Student loan refinancing programs began with just a handful of online lenders, but big banks have since jumped onto the bandwagon, offering even more alternatives.
The Wells Fargo student loan consolidation program is one such alternative, allowing you to consolidate your private student loans.
Both customers and non-customers can qualify for consolidation, but if you’re an existing Wells Fargo customer, you’ll get some extra perks from the program.
If you’re interested in consolidating your private loans, take a look at our Wells Fargo review to see if it makes sense for you.
Wells Fargo has branches in 39 states, but you don’t need to live near a branch to open an account with the bank or apply to consolidate your student loans. However, being an existing customer will benefit you.
To be eligible to consolidate your loans, you must meet the following requirements:
You can consolidate up to $120,000 in private loans at a time, up to a $250,000 lifetime limit. The bank offers 15- and 20-year terms, which will be determined by your loan amount.
Wells Fargo does not allow you to consolidate federal student loans â€“ only private student loans are eligible.
The bank offers both fixed and variable interest rates:
You’ll pay no origination or application fees.
There’s no penalty if you choose to pay off the loan early. There is, however, a late fee of up to $28 if you don’t make your payment within the 10-day grace period after the due date.
You’ll get up to a 0.50% discount on your interest rate if you or your cosigner has an eligible Wells Fargo account before applying for the program.
Other potential discounts include:
Like many other student loan services, Wells Fargo also offers a 0.25% discount when you enroll in autopay.
Wells Fargo does not offer deferment of any kind. You may, however, request forbearance to return to college or because of financial hardship. The following terms apply:
If you apply with a cosigner, Wells Fargo allows you to request to release that person from the loan after a certain period of on-time payments.
Because cosigners are equally responsible for repaying the loan, this feature can help a potential cosigner feel more comfortable about helping you apply.
If your first payment is on time, the program requires that you make at least 24 consecutive on-time payments before requesting a release. If your first payment is not on time, you have to make 48 consecutive on-time payments before you can request a release.
Once you submit the request for release, Wells Fargo will review your income and creditworthiness. If they find that you don’t meet their requirements to maintain the loan on your own, they may decline your request.
If you’re interested in Wells Fargo student loan consolidation, it’s important to understand the benefits and drawbacks of the program before applying.
The main advantage of the program is the existing customer incentives. You could get up to a 0.75% discount on your interest rate between the relationship and autopay discounts.
That may sound small, but it adds up over the long run. For example, say you consolidate $20,000 with a 15-year term and a 6.00% APR.
As you can see, you’d end up paying $10,379 over the life of the loan.
If you were to get the maximum available discounts through Wells Fargo, it would drop your APR to 5.25%, saving you $1,439 in interest over the life of the loan.
Even if you get just the 0.25% relationship discount and the 0.25% autopay discount, the resulting 5.50% APR would still net you $964 in interest savings.
The bank’s cosigner release option is also a highlight you won’t get with some refinancing programs. Just keep in mind that missing a payment can delay your eligibility considerably.
The main drawback to the Wells Fargo student loan consolidation program is its exclusivity. Only private loans are allowed, leaving federal student loan borrowers looking elsewhere.
For those with private student loans, Wells Fargo’s rates aren’t as competitive as you can get from the top student loan refinancing lenders. Lenders such as ELFI, SoFi, and LendKey all offer lower fixed and variable rates to those who qualify.
Wells Fargo’s 15- and 20-year terms are a bit restrictive, especially considering you don’t get to choose. The good news is that there’s no prepayment penalty, so you can still treat it like a 10-year loan with extra payments each month.
You’ll also find little sympathy if you need forbearance. Some other refinancing lenders offer much better terms in this regard.
For example, SoFi gives you up to 12 months forbearance in three-month increments if you lose your job or fall on hard times financially. CommonBond offers forbearance for economic hardship in three-month increments for up to 12 months consecutively. The total forbearance you can claim for the life of the loan is 24 months.
You can apply online or by phone at 1-877-315-7723. Be prepared to share the following information:
When you apply, Wells Fargo will run your credit, which will result in a hard inquiry. If you’re using a cosigner, the same thing will happen with their credit report. Note that a hard credit inquiry can affect your credit score.
For starters, if you’re looking to consolidate federal student loans, Wells Fargo isn’t an option. In this case, you should apply for a Direct Consolidation Loan through the Department of Education.
If you have private student loans and an existing relationship with Wells Fargo, keeping everything under one roof can be convenient. You’ll also qualify for one of the relationship discounts, which you won’t get if you don’t have an account with the bank.
If you can qualify for a better interest rate elsewhere, the savings will likely make up for the inconvenience. The same goes if you want the protection of a more robust deferment or forbearance feature or more control over your loan term.
Before choosing a refinancing lender, shop around for interest rates, and features want. Taking the time to research different lenders will give you a better idea of which one will serve your needs best.