what is a promissory note

[tonny]

I’ve been reading about different financial instruments and came across the term promissory note. From what I understand, it’s a written promise to pay a certain amount of money to someone, but I’m still not clear on the exact details. Can anyone explain what exactly a promissory note is, how it differs from a loan agreement, and in what situations it’s typically used (like business loans or personal lending)? Also, are there any legal requirements or risks involved in issuing one?

 

[robertwilliam]

A promissory note is a document that is written and legally binding and in which one party (the borrower) commits to paying a specific amount of money to another party (the lender) under specified conditions.

 

[Gsusangrey]

A promissory note is a legal document in which one party (the maker or borrower) unconditionally promises in writing to pay another party (the payee or lender) a certain amount of money upon demand or at a predetermined future date.

 

[nikhilrajoria]

A promissory note is a written promise of a specified amount of funds, which must be paid out at a specified time. It contains such information as the borrower, lender, interest rate and terms of payment - which are usually imposed to loans.

 

[Mayank]

A promissory note is a written financial document where one party promises to pay a specific amount of money to another party at a fixed or determinable future date, under agreed terms and conditions.

 

[Jarwish]

A promissory note is a written, signed promise to pay a specific amount of money to a designated person or entity, either on demand or at a future date.