Wells Fargo Flex Loan: 2023 Review

Wells Fargo’s small-dollar loan, known as Flex Loan, allows customers to borrow $250 or $500 for a flat fee of $12 or $20, respectively. Then, the loan is repaid over four monthly installments with no other interest or fees.

You need to bank with Wells Fargo to take out a Flex Loan, and eligible customers can check if they have an offer in the bank's mobile app. Once you opt into Flex Loan, 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 help bridge the gap when you’re short on cash, small-dollar loans aren’t a good solution for repeat borrowing since they can charge high interest rates. 

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Wells Fargo Flex Loan requirements

Unlike small-dollar loans from other banks, there’s no application for Wells Fargo’s Flex Loan. Eligible customers are preapproved without a hard credit check, so you won’t risk a temporary hit to your credit score to apply.

You can see if you’re eligible for a Flex Loan by checking if you have an offer in the bank's mobile app. Although Wells Fargo doesn’t disclose its qualification criteria, your relationship with the bank likely plays a big role. Maintaining a positive balance in your accounts and making regular deposits could help you get preapproved.

Once you opt into the loan and agree to the repayment plan of four monthly installments, the funds will be available in your Wells Fargo account within seconds, according to the bank. 

Wells Fargo Flex Loan costs

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

For example, if you borrow $250, the loan will carry a 22.83% APR. If you borrow $500, it will carry a 19.05% APR.

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 offered by most payday lenders.

There are also no fees for late payments.

Loan example: A $250 loan with an APR of 22.83% 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 each come in $100 increments, up to $500 or $1,000, respectively, so you can borrow only what you need. 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 be higher depending on your credit score. These loans tend to start at $1,000 and often fund the same or 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: It’s unclear if Wells Fargo reports payments to the credit bureaus, but there are probably better ways to build credit. 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, get it for free on NerdWallet.

• You regularly overdraw your accounts: Though Flex Loan’s flat fees may seem straightforward, make sure 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 opting to borrow from a bank or other lender.

Alternatives to Wells Fargo Flex Loan

Here are alternatives that may be cheaper than Flex Loan.