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High Interest Rate Personal Loan from Wells Fargo

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Established Contributor

High Interest Rate Personal Loan from Wells Fargo

Hello! 


So I got a thing in the mail for a personal loan from Wells Fargo advertising their super low rates (and even lower if you were a loyal account holder). I've been with Wells Fargo for over 10 years and thought ok let's do this! I had a couple thousand on my PenFed card from paying off a stupid collection (that I still think was a scam, but oh well) and I wanted to pay it off and just make payments on a small loan. So I apply and was hit with 21.74%!! That's $600 in interest that I would have to pay over the life of the loan. I've been paying it off as quickly as I can and have paid it down about 25% in 2 months.

 

So my question:  Is there a small chance that I could call Wells Fargo and get a different interest rate, or is that pretty much set in stone? I don't want any more inquiries because I already have too many on my EX report and that's what Wells Fargo always pulls for me. I understand that this is why people refinance, but I just got this loan in March, so I don't know how that would work. I feel like I'm just going to have to pay it off as quickly as I can and let it be a life lesson. Smiley Frustrated

 

Any advice is greatly appreciated HeartHeartHeart


I’m tip toeing my way back into the garden!



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 1 of 12
11 REPLIES 11
Super Contributor

Re: High Interest Rate Personal Loan from Wells Fargo

Honestly, if you've paid off 25% of the balance in two months, I wouldn't bother with a personal loan at 21%... just bite the bullet for six more months and be done with it.

 

Good luck!

Last inquiry 31 January 19. Going for Gold!

Zero percent financing is where the devil lives...
Message 2 of 12
Established Contributor

Re: High Interest Rate Personal Loan from Wells Fargo

Yeah that's what I was afraid of. I guess lesson learned! I don't know why they gave me such a high interest rate to begin with. My credit is in the 720's (at least for EX which they pulled), but I'm guessing I just had too many new accounts? Eh whatevs. I've actually paid off 40% (my math was WAY off), so I should be able to pay the rest off in another 2-3 moths. Again, lesson learned. Smiley Wink


I’m tip toeing my way back into the garden!



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 3 of 12
Moderator Emeritus

Re: High Interest Rate Personal Loan from Wells Fargo

Personal loan APR’s are basically all over the map but generally banks will be higher than CU’s: historically before the rise of P2P lending personal loans were literally the hardest thing to get underwritten.

They are still probably the hardest to qualify for but the standards have come way down.

In reading your post I think you actually picked up the WF loan? Assuming you are making big regular payments to it, what is it doing to your due date?

Well done on the cash flow side btw.



        
Message 4 of 12
Established Contributor

Re: High Interest Rate Personal Loan from Wells Fargo


@Revelate wrote:
Personal loan APR’s are basically all over the map but generally banks will be higher than CU’s: historically before the rise of P2P lending personal loans were literally the hardest thing to get underwritten.

They are still probably the hardest to qualify for but the standards have come way down.

In reading your post I think you actually picked up the WF loan? Assuming you are making big regular payments to it, what is it doing to your due date?

Well done on the cash flow side btw.

My due date has stayed the same, which is the 10th of every month. In fact, I just got an email this morning reminding me that my payment of $469 is due on 6/10. I just finished paying my dad back for helping with my downpayment on my car last October, so I've been using that extra money towards the personal loan. It was $5,000 and I paid $500 the first day because of the stupid high interest. I've paid it down to $3,000 and will be putting another $600 towards principle only after that $469 payment. I'm just sitting here kicking myself. I'm tempted to just ask my dad for the money again and then pay him back (interest free, of course!), but I don't know... If I can pay it off in 3 months, that's only another like $100 of interest. 

 

Does the due date usually change when you pay a loan off faster than the terms? I read through the loan docs and it says there's no penalty for paying early and it's just a simple interest loan.


I’m tip toeing my way back into the garden!



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 5 of 12
Moderator Emeritus

Re: High Interest Rate Personal Loan from Wells Fargo


@Queen_Etherea wrote:

@Revelate wrote:
Personal loan APR’s are basically all over the map but generally banks will be higher than CU’s: historically before the rise of P2P lending personal loans were literally the hardest thing to get underwritten.

They are still probably the hardest to qualify for but the standards have come way down.

In reading your post I think you actually picked up the WF loan? Assuming you are making big regular payments to it, what is it doing to your due date?

Well done on the cash flow side btw.

