What to Do if Your Wells Fargo Student Loan Was Just Sold

What to Do if Your Wells Fargo Student Loan Was Just Sold

Wells Fargo is getting out of the student lending enterprise.

The bank introduced on the finish of 2020 that it might promote its $10 billion non-public student loan portfolio. But present debtors on the bank, which up till final yr was the nation’s third-largest non-public student lender, are simply beginning to be affected. Their loans will now be serviced by Firstmark, a division of Nelnet — the Nebraska-based student loan servicer.

Wells Fargo had already stopped accepting functions to its non-public student loan and student loan consolidation merchandise on Jan. 28. Manuel Venegas, a spokesman for Wells Fargo, stated in an announcement that the choice got here after the corporate determined to chop again on non-core companies, which included its student loan portfolio.

So, what does this imply for present Wells Fargo prospects?

Betsy Mayotte, president and founding father of The Institute of Student Loan Advisors (TISLA), says that an important factor debtors ought to know is that student loan transfers between servicers and lenders occur on a regular basis and usually don’t include any detrimental penalties for the debtors.

“When a loan is sold, the terms of the promissory note are maintained so the borrower should not see any changes in payments or interest rates,” Mayotte provides.

Ashley Dixon, lead planner of Gen Y Planning, a agency that makes a speciality of monetary planning for Millennials, says that these transfers may very well include optimistic modifications for the debtors.

According to Dixon, lenders usually go away the student loan enterprise as a result of they don’t have sufficient time or bandwidth to service the loans. So, when you wind up with a servicer that’s centered completely on student debt, you might even see some enhancements.

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Still, it pays to remain vigilant. Here are just a few tricks to make this transition as straightforward as attainable.

Keep Making Your Payments as Usual

Loan transfers don’t occur in a single day. In the case of Wells Fargo, the switch to Firstmark is anticipated to be accomplished by mid-2021. Until then, you must preserve making funds to your present servicer as you often do to keep away from any late charges or any detrimental surprises in your credit report.

Once you get a letter out of your new servicer notifying you that the switch has been finalized, be sure to create a brand new account with them to proceed making your funds. Remember: loans are transferred mechanically however your funds aren’t.

Make Sure Your Contact Information is Up to Date

Sometimes we transfer or change our telephone numbers and neglect to tell each lender. During transitions, it’s particularly essential that your entire info is updated, so that you just obtain your entire new account info in a well timed method.

Be on the Lookout for Mail from Your New Servicer, Firstmark

Even when you’re enrolled in digital communications, you must nonetheless obtain two essential letters by mail. The first one is a letter out of your present lender informing you of the sale and offering you particulars about which accounts can be transferred. The second letter needs to be out of your new servicer. This one ought to provide you with particulars such because the steps to create a brand new account, your loan’s reimbursement schedule, and the place to ship the funds.

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Have Everything on Record

Although the loan switch course of needs to be seamless, there’s all the time an opportunity that some issues might fall by means of the cracks. This is why Mayotte, from TISLA, says you must all the time make a copy of your promissory observe helpful, so you may confirm the phrases and situations of your loan if wanted.

She additionally recommends downloading and saving copies of your most up-to-date funds. Wells Fargo’s digital platform solely permits debtors to lookup statements as much as two years outdated, so when you’d like a duplicate of your full fee historical past, you must contact them to request it.

Remember that when your loans are transferred to Firstmark, the one factor that might change is your due date, every little thing else (curiosity, phrases, and fee quantity) ought to stay the identical. If something appears amiss, be sure to contact the corporate.

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Keep a Close Eye on Your Credit Score

Dixon, from Gen Y Planning, says that even when you’ve by no means missed a fee, you must nonetheless preserve tabs in your credit rating throughout the first few months after the transition.

“Don’t rely on them to make sure it all goes through,” Dixon says.

While it’s unusual, it’s attainable that among the final funds made to your outdated servicer don’t get posted on the date they need to. Even although it’s an sincere mistake, credit bureaus don’t know this and might nonetheless report it as a late fee, which may damage your credit. If this occurs, contact the lender to ensure they appropriate it straight away.

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