Types of Private Loans
Secured Notes – Backed by collateral, providing the lender increased assurance of return on the loan amount and interest. The most common form of collateral for a secured note is real estate. However, notes can also be secured by non-real estate assets.
Unsecured Notes – Not backed by collateral, but you might consider an unsecured note for a friend or a non-disqualified relative. Remember, unsecured notes almost always present a higher risk, though sometimes for a higher reward, than secured notes.