Funding college has become an expensive business and many students do not qualify for enough scholarships, grants or financial aid to cover all their financial needs. If parents want to assist their child by funding some of the costs, or to reduce the total loan burden which their child would otherwise shoulder in their own name, student loans for parents are an option. Wells Fargo offers one such loan which has the option of either a fixed or variable interest rate.
The Wells Fargo student loan for parents is available to any eligible adult who wishes to help the student obtain their college undergraduate or graduate degree. The loan carries no application fee, no origination fee and no early payments fees. It is available providing the student is enrolled at an eligible school. If the student is in receipt of federal student loans these must be utilized before private student loans are applied for.
The loan carries a current fixed interest rate starting at 7.99% which is higher than that levied on the federal parent PLUS loan. However the Wells Fargo loan offers the choice of a variable interest rate which starts at the low rate of 4 % for applicants with the best credit. Those who opt for the variable rate may not necessarily qualify for the minimum rate of 4% as rates rise in scale depending upon credit up to a maximum 10.24%.
Similarly those opting for a fixed interest rate will find that rates run between 7.99% up to 14.25%. Reductions in all interest rates can be obtained though. Parents or sponsors who elect to make automated payments qualify for a rate reduction of 0.25%, whilst a further 0.25% reduction is offered where a prior private student loan has been issued to the student or parent by Well’s Fargo.
Those who already bank with Wells Fargo and have the PMA package qualify for a 0.5% reduction. Total qualifying discounts are allowable up to 0.75%. Thus parents with excellent credit could see the variable rate reduced to 3.35% or the fixed rate reduced to 7.24%.
Parents or sponsors may borrow up to $25,000 per annum via the parent loan, providing the aggregate amount of loans advanced to the student does not exceed $100,000 per annum. The standard repayment term is 15 years though the loan can be paid off earlier without penalty fees.
Helping to finance a child’s college education through a parent loan is an option to consider. It should be remembered that the loan is not transferrable to the students name, but remains the responsibility of the person who obtains it.