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A promissory note is a formal agreement where the borrower (buyer) pledges to repay the lender for a loan, such as one million dollars. The note specifies details like the repayment amount, for instance, five thousand dollars monthly, and the interest rate, which may be set at two and a half percent. Payments are typically scheduled for a certain period, often 30 years, with due dates confirmed (e.g., every first of the month). This document serves as a contract outlining the obligations of both the borrower and the lender, ensuring clarity in the terms of the loan agreement.
