U-Fi by Nelnet was a leading private student loan lender. However, in April 2022, U-Fi was phased out — Nelnet now operates its private student loan and student loan refinancing business under the name Nelnet Bank.
Through Nelnet Bank, customers can borrow money for their undergraduate or graduate degrees, or refinance existing student loans.
Nelnet Bank (formerly U-Fi) student loan refinance review
With Nelnet Bank, you can refinance your loans and select a loan term as long as 25 years. Plus, Nelnet Bank is one of just a few lenders that allow parents to refinance and transfer the loans to the student.
Nelnet Bank student loan refinancing is a good fit for parent PLUS loan borrowers that want to transfer their debt to their child. (Note, however, that doing so will turn a federal student loan into a private one, so make sure it’s the right move for you.)
Nelnet Bank student loan refinance review: The basics
Nelnet Bank is best for parents or borrowers with relatively low loan balances or those that want the longest repayment term possible to reduce their payments.
| APRs | ● Student loan refinancing: ○ Variable: 2.69% to 9.20% (lowest rates include autopay discount) ○ Fixed: 3.49% to 7.44% (lowest rates include autopay discount) |
| Basics | ● Prequalify and check rates without affecting your credit ● Refinance as little as $5,000 ● Maximum loan amounts are based on degree: ○ Undergraduate degrees: $125,000 ○ Graduate, doctorate or law degree: $175,000 ○ Graduate health professions degree: $500,000 |
| Eligibility | ● Must have at least a bachelor’s degree ● You (or your cosigner) must be a U.S. citizen or permanent resident ● You (or your cosigner) must earn at least $36,000 per year ● You (or your cosigner) must have a credit score of 680 or above |
| Applying | ● Option to apply with a cosigner ● No application or origination fees ● Late fee of 5% or $25, whichever is less |
| Repayment | ● No prepayment penalties ● Terms range from five to 25 years ● Cosigner releases available after 24 months ● 0.25% autopay discount |
| Support | ● Hardship forbearance available in two- or three-month increments, for a maximum of 12 months over the life of the loan ● Loan discharges available for cases of death or total and permanent disability |
What to like about Nelnet Bank refinance for student loans
If you have high-interest federal or private student loans, refinancing with Nelnet Bank could help you save money, lower your payments or pay off your debt faster with the following perks:
Parents can transfer parent PLUS loans to students
Millions of parents use parent PLUS loans to help their children pay for their undergraduate education. However, parent PLUS loans have higher interest rates than other federal student loans, and the parent will be solely responsible for their repayment; students have no legal obligation for the debt.
With most refinancing lenders, only the primary borrower can refinance their loans, and the debt cannot be transferred. However, Nelnet Bank is just one of a small number of lenders that allows parent borrowers to refinance — with their child’s consent — and transfer the loans to the child. Going forward, the child will be responsible for repayment, and the parent is no longer obligated to repay the loan.
Cosigner releases available after just 24 months
Adding a cosigner to your refinancing application can be a good way to secure a better interest rate. However, your cosigner may not want to make a long-term commitment. While many lenders offer cosigner releases, they typically require you to make payments for threeor four years before you can apply for a cosigner release. With Nelnet, you may qualify after just 24 months of consecutive, on-time payments.
| What you need to begin the refinancing process with Nelnet Bank |
|---|
| ● Most recent student loan or payoff verification statement for each loan you intend to refinance ● Proof of income, such as two most recent pay stubs ● Cosigner’s information, if applicable |
Noncitizens can apply with a qualifying cosigner
Many lenders require applicants to be citizens or permanent residents to qualify for student loan refinancing. However, Nelnet allows noncitizens to refinance their loans as long as they have a qualifying cosigner who’s a U.S. citizen or permanent resident with a valid Social Security number.
Loan terms as long as 25 years
While most refinancing lenders have maximum repayment terms of 20 years, Nelnet Bank offers terms as long as 25. Opting for a longer term can give you a significantly lower payment — just keep in mind you’ll pay more in interest.
