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A promissory note is a document outlining borrowed money and its repayment terms. There are two types: secured and unsecured notes. A secured note ties the loan to an asset or property, which the lender can claim if the borrower defaults. An unsecured note does not involve collateral, requiring the lender to pursue legal action for repayment if necessary. Promissory notes offer several benefits, including guaranteed payment and marketability. Under the Uniform Commercial Code (UCC), they must meet specific requirements for negotiability, such as an unconditional payment obligation and a definite repayment time, reducing ambiguity regarding the amount owed and facilitating smoother transfers.