Definition: A written promise to repay a debt that is backed by a security interest in identified collateral.
Example
A promissory note is secured by a mortgage on the borrower's real property.
Keep the distinction clear
The note states the debt obligation; the mortgage or other security instrument provides collateral rights. They perform different functions even when signed in the same transaction.
Related terms
Promissory Note · Mortgage · Collateral
Keep studying
References: CFPB: mortgages
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