SECURITY AGREEMENT FOR BORROWING MONEY

If you’re thinking of giving someone a loan, or you’re the borrower, a Security Agreement can help guarantee the loan. With a Security Agreement, the borrower offers interest in a piece of personal property that will transfer to the lender if they cannot pay the loan. This can be a great way to entice a lender to make a loan, but the borrower will want to carefully consider the consequences if the loan can’t be paid back. A Security Agreement helps you spell out the terms and get started.

 To customize your agreement, you’ll be asked a series of questions. Think about the following information before starting your document:

• What is the total principal amount of the debt in the original Agreement?
• What property is being offered as collateral in this Agreement?
• Where is the collateral kept?
• Which state’s law will control the Agreement?

A Vehicle Security Agreement ensures that the seller of an automobile is protected by requiring collateral from the buyer in case the buyer defaults on payments.

A General Security Agreement is used to secure a loan and helps ensure that the loan is repaid. Security is personal property that’s put on the line for the loan. If you’re the borrower, the lender gets that property if you don’t make good on the loan. If you’re the lender, you get the reassurance that you’ll receive some compensation even if payments can’t be made.

No, a Security Agreement does not have to be notarized, but it is highly recommended.