What is a Master Promissory Note?

Flickr user Juli

When you take out any loan, the lender will ask you to sign a promissory note stating that you agree to the terms and conditions of the loan, and that you promise to repay the loan with interest within the agreed time. This is no casual note. A promissory note is a legally binding contract between you and the lender.

The Master Promissory Note and Federal Student Loans

The Master Promissory Note or MPN is a specific type of promissory note that you sign when you take out a federal student loan. You will be required to sign this legal document before you receive your funds. When you sign the MPN, you are in effect promising to abide by the terms and conditions of the agreement, and repay your student loans with all accrued interest and other applicable fees.

The Master Promissory Note will typically include all the information you need regarding your loan. In the MPN you will find details about:

  • The terms and conditions governing your loan
  • How the interest on your loan is calculated
  • Standard repayment information
  • Alternative repayment options
  • Options for deferring or cancelling your loan
  • Forgiveness options
  • Your rights and responsibilities as a borrower

The most important thing to remember about the MPN is that it is legally binding. Once you sign this document, you are legally bound to honor your commitment. To avoid any problems down the line, you must go through the details carefully and make sure you understand and agree with the terms and conditions before you sign it.

Use College Raptor’s free Student Loan Finder to compare lenders and interest rates side by side!


Lender Rates (APR) Eligibility
Earnest company logo.
Variable APR: 1.88% - 5.64%*
Fixed APR: 2.44% - 5.79%*
Undergraduate and Graduate
Lendkey company logo.
Variable APR: 1.90% - 5.25%*
Fixed APR: 2.49% - 7.75%*
Undergraduate, Graduate, Parent PLUS
Credible company logo.
Variable APR: 1.80% - 9.99%*
Fixed APR: 2.15% - 9.99%*
Undergraduate and Graduate
Laurel road company logo.
Variable APR: 1.64% - 5.65%*
Fixed APR: 2.25% - 5.75%*
Undergraduate and Graduate
Commonbond company logo.
Variable APR: 1.96% - 7.02%*
Fixed APR: 2.59% - 6.94%*
Undergraduate, Graduate, Parent PLUS
Fixed APR: 2.44% - 5.97%*
Undergraduate, Graduate, Parent PLUS
VISIT ISL Education Lending
Variable APR: 1.87% – 5.33%**
Fixed APR: 2.30% – 5.96%**
Undergraduate, Graduate, Parent PLUS
VISIT Nelnet
Variable APR: 2.94% - 4.84%*
Fixed APR: 2.99% - 4.94%*
Undergraduate and Graduate
VISIT College Ave
Variable APR: 1.86% - 6.01%*
Fixed APR: 2.47% - 5.99%*
Undergraduate and Graduate, Parent PLUS

*APR includes a 0.25% interest rate reduction for enrollment in automatic payments.

**Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.

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