How,Promissory,Installment,Not law How A Promissory Installment Note Works
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Typically a promissory installment note includes the terms of the loan, the amount of the loan, what the loan is actually for, the rate of interest, late payment fees, the frequency and amount of installments, etc. However, the law will uphold certain provisions if the borrower defaults on the loan.HOW A PROMISSORY NOTE WORKS A promissory installment note is a legal and binding document allowing corporations and also individuals to secure financing from an independent source other than say a commercial bank. Because of the laws in the United States commercial banks don't have a monopoly on the lending of money. You can obtain a financial loan from a variety of sources and they can secure their loan using a promissory note. Practically anybody can become a money lender.Promissory installment notes are legal debt instruments much the same as a legal IOU. Terms and conditions are drawn-up and mutually agreed upon by both the lender and the individual (or corporation) seeking the loan. The recipient duly dates and signs the promissory note and is from there on legally bound to uphold his or her end of the bargain. Usually money owed from a debtor who flatly refuses to pay the note can be easily collected in a county small claims court. Or, in some instances with a general civil suit. The terms and conditions which were agreed upon at the outset of taking out a loan can oftentimes include things like the specific rate interest, an affordable repayment schedule along with the legal consequences of default due to a failure to uphold the loan obligations.Promissory installment notes are usually used by corporations to generate extra corporate credit when they can no longer secure additional funding say from a commercial bank. Independent lenders who issue these types of notes are allowed by law to sell them to another interested party. An investor can even have these promissory installment notes reviewed by the Securities and Exchange Commission to guarantee that the corporation is in a solid position able to repay its debt.TYPES OF DISCRIMINATIONAnother popular use for promissory installment notes is to secure a mortgage loan for a home when there's not enough credit or even no credit available to them from a commercial lender like a bank. These promissory installment notes are used mainly by individuals who own a small business or are self-employed with a fluctuating income from month to month. However, sometimes creditors and lenders tend to discriminate against these types of individual. So, if say your income were to drop suddenly then creditors will often times use this to discriminate against you even if you can produce a savings account which shows regular and steady savings. For anybody who finds themselves in this type of financial position usually they have no other choice.If you are considering creating a promissory note, then it's a smart move to get it notarized so that the terms and obligations of the note are publicly recorded and legal. By doing so it'll make all of the terms set forth in the note legal and binding.And any deliberate violation and/or underhandedness will NOT be tolerated in a court of law. Article Tags: Promissory Installment Note, Promissory Installment Notes, Promissory Installment, Installment Note, Note Works, Promissory Note, Installment Notes
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