Refinancing is the closest thing to a do-over button you’ll ever get with student loans. It can get you a lower interest rate, a new repayment term, and possibly even some perks (like discounts or networking opportunities).
If you're wondering how to refinance your Wells Fargo student loans, it's pretty simple. All you need to do is find a lender that can give you a lower interest rate (we'll tell you how to do this in a minute) and apply. The whole process can be completed in less than a half hour.
If you’re not satisfied with your experience with Wells Fargo, or if you just want a lower interest rate, there are plenty of great options out there.
Refinancing: what it is
Before we go deeper into your options, let's take a quick look at what you're actually doing when you refinance.
When you refinance your student loans, a private lender pays off your existing loans and issues you a single new loan with different terms and a new interest rate.
This is something people do all the time with other types of loans, such as mortgages, to get better interest rates and terms—and you can do it with your student loans as well, both private and federal.
There are pros and cons to this approach.
See also: Everything You Need to Know About Student Loan Refinancing
Cons of refinancing
There's only one real drawback to refinancing, and it only applies if you have federal loans.
If you refinance federal student loans, you'll lose access to federal benefits like student loan forgiveness and income-based repayment. You'll likely also forfeit options like deferment or forbearance, though some lenders to provide their own versions of these.
Private loans don’t qualify for those benefits, so you’re not losing out on anything at all by refinancing your private loans.
Pros of refinancing
On the pro side, if your credit is good, you could reduce your interest—by a lot.
Our data shows that the average borrower who refinances their student loans (federal or private) can lower their payment by $253 per month on average, or save over $16,000 over the life of their loans.
See also: 6 Questions to Ask Before Refinancing Student Loans
Refinancing: what it isn't
What refinancing isn’t, though, is consolidation. While the words “consolidation” and “refinancing” are often used interchangeably—they’re actually quite different.
Consolidation versus refinancing
With true consolidation, you replace a number of federal loans (and only federal loans) with a new Direct Consolidation loan through the federal government. Like refinancing, you’re replacing a number of different loans with a single loan—but that’s where the similarities end.
Unlike with refinancing, consolidation doesn’t lower your interest. Your new rate is calculated based on the weighted average of interest on all your loans, rounded up to the nearest eighth of a percent. Your interest rate doesn’t go down, and it might even go up slightly.
Wells Fargo offers a product called a “Wells Fargo Consolidation Loan.” This is actually a refinanced loan. (But we can cut them some slack for using this term; lots of lenders do.)
See also: Student Loan Refinancing and Consolidation Terms You Need to Know
So, now that you know what refinancing is and what it isn’t, let’s get into some great alternatives if you’re looking to refinance your Wells Fargo student loan with a bank other than Wells Fargo.
LendKey: for those who aren't into big banks
If you want to get away from big corporate banks, you can’t go wrong with LendKey. It matches you with small local credit unions and community banks throughout the country that you may never have found on your own.
These lenders often offer extremely competitive terms — as low as 1.9% variable APR (as of February 2020) with an autopay discount of 0.25%. Compare that to Wells Fargo, whose lowest interest rate offer is 3.0% on a variable interest rate, even with discounts.
LendKey’s goal is to make online lending both affordable and transparent. That’s a breath of fresh air if you’re concerned about all the things you’ve been seeing in the news about Wells Fargo lately.
CommonBond: for those who want to give back
If you’d prefer your student loan with a side of social activism, CommonBond may be the lender for you.
For every loan they fund, CommonBond pays for a child's education in Ghana—through a partnership with Pencils of Promise, a nonprofit that builds schools, funds technology and supplies, and sends teachers to communities in the developing world.
Even better, every year they send a group of employees and borrowers to Ghana to help build classrooms in the communities they serve. You can feel good about doing business with CommonBond.
The lender is also known for its great customer service—they've won awards—and their lowest interest rate is also lower than Wells Fargo's, at 2.02%.
Citizens One: for those who like a long track record of success
If you want a lender with brick and mortar locations, one that combines innovation with long-standing tradition, consider Citizens One.
Citizens One is the national lending division for Citizens Banks, N.A., a bank with a nearly 200-year history of serving customers and communities. It's also on the leading edge of technology trends in digital banking.
For borrowers that appreciate the credibility that comes with two centuries of experience in the banking industry, Citizens One sweetens the pot by interest rates that compete with new lenders'. Their variable rates start at 2.15%.
How to transfer your loan
Want to get a ballpark idea of how much you could saves by refinancing—without filling out an application? Check out our Refi Ready calculator. Every lender's offer will be different, but this will give you a good estimate of how much you could save based on your finances.
If you want to make the switch, it’s easy. Just fill out the application — all three of these lenders have a quick online application process, which you can find by following the links below. The process usually takes about 15 minutes or less.
The lender will ask you some basic questions about your income and other financial information. They'll do a "soft pull" on your credit—this won't affect your score—and give you a preliminary offer.
Once you accept an offer, your new lender handles all the paperwork to get your loan transferred from Wells Fargo.
You don’t have to stay stuck with a lender you aren’t crazy about—not when there are so many great options. Check out a list of our favorite lenders—those who’ve met a high standard for affordability, transparency, perks, customer service, and more.
