Glossary Term: "promissory note"

A promissory note is a legal document representing a promise made by one party (the issuer or maker) to pay a specific sum of money to another party (the payee) at a designated time or on demand. It includes essential details like the amount owed, repayment terms, interest rate (if applicable), and maturity date. This written commitment serves as evidence of a debt or loan agreement and outlines the borrower’s obligation to repay the borrowed amount. Promissory notes are commonly used in various financial transactions, including personal loans, business agreements, and real estate transactions, providing a formal record of the lending arrangement and the terms agreed upon by the parties involved.