A promissory note can be utilised by the lender to be discounted through a bank that will remit cash against the promissory note for cash. Normally the promissory note is monetized for the same amount mentioned in the promissory note, deducted by discount fee.
A promissory note is a written document that makes a commitment to repay a loan or debt under certain terms and conditions. The promissory note usually specifies all details within the document. The terms and conditions of a promissory note determine the repayment amounts and the maturity of the debt.
The discount rate applied for a promissory note will depend on certain crucial factors such as the credit rating of the promissory note issuer and his financial position.
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