SoFi vs Nelnet: Student loan refinancing compared

SoFi emphasizes robust member perks, career services, and a sleek mobile app experience, while Nelnet Bank offers straightforward servicing with a focus on customer support and clear cosigner release pathways. Both lenders provide competitive fixed and variable rates; the better fit depends on whether you value comprehensive financial tools and lifestyle perks (SoFi) or servicing simplicity and flexibility (Nelnet). You’ll learn how they compare on rates, terms, eligibility requirements, borrower benefits, and which lender fits your specific situation.

For both parents managing family finances and graduates taking control of their own repayment, the goal of refinancing is usually the same: save money or lower monthly obligations. However, choosing the right lender goes beyond just the interest rate. It involves looking at the long-term relationship you will have with the company handling your debt.

Context: When refinancing makes sense

Before diving into the specific differences between SoFi and Nelnet, it is vital to determine if refinancing is the right strategic move for your financial picture. Refinancing is a powerful tool, but it is not a one-size-fits-all solution.

Refinancing is generally best suited for borrowers—or parents holding Parent PLUS loans—who have stable income, a strong credit history (typically a score of 650 or higher), and existing loans with interest rates higher than current market averages. If your credit score has improved since you first took out your loans, or if you have graduated and secured a steady job, you are in the prime position to qualify for a lower rate.

However, there are specific scenarios where you should pause. If you are refinancing federal student loans into a private loan with SoFi or Nelnet, you will permanently lose access to federal protections. This includes access to Income-Driven Repayment (IDR) plans, potential loan forgiveness programs like Public Service Loan Forgiveness (PSLF), and generous federal deferment options. If you work in a public service job or have a fluctuating income, keeping federal loans within the federal system is often the safer choice.

Timing is also a critical factor. The interest rate you are offered depends heavily on the broader economic environment and your personal creditworthiness. The best time to refinance is when your debt-to-income ratio is healthy and your credit score is at its peak, ensuring you qualify for the lowest advertised rates.

SoFi vs Nelnet: Quick comparison

To help you make an initial assessment, we have broken down the core features of both lenders. While both are industry leaders, their product structures differ slightly in ways that may impact your repayment strategy.

Sources: SoFi and Nelnet Bank rates pages (as of October 2024)

Key Takeaways: Both lenders offer identical repayment term lengths and the industry-standard autopay discount. The most significant differences often lie in the maximum loan limits for specific degree types and the “extras” attached to the loan. While SoFi markets itself as a complete financial ecosystem, Nelnet Bank leans on its reputation as a dedicated education finance institution.

Note: The rates you are actually offered will depend on your credit score, income, and debt-to-income ratio. The lowest advertised rates are typically reserved for the most creditworthy borrowers.

SoFi vs Nelnet: Rates and terms breakdown

While the quick comparison table provides a snapshot, understanding the nuances of rates and terms is essential for long-term savings. Both SoFi and Nelnet structure their loans to compete for borrowers with good credit, but your choice between them may come down to your preference for rate type and term flexibility.

Both lenders offer fixed and variable interest rates. Choosing between them is a risk-tolerance decision. A fixed rate remains the same for the life of the loan, providing certainty for your monthly budget. This is generally the preferred option for parents or students who want to lock in a specific payment amount for 10 or 15 years.

A variable rate may start lower than a fixed rate, which can save you money in the short term. However, this rate can fluctuate based on market conditions (typically tied to an index like SOFR). If you plan to pay off your loan very quickly—perhaps in 5 years or less—a variable rate might be mathematically superior. If you need 15 or 20 years to repay, a fixed rate is the safer bet to avoid rising costs in the future.

SoFi and Nelnet both offer terms ranging from 5 to 20 years. The trade-off here is straightforward but impactful:

• Short Terms (5-7 years): You will likely secure the lowest possible interest rate and pay the least amount of total interest over the life of the loan. However, your monthly payment will be significantly higher.
• Long Terms (15-20 years): Your monthly payment will be much lower, freeing up cash flow for other expenses. However, you will likely be charged a higher interest rate and will pay significantly more in total interest over time.

To visualize this, consider refinancing a $50,000 balance. On a 5-year term, your payments might be aggressive—potentially over $900/month—but you are debt-free quickly. On a 20-year term, that payment might drop to the $350–$450 range, but you could end up paying thousands more in interest. Both SoFi and Nelnet allow you to choose the term that fits your current budget, but it is crucial to calculate the total cost of borrowing, not just the monthly payment.

Both lenders determine your specific rate based on a holistic view of your financial health, including your credit history, income stability, and debt-to-income ratio. As you saw in the comparison table, the ranges are competitive, meaning your personal financial profile matters more than the lender’s general range.

Ready to see your personalized rates? Compare offers from SoFi, Nelnet, and other top refinancing lenders. Checking rates takes just minutes and won’t affect your credit score. Compare rates from 8+ lenders Trusted by 50,000+ students and families.

