A promissory note is a written financial document in which one party, known as the maker, promises to pay a specific amount of money to another party, called the payee, at a designated time or on demand. This note outlines the terms of the loan, including the interest rate, repayment schedule, and any penalties for late payment. Promissory notes are commonly used in various financial transactions, such as personal loans, business loans, and real estate deals. They serve as a legal contract that can be enforced in court if the maker fails to fulfill their payment obligations, providing security for the payee.