With competitive interest rates and flexible repayment options for struggling borrowers, a Wells Fargo private student loan could be a good option — especially if you’d prefer to borrow from a large, established bank instead of a smaller online lender.
But before you even consider borrowing a private student loan, fill out the Free Application for Federal Student Aid to see what scholarships, grants, work-study opportunities and federal student loans you’re eligible for. Only turn to private student loans if you reach the federal borrowing limits and still need extra cash to cover college expenses.
Wells Fargo at a glance
- Interest rates: 3.16% - 10.63% APR (variable), 5.71% - 12.99% APR (fixed).
- 15-year terms (12-year terms for community college loans); six-month grace periods for student borrowers.
- Deferment and forbearance options for borrowers who go back to school or into the military.
Wells Fargo lends to undergraduate and graduate students, as well as to parents helping their kids pay for college. There are limits to how much you can borrow in Wells Fargo student loans. The limits depend on what type of degree you’re pursuing and the amount of student debt you’ve taken on from other sources, including the federal government. Students in four-year undergraduate programs and some graduate school programs can borrow up to $120,000 in Wells Fargo student loans throughout their lifetime — less if they’ve taken out student loans from another lender. Graduate students in law and business programs can borrow up to $180,000, and medical students can borrow up to $250,000.
You’ll get a small interest rate discount of 0.25% if you already have another Wells Fargo account, such as a checking account. However, it’s worth comparing other private student loan options to make sure you’re getting the best possible rate.
If you don’t meet the minimum credit requirements, which Wells Fargo declined to disclose to NerdWallet, you can apply with a co-signer who does in order to qualify. You can release your co-signer after you make on-time payments for the first 24 consecutive months.
Where Wells Fargo shines
Generous repayment flexibility for struggling borrowers: Wells Fargo offers several options for borrowers who can’t afford their monthly payments, including its Loan Modification Program. The program gives financially distressed borrowers a lower interest rate — as low as 1 percent — for five years or more, depending on their financial situation, says Wells Fargo spokesman Jason Vasquez.
If you’re in the program and still can’t afford your monthly payment, Wells Fargo will extend the loan term to lower your payment even more, Vasquez says. The lender will check in with you after five years; if you’re still struggling to make payments, Wells Fargo will let you keep your lower payment for the rest of your loan term. If you can afford to pay more, it will slowly increase your interest rate, by 0.25% a year, until you’re back to your original interest rate.
Customer support: Unlike some private lenders, Wells Fargo services its own loans, and student loan customers get a dedicated customer service specialist they can call when they have questions. So even if you call five different times in a month, you’ll always talk to the same person, Vasquez says.
Where Wells Fargo falls short
No term length or repayment plan options: Although it offers generous options for struggling borrowers, Wells Fargo doesn’t initially offer the flexibility that many other lenders do, such as the ability to choose among various term lengths and in-school repayment schedules. Some lenders give lower interest rates to borrowers who choose a shorter term length or opt to start making payments while they’re in school instead of waiting until their grace period ends.
Of course, you can always choose to save money by making payments on your Wells Fargo loan before your grace period ends, or repay your loan in fewer than 15 years — you just won’t get a lower interest rate for doing so.
Fewer borrower protections than federal loans: While Wells Fargo offers more generous repayment options for struggling borrowers than some other private lenders, private loans are generally still not as favorable as having a federal student loan. With federal loans, you can switch to an income-driven repayment plan to lower your monthly payment; qualify for loan forgiveness after making payments for a certain period; or, if they’re subsidized loans, you can defer your loans without accruing interest.
Next steps
If you’re ready to borrow from Wells Fargo, you can apply directly on its website. To compare Wells Fargo with other private student loan options, check out NerdWallet’s private student loan page.
You can also get several private student loan offers by filling out one application through NerdWallet’s partner, Credible. Click on the button below to get started.
Teddy Nykiel is a staff writer at NerdWallet, a personal finance website.
Email: teddy@nerdwallet.com. Twitter: @teddynykiel.
from NerdWallet
https://www.nerdwallet.com/blog/loans/student-loans/wells-fargo-student-loan-review/
No comments:
Post a Comment