Frequently Asked Questions ¬

You should make sure to exhaust lower-cost federal borrowing options before you turn to non-federal student loans like ours.

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.

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.

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

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

• 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.

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.

• 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.

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.

Cosigners are only required if your application doesn’t meet certain creditworthiness requirements. Adding a cosigner may help you qualify for lower rates.

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

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.

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!

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.

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.

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.

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.

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.

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).

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.

There is no typical payment. It all depends on how much you borrow and which repayment option you choose.

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?

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

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?

Nope.

You can receive a 0.25% interest rate discount by enrolling in auto debit when you enter repayment. If you cancel auto debit, the 0.25% interest rate reduction will be removed from your loan. Learn more about the auto debit discount and when it applies.

The loan offers you qualify for are determined by your credit information. We’ll present you with any offers you qualify for if you provide us with your basic income, request loan amount, and Social Security number.

If payment is not made within 15 days of the due date, the late fee is 5% of the payment that was not paid in full when due or $25 – whichever is less. If a payment is returned, the fee is $20 and will be charged instead of a late payment fee when both would be assessed during the same billing cycle.

No. None. Nada.

With fixed-rate loans, your interest rate stays the same throughout the life of your loan. Variable-rate loans have an interest rate that will rise and fall periodically, depending on several economic factors. Overall, fixed-rate loans give you a more predictable option, whereas variable-rates may cause your payment to change periodically.

Definition

A fixed interest rate is an interest rate that stays the same for the life of a loan, meaning the rate does not change over time.

Why it matters

A fixed interest rate can provide predictability when borrowing. Because the rate remains constant, monthly payments typically stay the same, making it easier to plan and budget over time.

This stability can be helpful for borrowers who prefer consistency and want to avoid changes due to market conditions.

Example

If you take out a student loan with a fixed interest rate of 6%, that rate will remain 6% throughout the life of the loan, regardless of changes in the broader economy.

Related topics

• What is an interest rate?

• What is a variable interest rate?

• What is a monthly payment?

• What is a repayment term?

Understand how different rate types can affect your loan and compare options with confidence. Explore your options and see what you may qualify for — without impacting your credit score.²

Definition

A variable interest rate is an interest rate that can change over time based on factors such as market conditions, changes in an underlying benchmark, or your lender’s discretion.

Why it matters

Variable interest rates may start lower than fixed rates, but they can increase or decrease over time. This means monthly payments and total loan costs may change during repayment.

Understanding how variable rates work can help you evaluate potential risks and decide whether this type of rate fits your financial situation.

Example

A borrower may start with a variable interest rate of 5%, but if market rates increase, the rate — and monthly payment — could rise over time.

Related topics

• What is an interest rate?

• What is a fixed interest rate?

• What is a monthly payment?

• What is a loan term?

Learn how variable interest rates may change over time and compare your options. See what you may qualify for — without impacting your credit score.²

Definition

Interest is an amount of money charged when you borrow or earned when you save. It is calculated using an interest rate and applied over time.

Why it matters

Interest plays a role in both borrowing and saving. When you borrow money, interest increases the total amount you repay over time. When you save money, interest helps your balance grow.

Understanding how interest works in different situations can help you make more informed financial decisions and better plan for future expenses.

Example

If you take out a loan, interest is added to the amount you owe over time. If you deposit money in a savings account, interest is added to your balance and helps it grow.

Related topics

• What is an interest rate?

• What is compound interest?

• What is APR?

• How Interest Works on Savings Accounts

Learn how interest affects both borrowing and saving so you can make more informed financial decisions. Explore your options and move forward with confidence.

Definition

An interest rate is a charge you will pay to borrow money or, in the context of savings, an amount you will get paid on a deposit account over time. For loans, the interest rate is a percentage of your outstanding balance and is added to the amount you’ll pay over time. For deposits, it is a percentage of the amount in your deposit account you’ll earn over time.

Why it matters

Interest rates directly affect both your monthly payment and the total cost of a loan. A lower interest rate can reduce how much you pay over time, while a higher rate can increase your overall borrowing cost.

Interest rates also determine how quickly your savings can grow in accounts that earn interest.

Understanding interest rates can help you compare options and make more informed decisions.

Example

If you borrow $10,000 with a 6% interest rate, interest will be calculated based on that rate and added to your balance over time.

Related topics

• What is APR?

• What is a fixed interest rate?

• What is a variable interest rate?

• What is a monthly payment?

Learn how interest rates affect your loan and explore your borrowing options with confidence. See what you may qualify for — without impacting your credit score.²

Let’s get one thing right out of the way. It is free to apply for a loan with us.

We offer student loan refinancing for undergraduate, graduate, law degrees, and medical degrees. We also offer private student loans for graduate, undergraduate, MBA, law, or advanced health professions degrees.

For information, visit our Privacy Center.

Your Nelnet Bank loan is still considered a student loan and you may qualify for tax benefits. Please consult your tax advisor for more information. See Disclaimer.

Either a parent or benefitting student can refinance Parent PLUS loans. You'll need a valid U.S. Social Security number, be of the legal age of majority in your permanent state/territory of residency, have an annual income of at least $36,000, have graduated with a Bachelor’s degree or higher, and meet our minimum credit standards. If you don’t meet these requirements, you’ll need a cosigner who does.

Refinancing a Parent PLUS loan combines your Parent PLUS loan (and any other loans the student has) into a brand-new loan – often, with a lower interest rate and/or monthly payment. The new refinanced loan will be in the student’s name, not the parent’s.

Yes. Responsibility for a Parent PLUS loan transfers from the parent to the student when the student agrees to take responsibility for the loan and refinances the parent’s Parent PLUS loan into a new refinance loan in their own name.

Parents who refinance their Parent PLUS loan may benefit from lower interest rates or monthly payments with a Nelnet Bank student loan refinance. For those students who may be making payments already and are willing to assume responsibility for a Parent PLUS loan taken out by a parent on their behalf, there are benefits. The new loan releases the parent from responsibility for the loan. Their new loan may also have lower interest rates or monthly payments, so they may save money.