Nelnet Bank/U-Fi Student Loan Review – Student Loan Hero

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VISIT NELNET BANK BANK
VISIT NELNET BANK BANK
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.
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 is best for parents or borrowers with relatively low loan balances or those that want the longest repayment term possible to reduce their payments.
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:
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.
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.
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.
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.
Although Nelnet Bank could be a useful option for some borrowers, it does have some drawbacks compared to other lenders:
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.
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.
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.
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 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.
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.
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,
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.
There are many private student loan companies, but here is why Nelnet Bank stands out:
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.
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.
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.
Before submitting a loan application, consider these drawbacks to Nelnet Bank’s student loans.
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.
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.
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 does Nelnet Bank’s student loans compare to other leading lenders?
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.
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.
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.
Nelnet Bank’s customer service team is available via email or phone.
If you didn’t find your question answered in our Nelnet Bank reviews, check out the following FAQs:
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.
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.
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.
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.
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