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A promissory note is a document outlining money borrowed from a lender and the repayment terms. There are two types: secured and unsecured. A secured note requires collateral, meaning the lender can claim an asset if the borrower defaults. In contrast, an unsecured note lacks this assurance, so if the borrower fails to pay, the lender must pursue legal action to recover the debt. Promissory notes offer several benefits, including payment certainty and marketability, governed by the Uniform Commercial Code (UCC). Under UCC rules, the borrower’s obligation must be unconditional and payable at a specified time, which enhances the note's reliability and ease of transfer.