09 billion and a settlement with the Maryland Attorney General for $20 million , both for alleged practices that contributed to the subprime mortgage crisis that occurred between 2005 and 2009. These allegations did not include any issues related to student lending practices, however.
Wells Fargo: Potential Benefits for Borrowers
If you don’t have a private student loan with Wells Fargo, the option is now closed to you, as described above. However, if you have an existing student loan with them and have enjoyed the experience so far, you can still take out additional student loans for a few more months.
- Discounted loan rates if you or your co-signer have existing Wells Fargo accounts: If you have an existing student loan or a consumer checking account with Wells Fargo, you can receive a 0.25% rate discount . If you have a Portfolio by Wells Fargo, you can receive a 0.50% rate discount.
- No application, origination, or late fees: Wells Fargo charges no fees for applying, and there are no origination or late fees on the loans either.
- Discount for entering an automatic payment program: When you enter repayment, you can lower costs even more by
setting up automatic payments. This lowers your interest rate by an additional 0.25%.
- No payments required while in school or six months after: You are not required to make any payments while in school, and there is an additional six-month grace period after you leave school before repayment begins. You will receive a notice approximately 45 days before your first payment will be due, so you will have plenty of time to plan.
- Payment relief and forbearance options during times of financial hardship: If you return to school, serve in the military, or enroll in graduate school, you can enter forbearance and postpone payments. The grace period can also be extended for an additional six months if you are having difficulty. If you face financial hardship, you can also receive up to two months of payment relief if you have been consistently making payments.
Wells Fargo: Potential Drawbacks for Borrowers
As mentioned, it seems many customers have had negative experiences with Wells Fargo, although this is not true for everyone. However, at this time, the main drawback is that you won’t be able to get private student loans from Wells Fargo for much longer.
- Only those with existing Wells Fargo Private Student Loans can take out new ones: Wells Fargo is exiting the private student loan business. In phasing out their program, they are currently only extending new loans to those with current Wells Fargo student loans. Moreover, you must not have paid off your existing Wells Fargo student loans to qualify. So, if you took a loan out years ago and paid it off already, you won’t be able to borrow again.
- The application period ends permanently on : You can only get a loan for the 2020-2021 school year and not beyond. This may be fine if you are finishing school, but if you are continuing past the end of this school year, you will need to seek a new lender.
- No soft pull rate check available: To find out what rates you qualify for, Wells Fargo requires a hard pull on your credit, so you can’t get an estimate of rates without an impact on your credit. But since all loan customers must have current loans with Wells Fargo, you can likely estimate what your rates will be based on what you previously qualified for.
