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A promissory note is a document outlining borrowed money and its repayment structure, with two types: secured and unsecured. A secured note guarantees repayment with specific collateral, allowing lenders to claim the asset if the borrower defaults. Conversely, an unsecured note does not involve collateral, meaning lenders may need to pursue legal action to recover funds if payments aren't made. Promissory notes offer advantages such as assured payment, marketability, and legal certainty under the Uniform Commercial Code (UCC), which requires the borrower's payment obligation to be unconditional and due by a specific date. This structure enhances the likelihood of collecting the owed amount and facilitates easier transferability.