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A promissory note is a document outlining money borrowed from a lender and its repayment structure, with two main types: secured and unsecured. A secured note requires collateral, typically an asset or property, which the lender can claim if the borrower fails to repay. In contrast, an unsecured note does not involve collateral, meaning the lender must pursue legal action for recovery if payment is missed. Promissory notes offer several benefits, including certainty of payment, marketability, and judicial integrity as defined by the Uniform Commercial Code (UCC). For a note to be negotiable, the borrower’s obligation must be unconditional and repayable by a specific date, reducing ambiguity regarding the owed amount and enhancing transferability.