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A promissory note is a document outlining a loan and its repayment terms. There are two types: secured and unsecured. A secured promissory note allows the lender to claim an asset if the borrower defaults on payment. In contrast, an unsecured promissory note does not provide collateral, meaning the lender must pursue legal action to recover the loan. Promissory notes offer advantages such as payment certainty, marketability, and judicial clarity under the Uniform Commercial Code (UCC). For a note to be negotiable, the borrower's obligation must be unconditional and due at a specific time, reducing ambiguity regarding the amount owed and facilitating easier transfers.