What to keep in mind about Nelnet Bank refinance for student loans
Although Nelnet Bank could be a useful option for some borrowers, it does have some drawbacks compared to other lenders:
Must have a bachelor’s degree to qualify
To qualify for student loan refinancing through Nelnet Bank, you must have at least a bachelor’s degree. If you’re still in school, only have an associate degree or left college before completing a four-year degree, you’ll be ineligible for refinancing.
Fairly low loan maximums
Nelnet Bank’s loan maximums are lower than many other lenders’ limits. Whereas other lenders allow borrowers to refinance their total outstanding balance, Nelnet has caps based on your degree level. For those with undergraduate degrees, the maximum is just $125,000— so if you went to a pricey private school, or otherwise needed to take on a significant amount of debt, you may not be able to refinance all of your debt.
High credit score minimum
The minimum credit score that Nelnet Bank requires is 680. According to Experian, one of the major credit bureaus, that score is in the “good” range; approximately one-third of Americans have scores below that range, making them ineligible for refinancing.
How Nelnet Bank student loan refinance compares
It’s a good idea to shop around and compare offers from multiple refinancing companies. Here’s how Nelnet Bank compares to two other major lenders:
| Nelnet Bank (formerly U-Fi) | MEFA | College Ave | |
|---|---|---|---|
| SLH rating | 4.6/5 | 2.6/5 | 4.2/5 |
| Products | ● Student loan refinancing ● Parent PLUS loan refinancing |
● Student loan refinancing ● Parent PLUS loan refinancing |
● Student loan refinancing |
| Eligibility requirements | ● U.S. citizenship or permanent residency ● 680 credit score ● Bachelor’s degree or higher ● $36,000 income |
● U.S. citizenship or permanent residency ● Six months of timely payments on existing loans ● Established credit history |
● Be 18 years old ● U.S. citizenship, permanent residency or have a SSN and a permanent resident cosigner ● Diploma from Title IV eligible undergraduate or graduate degree programs |
| APRs | Variable starting at 2.69% and fixed starting at 3.49% | Variable starting at 4.80% and fixed starting at 4.45% | Variable starting at 0.94% and fixed starting at 3.24% |
| Minimum loan amount | $5,000 | $10,000 | $5,000 |
| Repayment terms available | 5 to 25 years | 15 years | 15 years |
| Apply with a cosigner | Yes | Yes | Yes |
Is refinancing student loans with Nelnet Bank right for you?
Nelnet Bank could be a good option for parent borrowers that took out parent PLUS loans to pay for their child’s undergraduate degree. With federal loans, you cannot transfer loans to another borrower, but Nelnet Bank allows children to refinance and take over responsibility for the loans. Plus, Nelnet offers long repayment terms, allowing you to pick the term that gives you a monthly payment that fits your budget.
However, Nelnet has strict income and credit requirements, and you must have a bachelor’s degree to qualify. If you don’t meet that criteria, you may need to consider another refinancing lender.
How to apply for refinancing with Nelnet Bank
With Nelnet Bank, you can check available rates with just a soft credit check, which doesn’t hurt your credit. When you find a loan that works for you, you — and your cosigner — can apply for a loan entirely online.
After your loan is approved and you accept the terms, you’ll have three days to change your mind and cancel the loan. Once that three-day window ends, Nelnet Bank will disburse the funds to your lenders and pay off your existing debt.
Nelnet Bank (formerly U-Fi) student loans review
In April 2022, Nelnet Bank launched its student loan program. Under this new initiative, Nelnet Bank issues private student loans to undergraduate and graduate students, and it offers multiple repayment options.
