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How to Refinance Nelnet Student Loans
Updated On September 5, 2023
Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.
If you want to know how to refinance Nelnet student loans, this ultimate guide to student loan refinancing will help you to refinance Nelnet student loans.
Nelnet is a major student loan servicer for both federal student loans and private student loans. You may be wondering: “What should I do with my Nelnet student loans?” Some student loan borrowers may decide to keep their student loans with Nelnet until they pay off their student loan debt. However, other student loan borrowers could choose to refinance their Nelnet student loans.
Which option is best for you?
In this ultimate guide to refinance Nelnet student loans, you will learn:
- How to refinance Nelnet student loans
- Why you should refinance Nelnet student loans
- When student loan refinancing isn’t right for you
- Should you refinance your Nelnet loans?
How To Refinance Nelnet Student Loans
Student loan refinancing helps you to get a lower interest rate, lower student loan payment or both for your student loans. Through student loan refinancing, you can refinance federal student loans from the U.S. Department of Education or refinance private student loans from Nelnet.
If you have Nelnet student loans, you can refinance student loans with a private lender. For example, you could refinance with top private lenders, such as SoFi. When you refinance student loans, you combine your existing student loans into a single student loan with one monthly payment and one student loan servicer.
Student loan refinancing also simplifies student loan repayment, since you only have to make one payment each month. The top reason to refinance student loans is to lower your interest rate, save money and pay off student loans faster.
If you want to know how to refinance Nelnet student loans, the process is simple and can be completed online. Lenders will evaluate your credit score, income, debt-to-income ratio and other factors to ensure that you are a responsible student loan borrower.
Typically, lenders prefer to refinance student loans for borrowers who have at least a credit score of 650, current employment or a written job offer, stable and recurring income, and a low debt-to-income ratio, among other factors. If you do not meet these qualifications, you can apply with a qualified co-signer.
Why You Should Refinance Nelnet Student Loans
There are several reasons why you should refinance Nelnet student loans. The main reasons are to:
Save money
The main reason to refinance Nelnet student loans is to save money. With a lower interest rate, you can save money on your student loans and pay off student loans fast. You can compare the best student loan refinancing rates online.
You can use this student loan refinancing calculator to determine how much money you can save when you refinance Nelnet student loans.
For example, let’s assume you have $200,000 of student loans at an 8% interest rate and a 10-year repayment term. Now, let’s assume you can refinance student loans at a 3.5% interest rate and a 10-year repayment term. With student loan refinancing, you could save $449 each month and save $53,860 total.
Change your student loan terms
Student loan refinancing also helps you change your student loan terms. If you refinance Nelnet student loans, you can choose either a new fixed interest rate or variable interest rate.
You should only refinance Nelnet student loans if you can get a lower interest rate. You can keep refinancing your student loans because there is no limit to how often you refinance student loans. Since there are no origination fees or prepayment penalties, you can refinance student loans each time you find a lower interest rate.
When you refinance student loans, you can also choose a new student loan repayment term, which typically ranges from 5 to 20 years. For example, a shorter repayment period (such as 5 years) has a higher monthly payment, but it will save you money since you will pay less interest.
In contrast, a longer repayment period (such as 20 years) will have a lower monthly payment, but ultimately cost you more in interest payments. You should choose the student loan repayment period that best fits your personal financial situation and goals.
Change your lender or student loan servicer
When you refinance student loans, you can change your student loan servicer. For example, if you’re unhappy with Nelnet, for example, student loan refinancing could help you to get a new student loan servicer that can deliver better customer service.
When Student Loan Refinancing Isn't Right For You
Whether you should refinance Nelnet student loans depends if you have federal student loans or private student loans.
If you have private student loans, and can find a lower interest rate, student loan refinancing is a good way to save money and simplify student loan repayment. When you refinance private student loans, there is no impact to student loan forgiveness or income-driven repayment plans, for example, because those are benefits for federal student loans only.
If you have federal student loans, you should balance the potential cost savings from student loan refinancing with the loss of federal benefits such as income-driven repayment plans and student loan forgiveness for Nelnet student loans.
For example, if you plan to enroll in the Public Service Loan Forgiveness program, you must keep your federal student loans outstanding and should not refinance federal student loans.
However, you can still refinance private student loans. If you feel confident in your earning potential and ability to repay student loans, then student loan refinancing for both federal and private student loans is a smart tool. That said, if you plan to use income-driven repayment or certain federal student loan forgiveness programs, refinancing private student loans only may be a better option.
Should You Refinance Your Nelnet Loans?
You may wonder, “Should you refinance your Nelnet student loans?”
When it comes to whether you should refinance Nelnet student loans, make sure you understand your options. For example, with student loan refinancing, you can lower your interest rate, save money and pay off student loans more quickly.
If you have federal student loans and need an income-driven repayment plan or student loan forgiveness, then student loan refinancing for your federal student loans may not be best for you. That said, you can still refinance private student loans, since private student loans aren’t eligible for student loan forgiveness or income-driven repayment.
However, if your goal is to save money or pay off student debt as fast as possible, then student loan refinancing for both your federal and private student loans may be your best option.
Refinance With SoFi
