what is mean by promissory note

A promissory note is a legal document that is used to record a promise made by one party to pay a sum of money to another party at a specific time or on demand. It is a type of financial instrument that is often used in lending and borrowing transactions, and serves as a formal acknowledgment of a debt. A promissory note typically includes details such as the amount of money being borrowed, the interest rate, the repayment schedule, the names and addresses of the parties involved, and any collateral or security that is being pledged as a guarantee of payment. The note may also include provisions for late payment or default, as well as any other terms and conditions that have been agreed upon by the parties. Once signed, a promissory note becomes a legally binding contract, and the borrower is obligated to repay the loan according to the terms specified in the note. In some cases, a promissory note may be transferred or sold to another party, allowing the lender to receive immediate payment for the debt.