Nelnet Bank student loans are a good fit for borrowers that want to defer payments until after graduation,
Nelnet Bank student loans reviews: The basics
For those that have reached the federal student loan annual or aggregate limits, Nelnet Bank allows you to borrow money to complete your degree and allows you to select a loan term as long as 15 years.
| APRs | ● Private student loan: ○ Variable: 1.26% to 10.40% (lowest rates include autopay discount) ○ Fixed: 3.34% to 11.68% (lowest rates include autopay discount) |
| Basics | ● Prequalify and check rates without affecting your credit ● Undergraduate students can borrow $1,000 to $125,000 ● Loan amounts for graduate students start at $1,000 ○ Graduate or doctorate degrees: $175,000 ○ MBA or graduate law degree: $175,000 ○ Graduate health professions degree: $500,000 |
| Eligibility | ● Borrower (or cosigner) must have a score of 680 or higher ● Borrower (or cosigner) must be a U.S. citizen or permanent resident |
| Applying | ● No application or origination fees ● Late fees are 5% of the late payment amount or $25, whichever is less ● Returned payment fee is $20 |
| Repayment | ● No prepayment penalties ● Repayment terms range from five to 15 years ● Three repayment options: immediate, interest only, and deferred ● 0.25% autopay discount ● Cosigner releases available after 24 months ● No prepayment penalties |
| Support | ● Hardship forbearance available in two- or three-month increments, for a maximum of 12 months over the life of the loan |
What to like about Nelnet Bank student loans
There are many private student loan companies, but here is why Nelnet Bank stands out:
Quick loan processing
With some private student loan lenders, it’s recommended that you apply for a loan months before you need it. But with Nelnet’s quick loan processing times, you can usually get the funds within 10 to 14 days after signing the final loan agreement.
Multiple repayment options
Nelnet Bank has multiple in-school repayment options. If you don’t want to make full payments against the principal and interest while in school, you can opt for an interest-only or deferred plan, which include six-month grace periods.
Cosigner release available after just 24 months
Most college students will need cosigners to qualify for loans. But with Nelnet Bank, you can qualify for a cosigner release after making just 24 full principal and interest payments after entering repayment.
| Can’t find a U.S. citizen or permanent resident or permanent resident cosigner? | Prodigy Finance is among lenders assisting international student borrowers |
| Not attending an eligible degree-granting school? | Check out options for non-degree-seeking student loans |
| Not attending classes at least-half time? | There are lenders with part-time student loan options |
What to keep in mind about Nelnet Bank student loans
Before submitting a loan application, consider these drawbacks to Nelnet Bank’s student loans.
Loan loan maximums
Unlike other lenders — which allow students to borrow up to the total cost of attendance, Nelnet Bank has strict loan maximums. The maximum loan amount for undergraduates is $125,000, and the maximum amount for graduate or law students is $175,000. Those pursuing degrees in medical professions have a higher limit, but other borrowers may find that the caps are too low to cover the full cost of their degrees.
No options for parent loans
Nelnet doesn’t offer parent student loans, so parents or family members who want to borrow on behalf of a child will have to work with another lender.
History of customer complaints
Nelnet Bank is a subsidiary of Nelnet. Unfortunately, Nelnet doesn’t have a stellar reputation in the student loan industry. According to the Consumer Financial Protection Bureau’s 2021 Student Loan Ombudsman Report, 10% of all complaints about private student loans were about Nelnet. Nearly 150 complaints were lodged about the company between Sept. 1, 2020, and Aug. 31, 2021 — the third-highest number of complaints for private student loans.
