A promissory note is apromise from one party to pay another party. In real estate investing,it is when one party agrees to pay another party a sum of money under set terms. The note can be between one party and a lender,or between two individuals.
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What is a promissory note?
A promissory note is a written and signed unconditional promise to pay a specific sum of money upon demand or on a certain date. The party that makes the promise is called the maker, and the party that initially receives the note is the payee. If a note is negotiable, the payee may transfer the note to another who is called a holder.
What is a’promissory note’?
What is a ‘Promissory Note’. A promissory note typically contains all the terms pertaining to the indebtedness, such as the principal amount, interest rate, maturity date, date and place of issuance, and issuer’s signature.
Can a promissory note be canceled by the payee?
A promissory note is usually held by the party owed money; once the debt has been fully discharged, it must be canceled by the payee and returned to the issuer. Homeowners usually think of their mortgage as an obligation to repay the money they borrowed to buy their residence.
Do you have to sign a promissory note for student loans?
Student Loan Promissory Notes. Many people sign their first promissory notes as part of the process of getting a student loan. Private lenders typically require students to sign promissory notes for each separate loan that they take out.