Here is an unbiased, in-depth Wells Fargo student loan refinance review. We will look at the loan product, what it entails, the application process, the pros and cons, and the verdict on whether it is a good deal for students.
Wells Fargo student loan refinancing
If you are a student with multiple student loans from private lenders, you can consolidate them into one loan from Wells Fargo. The potential benefits include easier management and a lower cost.
You may be wondering, “Are there Wells Fargo federal student loan refinance options?” At this time, there are not. Consolidation is strictly available for private student loans.
What is refinancing a loan?
Refinancing a loan is when you get a loan from a new lender and use it to pay off your old lenders. For example, if you have private student loans from three separate companies, you would add up the total amount you owe on all of the loans.
Then, you would get a new loan for the full amount. Your old loans will be paid off in full, and you’d only owe one monthly payment to the new lender.
How does a student loan refinance work?
It works by paying your old student loans in full and then closing them out. You still owe the same amount; it is just all to one lender now. The goal for borrowers is to find a new lender that will help lower the cost of the debt.
Not only should you focus on a lower monthly payment, but also a lower total cost over the life of the loan.
A common mistake is to extend the repayment term to lower the monthly payment. This causes the total amount you pay in the long run to increase. For this reason, it is important to look at loan repayment terms as well as interest rates and fees.
Ideally, the refinance will achieve the following three things.
- There will be no fees
- The interest rate will be lower than the average of your current loans
- The loan repayment period will be equal to or shorter than the average of your current loans
Now, let’s look at how Wells Fargo fares.
Wells Fargo student loans terms and rates
Wells Fargo offers an online application process so you can find out what terms and rates you qualify for without visiting a branch. Mark Kantrowitz, Publisher and VP of Strategy at Cappex, says the interest rates are competitive.
However, the rate you get will depend on your credit history. It will also depend on whether you opt for a fixed or variable rate, and if you qualify for a discount.
There is a 0.25% interest rate discount available for borrowers who set up auto pay and another for those who have a Wells Fargo qualifying account.
As for fees, Wells Fargo does not charge any application, origination, or prepayment penalties. The only fee is for late payments. The repayment periods is either 15 or 20 years.
When it comes to loan amounts, Wells Fargo places limits on how small a loan can be, how much you can borrow at one time, and how much you can borrow in your lifetime for educational loans. Your total loan amount will have to fall within the set limits.
Lastly, Kantrowitz says Wells Fargo offers death and disability discharge and allows the release of cosigners after 24 months.
Can you refinance private student loans with Wells Fargo?
To qualify for a private consolidation loan with Wells Fargo, you must meet the following basic eligibility requirements:
- US. citizen or permanent resident
- Meet employment, credit, and debt-to-income criteria (or have a cosigner who does)
- Total loan balance must exceed $5,000
- Each loan must have a balance of at least $1,000
- Total balance can not exceed $120,000
- Wells Fargo has a lifetime limit on education related debt of $250,000 per borrower
The specifics of the employment, credit, and debt-to-income ratio criteria are not specified, so the best way to find out is to apply.
You can apply with Wells Fargo over the phone, or you can follow these steps to apply online.
1: Visit the Wells Fargo “Consolidate or Refinance Private Student Loans” page. Click “Apply Now.”
2: Answer a few questions to get more information about Wells Fargo’s consolidation loans. Click “Find my loan.”
3: Review the basics of the loan product and click “Get Started.”
4: Provide your state of residence, name, social security number, and birthday and click “Continue.”
5: Provide your contact information.
6: Provide employment and employer information.
7: Provide information on your existing loans.
8: Share whether you will be applying on your own or with a cosigner.
9: Confirm that you can read the documents that will be provided (PDFs).
10: Agree to the disclosures and apply.
At this point, Wells Fargo will check your credit and verify the information you have submitted. You will then get an offer.
Before accepting the offer, you may need to send in supporting documentation. Once the company verifies everything and approves you, they will deliver the funds to your account.
Compare the pros and cons to make a better decision.
- Competitive interest rates
- Fixed or variable interest rate options
- No origination, prepayment, or application fees
- Interest rate discounts for autopay and Wells Fargo customers
- Large, reputable bank that is available nationwide
- Allows release of cosigner after 24 months
- Easy online application
- Federal student loans are not eligible
- Credit check with hard inquiry required to get rates
- Less flexible with payment options if you fall behind
Wells Fargo is best for those who have great credit and are strictly looking to consolidate private student loans. You will likely get a competitive interest rate and decent terms. Also, if you have a cosigner, there is the possibility you might be able to release them after 24 months.
However, for people with a mix of both Federal and private loans, Wells Fargo won’t be the best choice. Other lenders can consolidate both types of loans.
Also, if you don’t have good credit, you may struggle to qualify or may get a quote for a higher interest rate than you currently have. In this case, it will be best to shop around or stick with your existing loans.
To read Wells Fargo student loan consolidation reviews, learn more about the company, and apply, click here.