It is a document that is signed between borrower and lender that says the borrower promises to pay the lender the borrowed amount as per the terms mentioned in the note.\u00a0<\/b><\/p>

It acts as a security for the lender as a promise to pay by the borrower, if the borrower is unable to pay the lender according to the terms in the note the lender can either seize the collateral or take legal action to recover the debt from the borrower.<\/b><\/p>

Though the promissory notes are customizable depending upon the transaction type, there are a few things that are common in each note like the loan terms, repayment schedule, date of issuance, calculation of interest amount, calculation of fees, and collateral, obligations of the borrowers, etc.<\/b><\/p>

There are two types of notes, secured notes, and unsecured notes. On a secured note, the borrower borrows the money from the lender keeping collateral.\u00a0<\/b><\/p>

If the borrower is unable to pay the borrowed amount, the collateral is then handed over to the lender to recover the borrowed amount.\u00a0<\/b><\/p>

In an unsecured note, the lender is lending the money to the borrower without any asset or collateral.\u00a0<\/b><\/p>

If the borrower is unable to pay the lender according to the terms in the note, the lender would have to file in court or follow other legal processes<\/b><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t