Wells Fargo (WFC) says it is rolling out a special student loan program with Amazon.com. It made the announcement on Thursday, several days after it solidified plans to launch a robo-advisor service early next year.
The bank, which says it is the largest student lender of U.S. commercial banks, will offer an interest-rate discount of 0.5% to student customers of Amazon Prime, a membership program offered by the online retailer which offers free two-day shipping, video streaming and other services.
“We are focused on innovation and meeting our customers where they are – and increasingly that is in the digital space,” said John Rasmussen, Wells Fargo’s head of Personal Lending Group. “This is a tremendous opportunity to bring together two great brands. At Amazon and Wells Fargo, delivering exceptional customer service and helping customers are at the center of everything we do.”
According to the bank, this discount also can be added to a 0.25% interest rate cut for those who enroll in an automatic monthly loan repayment plan with the bank.
Amazon Prime Student lets those in college sign up for a six-month, sponsored trial of the program with no charge. Afterward, they must pay $49 a year, which is half the price of a regular membership.
When it announced its second-quarter earnings last week, the bank said its Wells Fargo Wallet for Android service, which will be integrated into the existing Wells Fargo mobile application, should launch later this month. A service for real-time payments to be made between its 18 million mobile customers should start Aug. 1.
Wells Fargo Education Financial Services, which began offering student loans in 1968, has some 1.05 million students, parents and other family members as clients. The bank itself has some $1.8 trillion in client assets and serves one in three U.S. households.
In the second quarter, the bank’s total loans grew 8% from a year ago to $957.2 billion. Student loans, securities-based lending and other personal lines (which do not include mortgages, auto loans or credit cards) expanded 6% to roughly $40 billion in Q2’16 from Q2’15.
Student loans totaled $12.3 billion as of June 30, up 2% from last year but down 2% from the prior quarter. The bank says originations in this category are up 9% from a year ago.
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