Wells Fargo is trying something new (and user-friendly)
For many Americans, living paycheck to paycheck is a reality.
Saving a little money at the end of the month to pay the next month’s rent is usually a big financial challenge.
Other bills such as cars, electricity, insurance, telephones and internet connectivity require payments that must be timed delicately to avoid penalties such as late fees or service interruptions.
Then, groceries, gas, and maybe even a little entertainment add up to growing monthly budgets.
For many people, increasing credit card debt creates more pressure on their ability to make those payments.
In times of inflation, these items taken together can represent a significant percentage of a household’s monthly expenses.
So what happens in an emergency? Where to look for help if a car breaks down or an appliance needs repair?
For some, a solution is a short-term loan, sometimes called a payday loan or a cash advance. Unfortunately, these loans are often associated with high interest rates, which end up compounding a household’s hardship by making it difficult to repay.
A bank offers a possible solution
The concept is simple. Instead of a high interest rate for short-term loans, or any interest rate for that matter, Wells Fargo decided to offer its customers a flat rate.
Loans are available to existing Wells Fargo customers and come in amounts of $250 (for $12 flat rate) or $500 (for $20 flat rate). The company claims that the loans do not involve any hidden fees or late fees.
“Our customers are at the heart of everything we do. Flex Loan is Wells Fargo’s latest innovation to provide customers with peace of mind and flexibility in managing their day-to-day finances,” said Abeer Bhatia, head of personal loans and retail services for Wells Fargo, in a statement. Press release. “What sets Flex Loan apart from other payment options is its certainty of approval for eligible customers, the simplicity of getting funds in minutes, and the clarity of how much it will cost to pay for things like holiday gifts, trips, or an unexpected house or car repair expense.”
Wells Fargo says the loans will be available in its mobile app and stresses that the customer experience for obtaining the loans will be seamless and easy.
How to access flexible loans
Users will first locate the offer in the app. When a customer accepts the loan and agrees to a repayment plan, the funds will be immediately deposited into their bank account. Customers will then be able to use their debit cards to make purchases or payments instantly.
The repayment plan should be payable in four equal monthly installments.
“Unlike other often more expensive options, Flex Loan offers an affordable and transparent way to manage a short-term cash need, while providing convenient and near-instant access to funds,” the company says in its press release. .
Short-term loans are accessible today in select markets and should be available nationwide by the end of December.