In very simple terms, a Promissory Note is a written promise to pay. Sometimes it is called a Note Payable. The Promissory Note is a contract between a lender and a borrower, whereby the borrowers promises to pay the amount borrowed to the lender within a certain period of time with a certain amount of interest. The Note will specifically set forth the amount of the loan, the interest rate, when and where payments are due, the maturity date of the loan and what happens in the event payments are not made. Some notes have a maturity date while other notes are Demand Promissory Notes.
Different forms of Promissory Notes include, Ballon Notes, Term Notes, Installment Notes and Secured Notes.
Definition of Promissory Note.