Wells Fargo, one of the largest banks in the United States, is also one of the largest student loan companies. Wells Fargo Student Loans are private loans not issued through the Department of Education, but directly to the borrower for easy to access credit to cover college expenses.
Wells Fargo student loans come in four different types for undergraduates:
Collegiate Loan – These are the lowest value loans, issued only up to the cost of your education as defined by your university, minus all other loans and financial aid. A collegiate loan is excellent to cover the gaps in between the cost of attendance number provided by your college, and the amount of scholarships, grants, and public loans you are eligible to receive. A collegiate loan comes with an annual interest rate as low as prime rate plus a quarter point. At present, this rate is 3.4%. To qualify, you have to be a current undergraduate student 18 years or older, and have a consignor if your income is not large enough to qualify individually.
Education Connection Loan – Wells Fargo also offers an Education Connection loan for students who wish to borrow beyond their cost of attendance. This loan can be drawn on up to $25,000 per year, and has an interest rate only two points higher than prime. The current interest rate is 5.68%, though the rates are subject to change. To qualify, you’ll need a reliable income or a consignor, and must be enrolled in a qualified university.
Career & Community Colleges – Students who aren’t typical college age or who will be attending school for less than full time can find financing through Wells Fargo. Issued for up to $10,000 per year for 2-year schools and $20,000 per year at four year schools, the career and community colleges loan is a perfect choice for the older college student. The loan carries the same rate as an Education Connection loan, but is also offered as a fixed-rate loan.
Parent & Friend Loan – This loan is issued not to the student, but to a parent or friend who will be paying for the college education costs of someone else. With an annual interest rate as low as 4% per year as a variable rate, and a slightly higher rate for fixed loans, these are a perfect choice for the nonstudent borrower. Parent and friend loans are issued in amounts up to $25,000 per year, depending on income and creditworthiness.
Wells Fargo also offers other loans geared toward post-graduate students currently working toward new degrees, or internships, in medical care and law.
MedCap Loan – Loans extended to students to pay for medical school and expenses, these loans can be accepted for up to the full amount of the cost of attendance minus other financial aid and loan packages. Issued with a low variable rate, these are the loan of choice for students looking to turn a four year degree into a career as a medical professional.
XTRA MedCap – Beyond the cost of attendance, other loans are afforded by Wells Fargo for other medical school and internship expenses. With an XTRA loan, a borrower can accept as much as $12,500 for medical and clinical boards and exams, to displace work while studying. Alternatively, XTRA loans for $5,000 to cover the costs of internships and $15,000 to cover the cost of residency time are also offered to students. Rates for these loans are higher, at a current rate of 7% or more, or four percentage points over the prime borrowing rate.
Bar Exam – Looking to become a lawyer? Wells Fargo offers graduates up to $12,000 in loans to cover their living costs, study and materials costs, and exam placement expenditures for recent graduates seeking to take the Bar exam.
Benefits of a Wells Fargo Loan
There are a few benefits to using Wells Fargo as your preferred student loan lender. These benefits are found only with a few other lenders:
Reduced APR – If you schedule your monthly payments for a student loan so that they can be made with automatic deductions from your checking account, Wells Fargo shaves an immediate .25% off the interest rate for each and every loan outstanding. Additionally, borrowers with consignors who have open accounts at Wells Fargo can get a reduction of .5% off their interest rate. When combined, your discounted rate can be .75% lower than the initial rate offered to you, which will save you thousands of dollars over the life of the loan.
Release of Consignor and Borrow – After making 24 monthly payments in a row successfully, the borrower can appeal to Wells Fargo to request that they remove the consignor from the contract, thus ending the liability for the consignor. In most cases, these requests are granted immediately. But one other benefit often overlooked is that Wells Fargo loans are discharged should the student become fully disabled, or die before paying off the loan. Other lenders do not offer this benefit, and instead the consignor or the student’s trust or estate is used to pay off the debt. This was only recently added to Wells Fargo loans after a number of families across the country suffered serious financial burden after a young student was disabled or had passed away. Student loans cannot, under any circumstances, be discharged in bankruptcy, and they can easily outlive the working life of the borrower.