Note vs Loan

HI can someone help?

I’m trying to determine the different between a note and a loan. Say when a company borrows it can issue a note or a loan. What’s the difference between the 2?

Any comments would be appreciated.


I believe they are the same, though loan is more colloquial language and note tends to be is more legal language. Note generally refers to the “promissory note” or agreement to pay something back. “Loan” just means that there is borrowing and lending going on, and we assume that - if it’s a company - there is some legal and accounting documentation of it.

In treasury circles, a bill is less than a year or two, a note has initial maturity less than 15 years, and a bond is 15+ years.

I wouldn’t be to worried about the distinction. However, you are in Singapore, and it is possible that the laws are written specifically there.

Also it could be that issuing a note means the company borrowed money, issuing a loan might mean (in this context) that the company lent money to someone.

Only difference I can think of is a bond vs bank loan. The latter is often secured, often containing financial and other sorts of covenenants.

A note is a security either registered or eligible for purchase through a 144a, RegS, etc exception; a loan is not a security and is privately traded. Also, a loan will typically get you higher up in the corporate structure.

A note or a loan, both of them refer to a debt owed from the borrower to the lender, however, the loan agreement contains more extensive clauses than the note. Moreover, as I know the promissory note is signed only by the borrower, but the loan agreement by both parties. However, when taking a loan is not so important to know the differences between the loan and note. It’s more necessary to be informed regarding the terms and conditions of the loan. Recently, I applied for an online loan on and my application was accepted. So, before signing the contract I have read carefully all the terms of the loan in order to be sure that all is done according to the law.

This is the correct answer in my experience; however, there could be differences depending on jurisdiction.

Don’t know about this. I would generally disagree, but I think the question needs more context. When you borrow money from a bank to buy a car, you sign a “promissory note”.

I think the difference is a function of legality. If I loan a pencil to somebody, that’s a loan. But there’s no contractual agreement. If I make them sign a “promissory note”, then it becomes a legal instrument.

After I posted that, I realized two things: 1. BChad said it better than I did (as is normally the case), and 2. I was responding to a six-year-old thread.

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In short, a note is evidence of a legal obligation (here: a loan), and a promise to fulfill that obligation (here: repay that loan).

As a moderator, I got a notice about koelek’s reply as being suspicious.