Wells Fargo Flex Loan: 2024 Review

Wells Fargo’s small-dollar loan, Flex Loan, allows customers to borrow $250 or $500 for a flat fee of $12 or $20, respectively. The loan is repaid over four monthly installments with zero interest or additional fees.

Only existing Wells Fargo customers can be offered a Flex Loan, and borrowers can check the bank's mobile app for preapproval. Once you accept a loan offer, the funds are immediately deposited into your Wells Fargo bank account.

Wells Fargo joins a growing list of large banks offering small-dollar loans as an alternative to costly payday loans. Although Flex Loan can help cover a one-time emergency expense or bridge a gap when you’re short on cash, small-dollar loans are an expensive option for repeat borrowing.

» COMPARE: Best small personal loans

Wells Fargo Flex Loan requirements

Unlike small-dollar loans from other banks, there’s no application for Wells Fargo’s Flex Loan. Preapproval doesn't require a credit check, but there may be a hard credit check when you accept the offer.

You can check if you’re eligible for a Flex Loan by signing into the bank's mobile app. Although Wells Fargo doesn’t disclose its qualification criteria, your relationship with the bank likely plays a role. Maintaining a positive account balance and making regular deposits could help you get preapproved.

Once you accept the loan, the funds will be available in your Wells Fargo account within seconds, according to the bank. The repayment plan is four monthly installments, which you can make through automatic payments or online transfers from your Wells Fargo account.

Wells Fargo Flex Loan costs

The Flex Loan carries either a $12 or $20 fee, depending on the amount you borrow. This is the total cost to borrow, or annual percentage rate, based on the loan amount, with the smaller loan charging more.

For example, if you borrow $250, the loan carries a 22.82% APR. If you borrow $500, it will have a 19.05% APR.

A Flex Loan is much cheaper than a payday loan, which can have an APR of almost 400%. The four-month repayment term is also longer than the two-week repayment term most payday lenders offer.

There are also no fees for late payments.

Loan example: A $250 loan with an APR of 22.82% repaid over four months would carry:

• Total interest: $12.

• Total amount due: $262.

• Monthly payments: $65.50.

How Wells Fargo Flex Loan compares

Even at the $250 amount, Flex Loan’s APR doesn’t exceed 36%, which is the maximum APR a loan can have to be affordable, according to consumer advocates.

But you may have more flexible options with other banks. For example, Bank of America’s Balance Assist loan and U.S. Bank’s Simple Loan let you borrow only what you need, up to $500 or $1,000, respectively. Both have shorter repayment terms of three months.

A small-dollar loan from either of these banks could also be cheaper, depending on the amount borrowed, but you need to be an existing customer to be eligible.

Another option is a personal loan from a credit union. Credit unions offer small loans, and interest rates may be lower for borrowers with fair or bad credit (689 credit score or lower) compared with other lenders. You’ll need to become a member before applying.

Online lenders also offer personal loans, but rates may differ depending on your credit score. These loans start at $1,000 and are often funded the same or the next day after approval.

» COMPARE: Best bad-credit online loans

Wells Fargo Flex Loan isn't a good idea if

• Your main goal is to build credit: Wells Fargo may report late or missed payments to the credit bureaus (Experian, Equifax and TransUnion), but not on-time payments. So if you are looking to build your credit, there may be better options. Look for a financing product with a longer repayment term, such as a secured credit card or credit-builder loan, to build your history of on-time payments. Chipping away at debt can also improve your credit. If you don't know your credit score, check it for free on NerdWallet.

• You regularly overdraw your accounts: Though Flex Loan’s flat fees may seem straightforward, ensure you can still afford the four monthly installments. See how they fit into your budget before opting for the loan.

• You can get cash elsewhere: Paying with cash is always cheaper since there’s no interest. Consider ways to earn extra money before borrowing from a bank or other lender.

Alternatives to Wells Fargo Flex Loan

Here are alternatives that may be cheaper than Flex Loan.