If you’re a student with loans through NelNet, you’ve probably thought about refinancing for a lower monthly payment or interest rate. While you may not be able to directly refinance your loans through NelNet, it doesn't necessarily mean that you can’t do it. There is another option you can take which is to refinance it through a private lender. In this blog post, we discuss how you can refinance your NelNet student loans.
What is Refinancing?
Refinancing refers to taking out a new loan to pay for an existing one. While this may sound counter-productive, it helps people to get out of debt much faster. By replacing your old loan with a new one that has lower interest rates, you can save money during your loan or at least lower your monthly payments.
How Refinancing Can Benefit You
Using a lower interest rate, a bigger portion of your monthly payment can go to the principal, which in turn, will let you pay off your debt faster. You may also choose to reduce or extend your repayment term to lower your payments every month or to pay off your loan quicker. However, remember that if you do refinance, you will lose benefits from your federal loan, such as:
- Student loan forgiveness
Be sure to keep this in mind if you want to take advantage of these benefits.
Can You Refinance NelNet Student Loans?
NelNet is a servicer of federal loans and doesn’t provide refinancing directly. If you want to refinance your loans, you will need to do so with a private lender. Many borrowers looking to refinance will generally pick a lender based on the following:
- Payment flexibility
- Interest rates
- Customer service
- Special programs that are aimed at specific students such as graduates completing medical residencies.
These are just a few factors that can help determine which lender will be the best for you.
Are You Eligible to Refinance?
Every lender will have its own set of requirements for eligibility. In general, you should have a good history of employment and credit score to apply for refinancing. If you aren’t able to qualify on your own, then you may be able to get a cosigner.
Even if you do qualify, having a cosigner with you may help you get a better interest rate. It’s also good to remember that both private and federal loans can be refinanced using a private lender. If you have other loans along with your NelNet loans, you will be able to get refinancing for all of them.
How To Refinance NelNet Student Loans
When you find a new lender, they will offer specific loan terms, such as a new repayment term and interest rate while you pay off the existing debt. Once you’ve finished refinancing, you won’t need to make your monthly payments to NelNet anymore. You will instead work with your new lender who will confirm that your old loan has been paid for before you can stop making payments.