A Michigan unsecured promissory note is a loan agreement where the lender agrees to provide funds to the borrower without requiring any collateral in return. The borrower is obligated to comply with the terms and conditions of the contract, including the payment schedule and interest rate. In the event of a default, the lender can charge the maximum interest allowed by law and accelerate the maturity date.
This type of loan is best suited for situations where the lender and borrower have an established relationship and can trust each other. Lenders, however, must exercise caution in selecting borrowers to avoid the risk of non-payment.