My due date has stayed the same, which is the 10th of every month. In fact, I just got an email this morning reminding me that my payment of $469 is due on 6/10. I just finished paying my dad back for helping with my downpayment on my car last October, so I've been using that extra money towards the personal loan. It was $5,000 and I paid $500 the first day because of the stupid high interest. I've paid it down to $3,000 and will be putting another $600 towards principle only after that $469 payment. I'm just sitting here kicking myself. I'm tempted to just ask my dad for the money again and then pay him back (interest free, of course!), but I don't know... If I can pay it off in 3 months, that's only another like $100 of interest. 

 

Does the due date usually change when you pay a loan off faster than the terms? I read through the loan docs and it says there's no penalty for paying early and it's just a simple interest loan.


It really depends on the lender in question; most, not all, but most I have tried have moved the date forward on a regular payment; by that I mean explicitly not a principal-only payment which absolutely will not move your due date for anyone.

 

Some though will reset the date back, or have a maximum date that you can push it out; DCU resets, First Tech I couldn't really pay forward at all so it's on a case by case basis and it sounds like assuming you're just overpaying each payment due that Wells does not move forward, which is helpful information.  I'd done a Wells Fargo Dealer Services auto loan back in 2011 and they pushed due dates forward no problem, but they could be separate or maybe Wells just changed.  

 

I do know my current US Bank auto loan is pushing forward just fine as another big bank example, over the last six weeks I've paid off a non-trivial portion of the loan and now my due date is June 2021, but basically it's a handy little trick to pay down the loan fast, and if it pushes the due date forward you pay it almost all the way off, but not quite, kind of like AZEO actually for installment loans now that I think about it, as that's a non-trivial win on FICO 8/9 and in my data EX FICO 2 too.  I don't know how to really get good data on this though except to start collecting stories like yours in terms of which lenders push forward and which don't.

 

Sadly if you're like me and have multiple loans, like a mortgage that certainly appears to be killing that metric, it's based on aggregate so playing this game on one doesn't mean much... but in your case regardless of whether it pushes forward or not at 20% APR or whatever I'd be paying that down or outright off as fast as I could.

 

But it's enough of a thing that if rates drop enough to where it makes sense for me to refi to lower my payment, I'm going to look hard at which lender I'm going with from a servicing perspective to see what they do, I may ask Alliant if they portfolio the loans, do a cash out refi, and then turn right around and pay all that cash taken out of the equity right back to them, which admittedly is a bit of an insane plan just to optimize FICO but if it doesn't cost me anything really except a bit more in origination such that I can keep that loan on my report for 30 years in it's paid down state, well...  Reindeer Games God Father indeed as Cassie suggested haha.




        
Message 6 of 12
Established Contributor

Re: High Interest Rate Personal Loan from Wells Fargo

Yeah it seems like they don't push the date forward if you pay your initial monthly payment and then add more principle payments only. That's what I've been doing. I pay the monthly, then I apply any other payments after to the principle only. That way, it can lower my daily rate and I won't have to pay as much interest for as long as I have this stupid loan. I initially tried to get one with PenFed, but was denied! I've had an auto loan with them for 2 years (which is now fully paid off, no lates), and I have my PowerCash Rewards, which also has no lates, no high utilization. I was shocked when they denied me, but it is what it is. They wouldn't even approve me for my new car. I had to go with Honda Financial Services for that loan. PenFed would only approve me for $18,000, but I needed about $24,000. I guess I need to build that relationship a little more. 

 

My whole reason for doing this was to build even more of a relationship with Wells Fargo. I've been a customer with them for over 10 years, but only checking/savings. My credit card is only a few years old, so I wanted to have a loan under my belt as well. We'll be looking for a house soon, so if I can get in good with a lender, I'm certainly going to try. 


I’m tip toeing my way back into the garden!



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 7 of 12
Moderator Emeritus

Re: High Interest Rate Personal Loan from Wells Fargo


@Queen_Etherea wrote:

Yeah it seems like they don't push the date forward if you pay your initial monthly payment and then add more principle payments only. That's what I've been doing. I pay the monthly, then I apply any other payments after to the principle only. That way, it can lower my daily rate and I won't have to pay as much interest for as long as I have this stupid loan. I initially tried to get one with PenFed, but was denied! I've had an auto loan with them for 2 years (which is now fully paid off, no lates), and I have my PowerCash Rewards, which also has no lates, no high utilization. I was shocked when they denied me, but it is what it is. They wouldn't even approve me for my new car. I had to go with Honda Financial Services for that loan. PenFed would only approve me for $18,000, but I needed about $24,000. I guess I need to build that relationship a little more. 

