. However, since this type of debt is not backed by collateral, the lender risks losing all the money if the borrower fails to pay back. To minimize this risk, lenders may inspect the borrower’s credit and payment history before approving the loan.
Unfortunately, if the borrower stops paying, the lender may have to resort to debt collectors or legal action. Additionally, the interest rate for unsecured debt is typically higher than secured loans documented in a promissory note.
