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A promissory note is a document that outlines a loan agreement between a borrower and a lender, detailing the repayment terms. There are two types of promissory notes: secured and unsecured. A secured note allows the lender to claim an asset if the borrower fails to repay, while an unsecured note does not provide such security, requiring the lender to pursue legal action if the borrower defaults. Promissory notes offer benefits like certainty of payment and marketability, guided by the Uniform Commercial Code (UCC), which requires the borrower to have an unconditional obligation to pay by a specified date. This promotes less ambiguity in repayment amounts and eases the transfer of the note.