Eligibility requirements: SoFi vs Nelnet

Even the best interest rates are irrelevant if you cannot qualify for the loan. Private student loan refinancing is an underwritten product, meaning lenders carefully assess the risk of lending to you. Here is how SoFi and Nelnet compare regarding eligibility.

Both lenders generally look for a minimum credit score in the mid-600s, often around 650 to 680, though borrowers with scores in the 700s are more likely to see competitive offers. Income verification is mandatory; lenders want to see sufficient cash flow to cover your new loan payments alongside your rent, mortgage, and other debts.

• SoFi: Known for strict underwriting that prioritizes high “free cash flow.” They look closely at your debt-to-income ratio. SoFi typically requires you to have completed your degree (Associate’s degree or higher) to refinance, although they do review cases for those in the final stages of their education under specific criteria.
• Nelnet Bank: Also requires stable income and strong credit. They generally require the student borrower to have graduated with at least a bachelor’s degree to refinance on their own. However, they may offer slightly different flexibility regarding loan amounts depending on the degree type (e.g., medical vs. undergraduate).

Both lenders require borrowers to be U.S. citizens or permanent residents. In some cases, visa holders may qualify with a creditworthy cosigner who is a U.S. citizen or permanent resident. Regarding loan types, both lenders allow you to refinance existing private student loans, federal student loans, and Parent PLUS loans.

For recent graduates who have high income potential but a short credit history, qualifying alone can be difficult. Adding a creditworthy cosigner—often a parent or guardian—can significantly improve the odds of approval and lower the interest rate.

According to Mark Kantrowitz, financial aid expert, “Most students will need a cosigner to qualify for a private student loan.” This is a common strategy that allows young professionals to access refinancing benefits before they have built a decades-long credit history.

Borrower benefits and perks compared

If rates and eligibility are similar, the decision often comes down to the “extras.” This is where the divergence between SoFi and Nelnet becomes most apparent. SoFi operates as a fintech company focused on lifestyle and membership, while Nelnet operates as a specialized student loan servicer.

SoFi treats borrowers as “members,” providing access to a suite of benefits designed to help you advance your career and financial life.

• Career Coaching: Members can access one-on-one career coaching and resume reviews, a valuable perk for recent graduates navigating the job market.
• Financial Planning: SoFi offers complimentary access to credentialed financial planners who can help you map out broader financial goals beyond just debt repayment.
• Member Events: Access to networking events and dinners in major cities.
• Unemployment Protection: If you lose your job through no fault of your own, SoFi offers a specific unemployment protection program that can pause payments while you look for work (interest may still accrue).
• Ecosystem Discounts: Rate discounts on other SoFi products, such as personal loans or mortgages.

Nelnet Bank focuses on a streamlined, no-nonsense borrowing experience. Their benefits are less about lifestyle perks and more about the mechanics of the loan.

• Servicing Expertise: As a division of Nelnet, a massive student loan servicer, they have deep infrastructure for handling payments and customer service inquiries efficiently.
• Simplicity: For borrowers who want a “set it and forget it” loan without upselling or social networking features, Nelnet provides a clean, distraction-free dashboard.
• Autopay: Like SoFi, they offer a 0.25% interest rate reduction for enrolling in automatic payments.

Both lenders offer forbearance options for economic hardship, though private lenders are generally less generous than the federal government. It is important to review the specific forbearance limits (usually capped at 12 months in total over the life of the loan) for each lender before signing.

Cosigner policies and release options

For families managing debt together, the cosigner policy is often the deciding factor. Many parents are willing to cosign to help their child get a lower rate but do not want the debt appearing on their credit report forever.

Cosigner release is a provision that allows the primary borrower to apply to remove the cosigner from the loan after meeting specific requirements. Once released, the cosigner is no longer legally responsible for the debt, and it falls off their credit report.

According to Mark Kantrowitz, financial aid expert, “Cosigner release is a valuable feature offered by some private lenders, rewarding responsible repayment.” This feature provides an exit strategy for parents, protecting their ability to borrow for their own needs, such as a mortgage or car loan, in the future.

• Nelnet Bank: Nelnet is well-regarded for a clear cosigner release policy. According to Nelnet Bank, borrowers can typically apply for release after making 24 consecutive on-time full principal and interest payments. The primary borrower must also meet credit and income underwriting criteria at the time of the request.
• SoFi: As reported by SoFi, the lender also offers cosigner release after 24 months of on-time payments. Historically, SoFi did not offer this feature, but they have since added it to remain competitive. Like Nelnet, the primary borrower must undergo a credit review to prove they can handle the loan alone.

