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Auto Loan, Reviews

Review: Wells Fargo Auto Loan

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Wells Fargo Auto Loan

If it’s time to get a new or used car, it’s time to do your research. Perhaps you’ve picked out the car of your dreams and you want to figure out the best way to pay for it.

When it comes to financing a vehicle, you have a ton of choices. Wells Fargo, founded in 1852, is one of many places to consider getting an auto loan from.

Wells Fargo Auto, a division of Wells Fargo Bank, serves more than 3 million auto loan customers throughout the United States.

About Wells Fargo

Wells Fargo offers new and used vehicle financing through its network of 11,000 active car dealerships, but it’s possible to apply with the bank directly if you’re interested in financing outside of the dealership or refinancing an existing auto loan. You could also use a Wells Fargo personal line of credit or loan to buy a car from a private seller or buy out your leased vehicle, but you may have to pay an annual fee or origination fee. A home equity loan or line of credit is another possibility but puts your home at risk should you default on your car payments.

It’s worth noting that Wells Fargo continues to compensate auto loan customers who were charged for insurance they didn’t need or add-ons after their car loans were repaid or their vehicles repossessed. The bank’s redress program came after a December 2018 settlement with attorneys general from all 50 states calling for $422 million to be repaid to auto loan customers.

Wells Fargo: At a glance

  • Loan terms up to 75months
  • Loan amounts between $5,000and $100,000for new and used auto loans.

Because a majority of Wells Fargo’s loans are through dealerships, what’s known as indirect lending, you may not know your exact rate or terms until you apply through a dealership. A Wells Fargo spokesperson said rates are based on a number of factors, including the borrower’s credit history. While the lowest rates tend to go to those with excellent credit, it’s possible to be approved with less-than-stellar scores at Wells Fargo.

Wells Fargo also offers loans for those looking for specialty vehicles like motorcycles or recreational vehicles. Existing customers may be eligible for a discount if they use autopay to make their vehicle payments from a Wells Fargo consumer checking account.

A closer look at Wells Fargo auto loans

Highlights of Wells Fargo auto loans

  • Multiple ways to pay: You could make your car payment through the bank’s online eServices function, automatic loan payments or at any Wells Fargo branch.
  • APR discount: Wells Fargo offers a 0.25% discount for existing customers who use a consumer checking account to make automatic payments on its car loans.

Lowlights of a Wells Fargo auto loan

  • Mix of direct and indirect loans: While it’s possible to apply directly through Wells Fargo for an auto loan, most of its auto lending is through dealerships.
  • Negative press: In addition to fines Wells Fargo has had to pay in regards to its auto loan customers, it has been fined for the way it treated mortgage customers as well. In all, the bank has agreed to pay billions in settlements and consent orders.

How to apply

As we’ve already mentioned, most customers apply through one of 11,000 dealerships in the Wells Fargo network. But applying outside of the dealership is possible — a Wells Fargo spokesperson said customers may call or visit a branch for more options. It’s possible to apply for a refinance loan online, in person or by calling 800-289-8004. We’ll talk more about refinance loans in more detail, below.

Here’s what the bank will want to know about you and your car:

  • Personal information: Address, contact information, date of birth and Social Security number.
  • Country of citizenship information
  • Marital status (Wisconsin only)
  • Housing information: Whether you rent or own and for how much as well as information about previous recent addresses
  • Income information: Your occupation, gross monthly income and previous employer
  • Information about your car: Year, VIN, mileage and remaining loan balance. You can find out your remaining loan balance by calling your current lender.

The fine print on an auto refinance loan

The only way to make sure you’re getting your best deal on a loan for a new car or to refinance the one you have is to shop around. Make sure a refinance really is in your best interest and that you understand Wells Fargo’s criteria before you sign:

  • Minimum loan amount of $7,500
  • Co-signers allowed
  • Not offered in Alaska, Arkansas, Hawaii, Louisiana, North Dakota or Washington, D.C.
  • May be difficult to get approved if your vehicle has more than 100,000 miles or is 8 years or older.

Once you have applied, Wells Fargo will contact you by phone, mail or email. You’ll have the option of signing and returning the loan package by mail or finishing the process online.

Who is a Wells Fargo auto loan best for?

Wells Fargo auto loans can be a good fit for those in the market for a new or used vehicle, or folks looking to refinance a current loan. It may be the best option for existing Wells Fargo customers looking to refinance — it’s possible to apply directly through the bank, online and, if you’re willing to make auto payments, you may score a lower interest rate.

A Wells Fargo auto loan might be good for anyone shopping for a new or used car as well, but the only way to make sure you’re getting your best rate, particularly if it’s one offered through the dealership, is by comparing it with your preapproval offer from another bank, credit union or online lender.

A Wells Fargo auto loan is not a good fit for anyone interested in a private party auto loan. For those, look to competitors such as Lightstream, Bank of America or a credit union.

Lindsay Martell contributed to this report.

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Federal Student Loan Rates to Ease Back Down for 2019-2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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After back-to-back increases in the previous two summers, interest rates for federal student loans are headed lower for the coming year.

Congress sets federal student loan rates each spring, based on the yield of the benchmark 10-year Treasury note, and the new interest rates go into effect on loans disbursed from July 1 onward.

