Are you considering taking out a private student loan to help pay for college in addition to federal student loans? Are you thinking about Wells Fargo?
Though Wells Fargo has been a major player in the world of student loans for some time now, that does not in and of itself mean they are a good lender for you to consider. Here, we answer some of the common questions that borrowers have about Wells Fargo student loans so that you can make a more informed decision.
Who is Wells Fargo?
Wells Fargo is a financial services company headquartered in San Francisco, California. Founded in 1852, they have been in business for nearly 170 years. During that time, they have provided customers with a range of financial products, including checking accounts, savings accounts, credit cards, personal loans, mortgages, and student loans.
According to the Student Borrower Protection Center (SBPC), Wells Fargo is the third largest lender of private student loans, with a total of $10.61 billion of student loans in their portfolio. This translates into roughly 8 percent of the $130 billion private student loan market.
As of July 2020, Wells Fargo will no longer be granting private student loans to new borrowers. Borrowers with existing Wells Fargo student loans, though, may qualify for new loans with the company.
Types of Student Loans Offered by Wells Fargo
Wells Fargo announced that as of July 2020, the company will no longer offer private student loans to new borrowers. They will, however, consider borrowers who already have a student loan with the company.
That being said, the types of student loans that were previously offered by Wells Fargo include:
- Undergraduate Student Loans: For borrowers seeking their bachelor’s degree
- Graduate Student Loans: For borrowers seeking their graduate degree
- Career Student Loans: For borrowers seeking professional training
- Community College Student Loans: For borrowers attending community college
- Parent Loans: For parents who want to help their child pay for college
Additionally, Wells Fargo offered what they called “Consolidation Loans,” which is a bit of a misleading term for student loan refinancing.
Wells Fargo Interest Rates
Federal student loans carry an interest rate which is set annually by Congress. Regardless of a borrower’s credit history or financial situation, all borrowers are charged the same interest rate.
Wells Fargo, as a private lender, is not constrained by Congress. The company can charge borrowers whatever they wish. These interest rates change frequently depending on the underlying condition of the credit market and competition.
Wells Fargo uses several factors to determine interest rates, including:
- Credit score: Your credit score is a three-digit number designed to tell a borrower how risky it would be to lend you money. A low score means that you are more risky, and will typically result in a higher interest rate. A high score means that you are less risky, and will typically result in a lower interest rate.
- Your income: Whether or not you are employed, and how much you make in income, can influence your interest rates.
- Whether or not you apply with a cosigner: If you apply for your student loan with a cosigner, you immediately lower the risk that the lender will lose money. This often results in a lower interest rate on your loan, in addition to an increased likelihood of being approved.
One important thing to note: All private lenders, including Wells Fargo, advertise their lowest possible rates in order to attract borrowers. While it’s possible to qualify for these low rates, it is exceptionally difficult. The lowest rates are reserved for borrowers with excellent credit score, and are often only available on loans with variable interest rates.
How to Apply for a Student Loan Through Wells Fargo
Wells Fargo is no longer offering new private student loans, except to borrowers who already have a student loan through the company. If you do have a Wells Fargo loan and would like to apply for another, simply visit their website and click “Apply Now” to get started.
To apply, you’ll need:
- Your contact information, including your permanent address
- Your Social Security Number
- Your school information, including the school’s name, your major, and your grade level
- Your employment information (if applicable)
- The cost of attendance at your school
- The amount you need to borrow
- A list of any other financial aid you plan to receive
Wells Fargo Pros and Cons
Pros of Borrowing a Student Loan from Wells Fargo
- No fees: Wells Fargo does not charge borrowers application, origination, prepayment, or late fees.
- 0.25% interest rate discount for auto pay: Borrowers can reduce their interest rate by up to 0.25% by signing up for auto pay.
- Loyalty interest rate discounts: Borrowers can reduce their interest rate by 0.25% if they already have a student loan through Wells Fargo, by 0.25% if they have a Wells Fargo checking account, and by 0.50% if they have a Portfolio by Wells Fargo relationship
- 6-month grace period: Borrowers do not need to make payment for the first six months after leaving school, which is comparable to the grace period offered by federal student loans.
- Cosigner release: Borrowers who have applied with a cosigner can release their cosigner from the loan under certain conditions, including making 24 consecutive, on-time payments.
Cons of Borrowing a Student Loan from Wells Fargo
- No longer active: Because the company is no longer offering new private student loans, borrowers who hoped to apply for a Wells Fargo student loan cannot. Only borrowers with an existing Wells Fargo loan can apply for a new loan.
- Interest rates not set by law: Wells Fargo, as a private lender, has the ability to set their interest rates however they wish. This is very different from federal student loans, which carry an interest rate set by Congress. Many Wells Fargo borrowers end up paying much higher interest rates compared to federal student loans.
- No guaranteed acceptance: As a private lender, Wells Fargo decides its own borrower eligibility requirements, which means that some borrowers will be turned away. By comparison, unsubsidized undergraduate federal student loans are made available to borrowers regardless of credit score or financial situation.
- Not eligible for forgiveness: While federal student loans may be forgiven in certain circumstances, private student loans, including those offered by Wells Fargo, are typically not eligible for forgiveness.
- Limited deferment options: Federal student loans come with a range of deferment and forbearance options which private loans, including those offered by Wells Fargo, typically do not.
- Company plagued by bad press: Wells Fargo has been in the news for years now due to a range of scandals within the company, including for opening fake accounts and charging customers fees. Understandably, many potential borrowers are weary of trusting a company with a record of fraud.
How to Contact Wells Fargo
If you have an existing student loan with Wells Fargo and wish to contact them, you can do so through the options listed below. Hours of operation are Monday through Friday, 7am to 8pm Central Time; Saturday, 8am to 1pm. They are closed on Sunday.
Wells Fargo Student Loan Phone
Student Loan Consultants
Wells Fargo Student Loan Email
While Wells Fargo does not list an email address, you can send them a secure message by submitting the form on this page.
Alternatives to Wells Fargo
Before turning to any private student loan, whether from Wells Fargo or another lender, we always recommend that borrowers exhaust other, more beneficial forms of educational funding. Federal student loans, state-based student loans, and institutional student loans all typically come with lower interest rates than is available from private loans, and also often come with other beneficial terms.
If you have exhausted these sources of loans and choose that a private student loan is still in your best interest, then it’s important to compare your options to find a loan that offers the lowest interest rate and most competitive terms. While you can do this comparison on your own, a student loan marketplace that allows you to quickly compare all of your options side by side is likely to be your best strategy.