Short-term credit instrument consisting of a written promise by one person to pay a specified amount of money to another on demand or at a given future date. Promissory notes were in use in Europe as early as the Renaissance. They are often negotiable and may be secured by the pledge of collateral. The instrument changed substantially during the 20th century, when various clauses were added regarding payment and other provisionsfor example, authorizing the sale of collateral, permitting extensions of time, and allowing acceleration of payment in the event of default. See alsobill of exchange.