Question

When loaning money to two or more co-borrowers on a single promissory note, the lender would be best advised to increase the security on the note by inserting which of the following phrases after the names of the co-borrowers:

A) Personally and corporately
B) Together as individuals
C) Individually and severally
D) Jointly and severally

Answer 1

The lender should insert the phrase 'Jointly and severally' after the names of the co-borrowers.

Step-by-step explanation:

The lender would be best advised to increase the security on the note by inserting the phrase Option D) Jointly and severally after the names of the co-borrowers.

This phrase means that each co-borrower is individually responsible for repaying the entire loan amount. If one co-borrower is unable to repay their portion, the lender can seek repayment from the other co-borrowers.

For example, if two siblings co-borrow a loan and one sibling defaults on their payment, the lender can pursue the other sibling for the full loan amount.