A New Jersey unsecured promissory note is a legal contract between two parties for a loan without collateral, outlining repayment terms, consequences of late payments or default, and protective measures for the lender like delinquency fees and interest rate adjustments up to 16% as per § 31:1-1(a).
Although it doesn’t grant the lender collateral rights, it aims to secure the lender against financial loss, emphasizing the importance of borrower screening for creditworthiness and favoring agreements with known individuals to mitigate risks of non-repayment.
