Wells Fargo & Co. (WFC) announced Thursday the reduction of fixed interest rates for many of its private student loans, as the company tries to coincide with peak season and appeal to graduates interested in consolidating their student loan debt, as well as those who are in the midst of obtaining financing for second semester coursework.
The cuts apply to collegiate loan, student loan for parents, private consolidation loan, and student loan for career and community colleges.
Rate reductions range from 0.25 percent to 0.51 percent from Wells Fargo's previous fixed rate student loans. Rates will start at 7.24 percent for those who qualify.
"In today's economy, families are having a harder time affording college," said Kirk Bare, senior vice president at Wells Fargo Education Financial Services. "The cost of education continues to increase faster than inflation. The recession has reduced personal income, equity in homes, and investments."
In addition to the new rate reduction, borrowers who have an existing customer relationship with Wells Fargo may qualify for additional rate discounts up to 0.5 percent on new loans. And for all private student loan borrowers, setting up automatic payments can further reduce interest rate during repayment by 0.25 percent.
Wells Fargo introduced its fixed-rate option on most of its student loan products in May to offer borrower the security of knowing what payments will be each month. Variable rates are continue being offered, and usually at lower starting rates than fixed rates.
Interest rates offered by some other private student loan lenders: