Private Student Loans
Before You Apply for a Student Loan
How are interest rates determined on student loans?
The short answer is – it depends on the type of loan. There are federal student loans that are backed by the U.S. government, and private student loans that are made by private banks.
The longer answer? Federal Direct Loan interest rates are determined each year by the U.S. Congress. Private loan interest rates are set by private lenders (like Nelnet Bank) using a number of factors.
When should I consider a private student loan?
You should make sure to exhaust lower-cost federal borrowing options before you turn to non-federal student loans like ours.
Will applying for a student loan affect my credit score?
Checking your rate results in a soft credit pull, which will not affect your credit score. If you continue with your application, Nelnet Bank will request your permission to obtain your full credit report from one or more consumer reporting agencies. This is a hard credit pull and may affect your credit score.
What is a loan?
A loan is money borrowed from a lender that must be repaid over time, typically with interest, according to agreed-upon terms.
Why it matters
Loans can help cover large expenses, such as education or home improvements, when upfront payment isn’t possible.
Understanding how loans work — including interest rates, repayment terms, and payment structure — can help you compare options and choose a loan that fits your financial situation.
Example
Loans can be used for large expenses such as education, home improvements, or personal needs. A student may take out a student loan to help pay for tuition and related expenses, then repay the amount over time through scheduled monthly payments.
Related topics
What is a lender?
What is an interest rate?
What is a repayment term?
What is a private student loan?
Understand how loans work and what to consider before borrowing. Compare your options and see what you may qualify for — without impacting your credit score.2
What is a budget?
A budget is a plan that helps you track your income and expenses over a specific period of time, such as a month.
Why it matters
Creating a budget can help you understand how much you can afford to spend and borrow.
For students and families, a budget can make it easier to plan for college costs, manage everyday expenses, and prepare for future loan payments.
Example
A student may create a monthly budget that includes room and board, transportation, and loan payments to better manage their finances while in school.
Related topics
What is a financial aid gap?
What is a monthly payment?
Paying for College Guide
Student Loan Repayment Guide
What is credit history?
Definition
Credit history is a record of how you've managed borrowed money over time, including past and current loans, credit cards, and other accounts.
Why it matters
Your credit history reflects things like how long you've had credit, whether you've made payments on time, and how you've managed different types of accounts. Lenders often review credit history alongside your credit score when evaluating a loan application, since it offers a fuller picture of your borrowing experience.
Because building credit history takes time, it's common for students to have a limited credit history when they first apply for a loan. This is one reason many student borrowers apply with a cosigner who has a more established credit history.
Example
A borrower with several years of on-time payments across multiple accounts generally has a longer, more established credit history than someone who just opened their first credit account.
Related topics
What is a credit score?
What is a credit report?
What is a cosigner?
What affects loan approval?
© 2026 Nelnet Bank, Member FDIC
Nelnet Bank is a wholly owned subsidiary of Nelnet, Inc. Loan products are subject to credit approval.
Private Student Loan Eligibility
Student Aid Index (SAI)
An index used to determine a student's eligibility for need-based financial aid, calculated from the information submitted on the FAFSA.
What are the benefits of having a cosigner for a student loan?
Nelnet Bank borrowers may receive a lower interest rate on their loan for having a cosigner, which lowers their monthly payment and overall costs.
It can often be difficult for students and borrowers to meet creditworthiness requirements. A cosigner can help them get the loans they need.
What are the eligibility requirements for a student loan?
To qualify, you’ll need to meet the following 6:
Be enrolled at least half-time at a Nelnet Bank-eligible school during the loan period.
You or your cosigner must be a U.S. citizen or permanent resident with a valid Social Security number.
You or your cosigner must have a FICO® score in the mid to high 600s or higher.
You and your cosigner, if any, must meet the Bank’s underwriting criteria.
A cosigner isn’t required, but may help you qualify or secure a better rate.
You must be old enough to enter a binding contract in your state or territory.
You or your cosigner must have income that can support the loan payments.
Applicants who are 16 or 17 may apply with a qualified cosigner.
What is a cosigner?
A cosigner is a creditworthy person willing to assume responsibility for loan liabilities if the borrower fails to repay the loan. Applying with a cosigner may help you qualify for a loan and also lower your interest rate. Cosigners must be eligible U.S. citizens or permanent residents.
