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A promissory note is a legally binding agreement between a borrower and a lender, detailing the terms for repayment of borrowed money. There are two types of promissory notes: secured and unsecured. An unsecured promissory note does not provide extra protection for the lender if the debt remains unpaid, while a secured note requires collateral, such as an asset of value, to safeguard the lender's investment. In cases of default on an unsecured note, the lender must pursue restitution through legal channels, such as small claims court. The main function of both types is to outline the borrower's commitment to repay the borrowed funds, and the document typically includes details about the borrower.