August 26, 2021

How Do I Consolidate My Student Loans With Nelnet?

Chipper Help

Nelnet student loan consolidation and refinancing is a straightforward process. As a federal student loan servicer, you can consolidate your Nelnet student loans with the federal government’s Direct Consolidation Loan.

Nelnet itself does not offer student loan consolidation. Likewise, Nelnet does not directly offer refinancing options. Still, you can refinance your Nelnet student loans with a private lender as you would with any student loan.

Here’s a look into each option to help you decide whether you want to consolidate or refinance your Nelnet student loans.

Consolidating Nelnet Student Loans

A Direct Consolidation Loan with the federal government would combine your multiple Nelnet student loans into one policy. This strategy allows you to make one convenient monthly payment.

Plus, you may have lower monthly payments when you consolidate multiple student loans. By combining your existing student loans into one policy, you could apply for a longer repayment term. Note that more interest may accrue with longer repayment terms.

In addition to more interest, you may get a higher interest rate by consolidating student loans. Your new interest rate will be an average of your combined Nelnet student loan interest rates, rounded up to the nearest one-eighth of a percentage.

Getting a Direct Consolidation Loan may also reset your eligibility for loan forgiveness. Plans like the Public Service Loan Forgiveness program help borrowers who have been in repayment for some time to qualify for student loan forgiveness. Consider consolidating while early in your repayment period.

Refinancing Nelnet Student Loans

Refinancing student loans involves combining them into a new policy with a private lender. That said, the federal student loans you combine will become a private student loan under new private terms. Refinancing Nelnet student loans would mean leaving Nelnet as your student loan provider.

Refinancing may get you a lower interest rate. As you shop for private lenders to refinance your student loans, you may find options that suit your current financial and credit situation. Private institutions offering private student loans determine interest rates based on your credit score (or a co-signer's credit score).

Since you will be getting a new private loan, you will give up your federal benefits once you refinance your Nelnet student loans. You will no longer qualify for federal repayment programs, student loan forbearance, or forgiveness programs.

Still, your new private lender may offer similar options. Be sure to weigh all your options before settling with a private student loan provider for refinancing your student loans.

How Do I Consolidate My Student Loans With Nelnet?

You cannot directly consolidate your student loans with Nelnet. However, you can combine them with a Direct Consolidation Loan because they are federal student loans.

You can also refinance your Nelnet student loans with a new private lender. This option allows you to leave Nelnet as your student loan provider and access potentially lower interest rates.

However, consolidation and refinancing both have advantages and disadvantages. Consolidation may give you a longer repayment plan, but more interest may accrue throughout its lifetime. Meanwhile, refinancing may give you lower interest rates, but you would lose federal benefits like student loan forgiveness.

Be sure to reassess your financial situation before proceeding with any strategy.

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