Promissory note

Promissory note — the loan’s first document: an unconditional written promise to pay, naming parties, principal, interest (stated per period and per year), schedule, default and acceleration clauses, late charges, and venue. Notarized, it becomes a public document — presumed authentic and far stronger in collection. The note is only the promise; tying it to an asset takes the second document (REM or chattel mortgage), and lenders who blur the two write unenforceable loans.

First used in: 4.5 · Private lending: being the bank