The owner of the vehicle, who is borrowing the money, should have the Title Certificate. In some cases, if the owner already is paying on a first loan, and you are lending money as a second lien on the vehicle, then the first lienholder might have the Title Certificate. The borrower would have to contact the first lender to get the Title Certificate.

Be very clear in the writing. A third party must be able to read the note and understand the terms. [5] X Expert Source Lyle Solomon, JDAttorney Expert Interview. 18 August 2021.

Check with your state’s local procedures. For example, in South Dakota, instead of the DMV, you will need to send the Title Certificate and security agreement to the county treasurer in the county where the vehicle owner resides. There is a $10 fee. [7] X Research source In Tennessee, for example, you will need to send the financing statement and Title Certificate to the local County Clerk’s office. There is a fee of $11 for the lien notation and $5. 50 for a state title fee. There also may be a local county fee. [8] X Research source

Include all relevant parties, dates, and amounts to make sure the promissory note is enforceable. [10] X Expert Source Lyle Solomon, JDAttorney Expert Interview. 18 August 2021.

Some online resources exist to help you create your own mortgage agreement. One such resource is Rocket Lawyer, which provides templates that are valid for most U. S. states. You simply identify your state, provide the details of your loan, and the program creates a mortgage document for you. You should have the mortgage witnessed and notarized. In some states, this is a requirement, such that failure to do so will nullify the mortgage. In others, it may not be required but is still a good practice.

For example, in Massachusetts, the loan documents are filed with the Registry of Deeds in the county where the property is located. In Connecticut, mortgages are recorded with the town clerk where the property exists. In New York, you must file the mortgage with the county clerk for the county where the property exists.

Be careful that the individual or company signing the financing statement is the actual owner of the collateral. For example, if you are giving a loan to John Smith, an individual, and John Smith is the president of XYZ Corporation, you will need to identify carefully whether the collateral is owned by John Smith or by XYZ Corporation. The person or company giving the collateral should be the same as the person or company getting the benefit of your loan.

For example, if you intend to secure the loan with a particular photocopy machine that the borrower owns, you should identify it by description, make, model, and even serial number, if possible. On the other hand, if you intend to secure the loan with all of the borrower’s office equipment, you may use a more general description, such as “Equipment. ” Other general descriptive terms that are allowable are “Goods,” “Inventory,” or “Fixtures. ” You can describe intangible business assets as “Accounts,” which includes the borrower’s right to receive payments from its customers, “Chattel paper,” which includes other secured loans that the borrower may have the right to collect, or “General intangibles,” which simply includes other intangible assets that are not covered by the first two categories.

It is a good idea to work with an attorney who is familiar with the laws of the state where you wish to perfect your security interest, in order to be sure that you file appropriately. If you neglect to file your loan documents in the appropriate offices, you may lose your position of priority. The borrower will still owe you the money, but if another lender files in a place where you have not, then that lender may be able to collect the collateral before you.

The financing statement requires you to provide the borrower’s name and address, the lender’s name and address, and a description of the collateral. The description must be specific enough to identify the property for any third party.

As with business loans, you may also perfect your security interest by taking possession or control over the collateral. If using one of these methods, you must do so in a peaceful and lawful manner. You may not break in to someone’s home to take possession of any property or take any action that causes a public disturbance.