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Nelnet Bank/U-Fi Student Loan Review

Nelnet Bank/U-Fi Student Loan Review

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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} to 9.20{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} (lowest rates include autopay discount)
Fixed: 3.49{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} to 7.44{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} (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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} or $25, whichever is less
Repayment No prepayment penalties
Terms range from five to 25 years
Cosigner releases available after 24 months
0.25{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} 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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} and fixed starting at 3.49{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} Variable starting at 4.80{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} and fixed starting at 4.45{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} Variable starting at 2.94{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} and fixed starting at 2.99{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} 
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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} to 10.40{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} (lowest rates include autopay discount)
Fixed: 3.34{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} to 11.68{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} (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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} 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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} 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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} 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{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} and fixed starting at 3.34{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} Fixed starting at 3.47{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} Variable starting at 1.89{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b} and fixed starting at 3.47{797b2db22838fb4c5c6528cb4bf0d5060811ff68c73c9b00453f5f3f4ad9306b}
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 [email protected]
Secure message
Phone 800-446-4190 Monday through Friday from 7:00 a.m. until 8:00 p.m. CST
Mail Nelnet Bank
13907 S. Minuteman Dr, Suite 250
Draper, UT 84020

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.