Definition: A promissory note is simply a "promise to pay." It contains a maker (the payor) and a lender (the payee). An unsecured promissory note is not attached to anything, the loan is made based on the maker's ability to repay. A secured promissory note may also be made based on the maker's ability to repay, but it is secured by a thing of value such as a car or a house.
If your home is used for security and you default on the promissory note, you could lose your home. Most promissory notes attached to property are secured by either a trust deed, also known as a deed of trust, a mortgage or a land contract, and those instruments are recorded in the public records. Promissory notes are often unrecorded.
Also Known As: prom note
Common Misspellings: promisory note