 

My whole reason for doing this was to build even more of a relationship with Wells Fargo. I've been a customer with them for over 10 years, but only checking/savings. My credit card is only a few years old, so I wanted to have a loan under my belt as well. We'll be looking for a house soon, so if I can get in good with a lender, I'm certainly going to try. 


Actually, stop paying more to principle-only directly and do it differently. Smiley Happy

 

Here's how simple interest loans work: a regular payment zeroes any interest, and then the rest is applied to principle: this is true if you make a lump sum payment or multiple regular payments over the course of the month.  What that means is if you overpay, all that overpayment goes straight to principle anyway because the accrued interest on the loan has already been paid... so not only do you still get the loan paydown you're looking for (absolutely identical actually to what you're doing now), but you also might push your due date forward as many lenders will count it towards future payments too.

 

Not only does this have the possiblity for a FICO win if you pay it far enough down but not completely off, but there's another practical benefit too: you can skip a month or two if you need to redirect monies somewhere else if your due date is far out into the future.  I may skip my planned auto payment, I've got some non-trivial travel expenses I brought forward I need to pay off and I have a quarterly tax payment due July 15th (which technically with grace period is August 10ish to be fair) and with some stocks like Amazon artificially depressed I might redirect some extra cash into the market.

 

I'd absolutely give it a try, it might turn out very nicely indeed for you... and it would be a hugely helpful test for the community to know how Wells handles it specifically.




        
Message 8 of 12
Established Contributor

Re: High Interest Rate Personal Loan from Wells Fargo


@Revelate wrote:

@Queen_Etherea wrote:

Yeah it seems like they don't push the date forward if you pay your initial monthly payment and then add more principle payments only. That's what I've been doing. I pay the monthly, then I apply any other payments after to the principle only. That way, it can lower my daily rate and I won't have to pay as much interest for as long as I have this stupid loan. I initially tried to get one with PenFed, but was denied! I've had an auto loan with them for 2 years (which is now fully paid off, no lates), and I have my PowerCash Rewards, which also has no lates, no high utilization. I was shocked when they denied me, but it is what it is. They wouldn't even approve me for my new car. I had to go with Honda Financial Services for that loan. PenFed would only approve me for $18,000, but I needed about $24,000. I guess I need to build that relationship a little more. 

 

My whole reason for doing this was to build even more of a relationship with Wells Fargo. I've been a customer with them for over 10 years, but only checking/savings. My credit card is only a few years old, so I wanted to have a loan under my belt as well. We'll be looking for a house soon, so if I can get in good with a lender, I'm certainly going to try. 


Actually, stop paying more to principle-only directly and do it differently. Smiley Happy

 

Here's how simple interest loans work: a regular payment zeroes any interest, and then the rest is applied to principle: this is true if you make a lump sum payment or multiple regular payments over the course of the month.  What that means is if you overpay, all that overpayment goes straight to principle anyway because the accrued interest on the loan has already been paid... so not only do you still get the loan paydown you're looking for (absolutely identical actually to what you're doing now), but you also might push your due date forward as many lenders will count it towards future payments too.

 

Not only does this have the possiblity for a FICO win if you pay it far enough down but not completely off, but there's another practical benefit too: you can skip a month or two if you need to redirect monies somewhere else if your due date is far out into the future.  I may skip my planned auto payment, I've got some non-trivial travel expenses I brought forward I need to pay off and I have a quarterly tax payment due July 15th (which technically with grace period is August 10ish to be fair) and with some stocks like Amazon artificially depressed I might redirect some extra cash into the market.

 

I'd absolutely give it a try, it might turn out very nicely indeed for you... and it would be a hugely helpful test for the community to know how Wells handles it specifically.


Ok I'm absolutely down to try this! I'm not apping for anything any time soon, so I can play around a bit. How exactly would I do this? The options it gives me is: 

 

  • Regular payment due:  469.01
  • Other payment
  • Principal only payment

I’m tip toeing my way back into the garden!



Officially collection free as of 3/19/19!!
STARTING SCORES: 377 (11/2013) & 580 (3/2018)
Message 9 of 12
Moderator Emeritus

Re: High Interest Rate Personal Loan from Wells Fargo


@Queen_Etherea wrote:
  • Regular payment due:  469.01
  • Other payment
  • Principal only payment

So the two methods I would try: 

  1. If you can make an overpayment, namely picking Regular Payment and then insert an amount, that will work regardless of lender for what we're talking bout.
  2. If you can't do that, like if it's due amount or bust, I'd try Other Payment and see what it did: the fact there's another option besides princpal only suggests that it is an off-cycle regular payment.



        
Message 10 of 12