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A promissory note is a legally binding agreement between a borrower and a lender detailing the repayment terms for borrowed money. There are two types: secured and unsecured. An unsecured promissory note does not provide the lender with additional protection against non-payment, making it a simple agreement accompanying the loan. In contrast, a secured promissory note includes collateral, such as an automobile or valuable asset, to protect the lender in case of default. If a borrower with an unsecured note fails to repay, the lender must pursue restitution through legal means. The document also outlines the borrower's commitment to repay the borrowed amount.