Is a cosigner required?
Cosigners are only required if your application doesn’t meet certain creditworthiness requirements. Adding a cosigner may help you qualify for lower rates.
How much can I borrow?*
Undergraduate
Minimum loan amount: $1,000
Maximum loan amount: $125,000
Graduate
Minimum loan amount: $1,000
Maximum loan amount:
Graduate and doctorate: $175,000
MBA or graduate law degree: $175,000
Graduate health professions degree: $500,000
*Maximum loan amounts are subject to limits on total student loan debt
What is loan certification?
Definition
Loan certification is the process a school uses to confirm a student's enrollment, cost of attendance, and requested loan amount before a private student loan is disbursed.
Why it matters
Loan certification typically happens after a loan is approved but before funds are disbursed. During this step, the school verifies that you're enrolled, confirms your cost of attendance, and makes sure the requested loan amount doesn't exceed your remaining financial need.
Because certification depends on the school's own timeline, it can affect how quickly your loan funds are disbursed, so it's worth building extra time into your plans around when tuition is due.
Example
A student is approved for a $10,000 private student loan. Before the funds are disbursed, the school certifies the student's enrollment and confirms that $10,000 doesn't exceed the remaining cost of attendance after other financial aid is applied.
Related topics
What is cost of attendance?
What affects loan approval?
What is a disbursement?
What is a financial aid gap?
Ready to apply for a private student loan? See what you may qualify for — without impacting your credit score.2
© 2026 Nelnet Bank, Member FDIC
Nelnet Bank is a wholly owned subsidiary of Nelnet, Inc. Loan products are subject to credit approval.
What is student loan underwriting?
Definition
Student loan underwriting is the process a lender uses to review your credit, income, and other financial information to decide whether to approve a student loan and set its rate and terms.
Why it matters
During underwriting, lenders typically evaluate factors such as your credit score and credit history, income, existing debt, and enrollment status. If you're applying with a cosigner, the lender reviews their financial profile as well.
Understanding what happens during underwriting can help you know what lenders are looking for and why two borrowers with different financial profiles might be offered different rates or terms for the same loan amount.
Example
After you submit a private student loan application, underwriting may include verifying your income, reviewing your credit report, and confirming your school and enrollment details before the lender approves a specific rate and loan amount.
Related topics
What affects loan approval?
What is a credit score?
What is credit history?
What is a cosigner?
Curious what a lender considers during underwriting? See what you may qualify for without impacting your credit score.2
© 2026 Nelnet Bank, Member FDIC
Nelnet Bank is a wholly owned subsidiary of Nelnet, Inc. Loan products are subject to credit approval.
Application Process for Private Student Loans
Are the borrower and cosigner's credit checked?
After your student loan application is submitted, we pull a soft credit report on you and your cosigner to determine creditworthiness. If you and your cosigner meet loan criteria including credit score and credit history, you will qualify for loan offers. After you’ve selected a loan and signed the credit agreement, a hard inquiry will be placed on you and your cosigner's credit – this may impact the credit score for both you and your cosigner.
I was pre-qualified. What's next?
After you've chosen one of your pre-qualified offers, please be prepared to submit proof of income. If you have a cosigner, you may not need to submit income as we can rely on the income of the cosigner which they will need to submit proof of instead. Once income verification is completed, you will be prompted to sign the credit agreement and then formally accept the loan. From there, we will disburse funds to your school and email instructions on how to access your new Nelnet Bank Student Loan account. That’s it!
When will my first payment be due?
This depends on what initial repayment option you select while you’re in school. If you choose to make payments while in school, which can be interest only, fixed pay or full principal and interest payments, then your first payment will be due 30-45 days after your first disbursement to your school. We will notify you when the payment will be due. If you choose to defer payments while in school, then your first payment will be due six months after you leave school. Keep in mind that if you defer payments, interest will accrue on your loan and the balance owed will continue to grow until you start making payments.
How long does it take to apply for a student loan?
You can see a rate in minutes. Once you select a loan, upload documents, and sign your final agreement, you can typically have funds available in 2-3 weeks.
What is a lender?