While the timelines are currently similar, borrowers should always verify the specific “fine print” regarding release. Some lenders require payments to be strictly consecutive with no forbearance used during that period. If releasing the cosigner is your top priority, Nelnet’s long-standing history as a servicer may offer a slight peace-of-mind advantage regarding the administrative handling of these requests.

Application process: What to expect

Once you have decided to move forward, the application process for both lenders is fully digital and relatively fast. Here is what you can expect when you apply.

Both SoFi and Nelnet allow you to check your rate estimates online. This process requires basic information—name, address, income, degree info—and results in a soft credit pull. This does not impact your credit score. You will see a range of fixed and variable rates you are likely to qualify for.

If you like a rate and decide to proceed, you will submit a full application. Be prepared to upload:

• Government-issued ID (Driver’s license or passport)
• Proof of income (Recent pay stubs or tax returns)
• Proof of graduation (Diploma or transcript)
• Payoff statements for your current loans (to verify the exact amount needed)

Once you submit the full application, the lender will perform a hard credit inquiry, which may temporarily dip your credit score by a few points. Approval can take anywhere from a few days to a couple of weeks, depending on how quickly you provide documentation. Once approved and signed, the new lender (SoFi or Nelnet) will pay off your old loans directly. You will then begin making payments to your new lender.

Which lender is right for you? Decision framework

With comparable rates and terms, the choice between SoFi and Nelnet often depends on your personality and priorities. Use this framework to decide which lender aligns with your goals.

• You value career support: The free career coaching and financial planning are tangible benefits that can save you money elsewhere.
• You want a digital-first experience: SoFi’s app is robust, allowing you to manage loans, investments, and banking in one place.
• You are an existing member: If you already use SoFi for other financial products, you may qualify for additional rate discounts.
• You want community: You appreciate networking events and being part of a broader financial “club.”

• You prioritize simplicity: You want a straightforward loan without cross-selling of other financial products.
• You value servicing experience: You prefer a lender with deep roots in student loan administration and customer support.
• You want a focused relationship: You prefer keeping your student debt separate from your banking and investing activities.

Since both lenders offer a soft-pull rate check, the smartest financial move is often to apply for prequalification with both. You might find that one lender offers you a significantly lower rate based on their specific underwriting algorithm. In that case, the interest rate savings should likely trump any difference in perks or app features.

Ready to find your best refinancing rate? Compare personalized offers from top lenders including SoFi and Nelnet—prequalifying takes just 2 minutes and won’t impact your credit. Find your best loan option Trusted by 50,000+ students and families.

Frequently asked questions

Can I refinance federal student loans with SoFi or Nelnet?
Yes, both lenders allow you to refinance federal loans. However, remember that doing so converts them into private loans, meaning you lose access to federal benefits like income-driven repayment plans and Public Service Loan Forgiveness (PSLF).

Which lender has better interest rates, SoFi or Nelnet?
It depends entirely on your unique credit profile. Both lenders offer competitive market rates. One lender’s algorithm might view your credit history more favorably than the other, which is why checking rates with both is recommended.

Does checking rates with SoFi or Nelnet hurt my credit?
No. Both lenders use a soft credit inquiry for the prequalification stage, which does not affect your credit score. A hard inquiry only occurs if you choose an offer and submit a full application.

Can I refinance without a cosigner?
Yes, if you have a strong credit score (typically 650+) and sufficient income to support the payments. If your credit history is thin or your income is lower, applying with a creditworthy cosigner will significantly improve your chances of approval and likely secure a lower rate.

How long does SoFi or Nelnet cosigner release take?
Both lenders generally offer cosigner release after 24 consecutive on-time monthly payments, provided the primary borrower meets the underwriting criteria at that time.

Refinancing your student loans is a proactive step toward financial freedom. Whether you choose SoFi for its comprehensive member benefits and career support, or Nelnet Bank for its servicing expertise and simplicity, you are taking control of your debt.

Remember the key takeaways:

• Rates are personal: While both offer competitive APRs, your specific offer depends on your credit health.
• Perks vary: SoFi offers lifestyle and career perks; Nelnet offers straightforward, focused servicing.
• Cosigner release is available: Both lenders offer a 24-month path to release cosigners, a crucial feature for families.
• Shop around: Use the soft-pull prequalification to let the numbers help you decide.

By securing a lower interest rate or a better repayment term, you can reduce the total cost of your education and simplify your monthly budget. Don’t leave money on the table—check your options today.

Compare refinancing rates from SoFi, Nelnet, and 6+ other top lenders. See your personalized rates in minutes—checking won’t affect your credit score. Compare refinancing rates now Trusted by 50,000+ students and families.

References and resources

• SoFi Student Loan Refinancing
• Nelnet Bank Student Loan Refinancing
• StudentAid.gov (Federal Student Aid Information)
• How to refinance student loans (College Finance Guide)
• Best student loan refinancing lenders (College Finance Comparison)
• Federal vs private student loans (College Finance Guide)