Wells Fargo and Amazon appear to have ended their private student loan partnership.
Just six weeks after announcing that Amazon Prime members were eligible for interest rate discounts on the bank’s private student loan products, traces of the deal were removed from the online retailer’s student-centric site. Wells’ previously Amazon-focused landing page also now redirects to the bank’s generic private student loan landing page.
A spokesperson for Wells Fargo confirmed via an email to Credit.com that the promotion had ended but did not respond to request for comment as to why. Amazon similarly confirmed the promotion had ended via an email without giving a reason why.
The promotion, announced July 21, offered Prime members and their co-signers a potential 0.50% base interest rate discount on all Wells Fargo private student loan products. They were also eligible for a 0.25% interest rate reduction if they enrolled in Wells Fargo’s automatic monthly loan repayment plan.
The bank’s website currently lists the the variable interest rates on its private student loans as ranging from 3.39% to 9.03%. Its fixed interest rates range from 5.94% to 10.93%.
The promotion’s end comes on the heels of Wells’ agreement to pay a $3.6 million civil penalty to the Consumer Financial Protection Bureau to settle allegations of illegal student loan servicing practices. (The bank declined to answer questions as to whether the two were directly related.)
Private Student Loans 101
Given the climbing cost of a college education, many students may be thinking of taking on a private student loan to cover their tuition. But it’s important to do your research before applying because these loans typically tout variable interest rates that, unlike the fixed rate associated with federal student loans, can fluctuate with market conditions. They also have fewer borrower protections than federal loans. (For instance, private student lenders are not required to offer forbearance or deferment options.) And, particularly if your credit is not in tip-top shape, the interest rate on these loans can climb quite high. (You can view two of your credit scores for free each month on Credit.com.)
If you do decide to take on a private student loan, be sure to read the terms and conditions carefully to find the best financing for you. Repayment plans tend to vary by lender, and some charge fees to process forbearance and deferment requests. You can learn more about what to watch out for when applying for private student loans here.