Definition
A lender is a bank, financial institution, or organization that provides money to a borrower with the expectation that it will be repaid over time, usually with interest.
Why it matters
Different lenders may offer different interest rates, loan terms, repayment options, and borrower benefits.
Understanding how lenders structure loans and evaluate applications can help you compare options and choose a loan that fits your financial needs.
Example
A student applying for a private student loan may compare offers from multiple lenders, each with different interest rates, repayment terms, and eligibility requirements.
Related topics
What is a private student loan?
What is an interest rate?
What is a repayment term?
What affects loan approval?
Nelnet Bank is one example of a lender that offers private student loans to help cover education expenses. You can learn more about available options on our private student loans page.
Repayment of Private Student Loans
What is the fastest way to pay off my student loan?
With Nelnet Bank, the fastest option is Immediate Repayment, since you’ll be making a higher payment each month, but paying less in interest over time.
What's the maximum deferment for residency, fellowship, internship, or clerkship — and how does it work?
Up to 66 months, total. That includes a six-month grace period, plus up to 60 additional months of deferment for borrowers enrolled in a qualified residency, post-residency fellowship, internship, or clerkship. This additional deferment is applied in 12-month increments, and proof of enrollment or employment is required.
What kind of repayment options are available?
Some of your repayment options include:
Immediate repayment (you'll be required to make monthly full principal and interest payments as soon as the loan is disbursed).
Interest-only repayment (you’ll make monthly interest-only payments while in school) and monthly full principal and interest payments after you separate from school.
Defer principal and interest payments (you won’t be required to make any payments until after you separate from school) but interest will accrue while in deferment.
Fixed payment ($25 monthly fixed payment amount while in school and monthly full principal and interest after you separate).
How do I defer student loans?
You’ll need to contact your student loan servicer or private loan lender to start the deferment process – keep in mind that you’ll still accrue interest while your loans are deferred. If your loan is through Nelnet Bank, you can request deferment in your online account or by contacting us at 800.446.4190 or Loans@NelnetBank.com.
What are the student loan cosigner release requirements?
A request for the cosigner to be released can be made by either the borrower or cosigner once conditions of the cosigner agreement have been met. Read the terms of the cosigner agreement here.
What type of monthly payment should I expect to pay on my student loan?
There is no typical payment. It all depends on how much you borrow and which repayment option you choose.
What is a loan term?
Definition
A loan term is the length of time you have to repay a loan, typically measured in years.
Why it matters
Your loan term affects both your monthly payment and the total amount of interest you pay over time. Shorter loan terms usually result in higher monthly payments but lower overall interest costs, while longer terms may reduce monthly payments but increase the total cost of borrowing.
Example
Assuming everything else being equal, a 10-year loan term will generally have higher monthly payments than a 15-year term, but you may pay less interest overall.
Related topics
What is a repayment term?
What is a monthly payment?
What is an interest rate?
What is interest capitalization?
What is a monthly student loan payment?
Definition
A monthly student loan payment is the amount you pay each month to repay your loan, based on your loan balance, interest rate, and repayment term.
Why it matters
Your monthly payment determines what you’ll need to budget for after school and how manageable your loan may feel over time. Understanding what your payment might look like can help you borrow responsibly, compare loan options, and plan ahead for repayment.
Example
A borrower with a $15,000 loan, a 7% fixed interest rate, and a 10-year repayment term may have a fixed monthly payment that remains the same each month until the loan is repaid.
Related topics
What is a repayment term?
What is an interest rate?
What is student loan interest?
Student Loan Repayment Guide
What is student loan debt?
Definition
Student loan debt is the total amount of money you owe from loans used to pay for college or other education expenses.
Why it matters
Student loan debt doesn’t just reflect what you borrowed — it also includes fees and interest that may accrue over time.
Understanding how much you owe can help you plan for repayment, evaluate borrowing decisions, and avoid taking on more debt than you may be comfortable managing after graduation.
Example
If you borrow $5,000 each year for four years, your total student loan debt could be $20,000 or potentially much more, depending on things like the interest rate, fees, and repayment option you choose.
Related topics
What is a student loan balance?
What is student loan interest?
What is a monthly payment?
What is a financial aid gap?