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Seth provides a brief overview of promissory notes, a historical lending instrument used to establish the terms and conditions between a borrower and a lender. He explains that a promissory note details the amount owed by the borrower, typically including any interest payments. Seth highlights the flexibility in structuring these notes, mentioning options such as balloon payments, which involve interest-only payments for a specified period followed by a full balance payment, and straight-line amortization, where fixed payments are made throughout the loan's duration without a balloon payment at the end.