While the Department of Education had yet to post the new rates on its site, news reports put the decreases for July 2019 to June 2020 as:

  • Undergraduate Direct Subsidized and Unsubsidized Loans: 4.53% (down from 5.05%)
  • Graduate Direct Unsubsidized Loans: 6.08% (down from 6.6%)
  • Graduate PLUS and Parent PLUS Loans: 7.08% (down from 7.6%)

Federal loan interest rates last declined in July 2016, with the undergraduate direct loans falling by about half a percentage point to 3.76%, for example.

Federal student loans also come with loan origination fees, but those generally change in October. For the 2018-19 period they were:

  • Undergraduate Direct Subsidized and Unsubsidized Loans: 1.062%
  • Graduate Direct Unsubsidized Loans: 1.062%
  • Graduate PLUS and Parent PLUS Loans: 4.248%

For more on the true costs of federal student loans, check out our complete guide, including all the various types of loans and strategies for repayment.

This report originally appeared on Student Loan Hero, which like MagnifyMoney, is part of LendingTree.

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Americans With Holiday Debt Added an Average of $1,230 — Up From $1,054 in 2017

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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Consumers taking on holiday debt this season used more credit than last year, piling on an average $1,230, according to an annual survey conducted by MagnifyMoney. This marked an increase from $1,054 during the 2017 holiday season, and $1,003 in 2016.

And what’s more, most of those borrowing for the holidays — a full 64% — said they hadn’t expected to resort to debt for their seasonal spending.

Plastic is still king

In terms of the funding details, 68% of those with holiday debt put it on credit cards, about the same as last year, the survey found.

Personal loans were the second-most common way to finance the season’s costs, with 14%. Store cards came in third, cited as a primary means of credit by 10% of those taking on holiday debt.

The breakdown comes as online shopping is expected to be “especially strong,” with a 19.1% rise over the last year, according to Mastercard’s SpendingPulse™ forecast released Dec. 26.

This is more than double what was spent in e-commerce five years ago, and compares to a 5% growth for total retail sales, excluding automotives, according to the forecast, which covered Nov. 1-Dec. 24 period.

Millennials most dependent on credit

Our survey also showed that the level of holiday debt was heavier on younger consumers.

Millennials with holiday debt spent the most on credit, with an average $1,318. Gen Xers came next, at $1,272, followed by baby boomers, with an average of $1,186.

Lingering, stressful debt

Among respondents with holiday debt, 62% reported feeling stressed about it. Some of this might be because, as mentioned earlier, a similar percentage said they hadn’t planned to fund their holidays with credit. But the lingering nature of the debt could be a factor as well.

Almost half of the holiday debtors surveyed (49%) said it would take five months or longer to pay off the season’s debt, including 22% who said they only plan to make minimum payments on that debt.

In fact, MagnifyMoney’s Credit Payoff calculator shows it would take more than five years to repay $1,230 in holiday debt if you make minimum payments of $30 a month at an annual percentage rate of 16.5%, which is the current national average credit card interest rate, according to recent Federal Reserve data. This would include a hefty $592 worth of interest.

On the other hand, 42% of those surveyed with holiday debt said they expect to have it paid off in three months or less.

Not all interest is equal

With most holiday deficit spending done on credit cards, the potentially heavy interest costs for the 2018 holiday season might not come as much of a surprise. As we’ve reported, Americans are already paying over $100 billion in credit card interest annually, up by more than 35% over the last five years.

But while 16.5% might be the current average credit card APR, not everyone is paying that much. Among those taking on holiday debt, 38% reported paying 10% or less in interest. This includes those savvy consumers taking advantage of 0% APR offers, although just 27% of respondents with holiday debt said they were considering a balance transfer to lower the rate on their credit cards.

Taking measures to slash the interest on your debt — whether through 0% balance transfer cards or even paying off that debt under a consolidation loan — are generally wise moves. If you find yourself snowed under with credit card bills this holiday season, consider ways to save on interest as your repay them in the new year.

Methodology: MagnifyMoney conducted an online survey via Qualtrics from December 21-24, 2018, with 769 adults who reported they added debt over the holidays this year. Percentages may not add up to 100% due to rounding. The margin of error is +/- 4%, and the incidence rate was 35% from a sample of 2,180 adults.

2018 Post-holiday debt survey questions

Average debt among shoppers who said they went into debt over the holidays

2018: $1,230

2017: $1,054

Average debt by generation among shoppers who said they went into debt over the holidays

Millennials (age 22-37): $1,318

Gen X (age 38-53): $1,272

Boomers (age 54-72): $1,186

Did you plan to go into debt this year?

Yes: 36%

No: 64%

How much debt did you take on over the holidays?

Under $1,000: 54%

$1,000-1,999: 22%

$2,000-2,999: 13%

$3,000-3,999: 4%

$4,000-4,999: 1%

$5,000-5,999: 5%

$6,000+: 1%

Where did your holiday debt come from?

Credit cards: 68%

Personal loan: 14%

Store cards: 10%

Payday / title loan: 7%

Home equity loan: 1%

When will you pay the debt off?

1 month: 11%

2 months: 13%

3 months: 18%

4 months: 9%

5 months+: 27%

I’m only making minimum payments: 22%

Will you try to consolidate your debt or shop around for a good balance transfer rate?

Yes: 27%

No – don’t want to deal with another bank: 15%

No – too many traps: 11%

No – Rate is already low: 16%

No – Don’t know enough about it: 18%

No – Wouldn’t qualify: 14%

How stressed are you about your holiday debt?

Stressed: 62%

Not stressed: 38%

What interest rate are you paying on your debt? (percent)
Less than 10%: 38%

10-19%: 30%

20-29%: 25%

30%+: 7%