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A promissory note is a written and signed promise to repay a sum of money in exchange for a loan or other financing. A promissory note typically contains all the terms involved, such as the principal debt amount, interest rate, maturity date, payment schedule, the date and place of issuance, and the issuer's signature.

A simple promissory note might be for a lump sum repayment on a certain date. For example, you lend your friend $1,000 and he agrees to repay you by December 1. The full amount is due on that date, and there is no payment schedule involved.

The promissory note consists of all the conditions, amount, interest rate, dates, and the signature of the person in it. It should be noted that it is not a banknote or currency note.

Writing the promissory note terms First, you'll need the names and addresses of both the lender (or "payee") and the borrower. You should then list the basic promissory note terms and conditions: The amount of money being lent. The interest rate, if you are charging interest.

An unconditional promise to pay a certain amount of money to a named party or the holder of the note, or to deposit that money as such persons direct. A promissory note must be in writing and signed by the maker of the promise.

A) A promissory note generally involves two parties, i.e. a maker (debtor) and a payer (creditor). On the other hand, bills of exchange include a drawer, a drawee and a payee. b) As the bills of exchange introduction above shows, a bill orders the drawee to pay as per the drawer's directions.

Characteristics of promissory note: It should be drawn and signed by the maker. It should be stamped properly. It specifically identifies the name of the maker and payee. The amount that is to be paid should be certain, written in both figures and words.