By Jim Donovan: In a departure from industry practice, Wells Fargo says it has begun offering fixed-rate students loans. Typically private loans issued by banks come with variable interest rates.
The new fixed rate option will be offered on four of Wells Fargo’s student loan products including Wells Fargo Collegiate Loan, Wells Fargo Student Loan for Parents, Wells Fargo Student Loan for Career and Community Colleges and Wells Fargo Private Consolidation Loan.
Wells Fargo says that the loans will range from 7.75 percent to 14.25 percent depending on the credit report of the applicant or co-signer. Customers with a prior Wells Fargo federal or private student loan or a Wells Fargo qualified banking relationship may receive additional interest rate discounts up to 1.00% on their new student loan.
I should point out that even at the lower rates, these fixed-rates are higher than the 6.8% rate charged on most federal student loans.