Unlike a secured promissory note, an unsecured promissory note is for loans that are not backed by collateral and rely solely on the borrower’s promise to repay the debt.

A promissory note can be secured or unsecured. A secured promissory note explains the collateral, often property, that backs the debt. If the borrower owns a property, it can serve as collateral.

An unsecured promissory note means that the lender did not require collateral for the loan. If you default, the lender's only recourse is to file a lawsuit to enforce the terms of the note.