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A promissory note is a document that outlines a borrower's agreement to repay borrowed money, with a defined repayment structure. There are two types: secured and unsecured. A secured promissory note includes collateral, allowing the lender to claim an asset if payment is not made. In contrast, an unsecured note does not involve collateral, which means the lender must pursue legal action if the borrower defaults. Promissory notes offer several benefits, such as certainty of payment, marketability, and judicial certainty under the Uniform Commercial Code (UCC). For a note to be negotiable, the borrower's obligation must be unconditional and have a specified due date, minimizing ambiguity about the amount owed.