How Nelnet Bank student loans compare
How does Nelnet Bank’s student loans compare to other leading lenders?
| Nelnet Bank (formerly U-FI) | Citizens Bank | SoFi | |
|---|---|---|---|
| SLH rating | 4.13/5 | 4.31/5 | Not yet rated |
| Loans for… | ● Undergraduate and graduate students | ● Undergraduates and graduate students ● Parent student loans |
● Undergraduate and graduate students ● Parent student loans |
| APRs | Variable starting at 1.26% and fixed starting at 3.34% | Fixed starting at 3.47% | Variable starting at 2.01% and fixed starting at 3.22% |
| Ability to prequalify without affecting credit | No | Yes | Yes |
| Borrowing amount | $1,000 | $1,000 | $0 |
| In-school repayment options | 3 | 3 | 4 |
| Repayment terms | 5 to 15 years | 5, 10, 15 years | 5, 10, 15 years |
| Cosigner release available | Yes — after 24 months of timely payments (and meeting other criteria) | Yes — after 36 months of timely payments (and meeting other criteria) | Yes — after 24 months of timely payments (and meeting other criteria) |
You’ll very likely be better off if you shop around beyond a few lenders. Make sure you learn all about the best options for your specific needs.
Are Nelnet Bank student loans right for you?
Nelnet Bank student loans have competitive rates and multiple repayment options. You can make interest-only payments or defer payments completing until after graduation, and you can choose a loan term as long as 15 years.
However, some borrowers may find Nelnet Bank’s maximum loan limits too strict, and may need to find alternative financing sources. If you need additional money for school, get quotes from top private student loan companies.
How to apply with Nelnet Bank
You can apply for a Nelnet Bank student loan by requesting a rate quote. It doesn’t affect your credit, and you can view available options in just a few minutes. You and your cosigner can apply online, and you can select the best loan options for your needs.
How to contact Nelnet Bank
Nelnet Bank’s customer service team is available via email or phone.
| [email protected] Secure message |
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| Phone | 800-446-4190 | ● Monday through Friday from 7:00 a.m. until 8:00 p.m. CST |
| Nelnet Bank 13907 S. Minuteman Dr, Suite 250 Draper, UT 84020 |
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Frequently asked questions about Nelnet Bank student loans
If you didn’t find your question answered in our Nelnet Bank reviews, check out the following FAQs:
What happened to U-Fi student loans?
As noted above, U-Fi was a division of Nelnet that handled private student loans and student loan refinancing. In April 2022, Nelnet launched Nelnet Bank’s private student loan segment. From that point, all U-Fi loans were actually funded by Nelnet Bank; in addition, all applications after April 11, 2022, are processed through Nelnet Bank.
Is Nelnet Bank good for student loans?
Nelnet Bank can be a good option for borrowers with good to excellent credit — or a qualifying cosigner — who have reached federal loan maximums. Those who need higher loan amounts (such as students that plan to attend law school or medical school) may need to look for another lender that allows them to borrow up to the total cost of attendance.
Do I need a degree to refinance with Nelnet Bank?
With Nelnet Bank, you can only qualify for student loan refinancing if you have a bachelor’s degree. Students still in school, as well as those with associate degrees or who left college before earning a degree, are not eligible.
Methodology for ratings
To come up with our star rating for student loan refinancing lenders and companies/private student loan lenders and companies, Student Loan Hero asks hard questions — 20 of them, in fact. These questions span three categories: Accessibility, Rates & Terms and Repayment Experience. That’s because we want to judge financial institutions on their products and services from start to finish: when our users are shopping around, filing applications and paying down their debt. A top-rated lender, for instance, has inclusive eligibility criteria, allows you to prequalify and check rates without harming your credit score and is supportive as you face monthly payments.
The answers that we get to our 20 questions — either from the lenders themselves or by combing through their fine print — determine their overall rating. We score answers consistently, sometimes awarding partial points, to ensure that you can make equal comparisons between all lenders that we put under the microscope.
Student Loan Hero isn’t paid for conducting these reviews, and lenders don’t have a say in their content. The goal with our reviews and ratings, along with everything else we do, is to give our users the most comprehensive and up-to-date information available to make the best decisions according to their borrowing needs.
Student Loan Hero has independently collected the above information related to Nelnet Bank student loans, which is current as of May 19, 2022, unless otherwise noted. None of the financial institutions named has either provided or reviewed the information shared in this article.
source: studentloanhero.com