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Payments that Rebuild Equity

Myth

My monthly payments will increase after the draw period.

Truth

Our payments include principal and interest, so you keep the same payment structure as in the draw period.
Our home equity line of credit features principal-plus-interest payments, unlike other lenders' interest-only payments. This means you automatically pay down a portion of your principal balance every month. As your balance is reduced, so is the amount you pay in interest, which helps you rebuild equity from your very first payment.

Even after your draw period ends, your payment structure will stay the same. The only change is that you'll no longer be able to access funds.

The example below illustrates the benefits of principal-reducing payments on a $20,000 cash advance from a home equity line of credit. Our Wells Fargo customer not only paid down $3,856 in principal, but also paid $836 less in interest during the draw period, compared to someone who paid interest only.


Comparison of Wells Fargo's payments that include principal and other lenders' interest-only payments. Both starting with beginning balance of $20,000, will result in the balance at the end of the draw of $20,000 from other lenders, and $16,144 from Wells Fargo. Interest paid to other lenders will be $9,500, and to Wells Fargo will be $8,664. Bar graph showing beginning balance, balance at end of draw, and interest paid for other lenders' interest-only payments and Wells Fargo's payments that include principal. The Wells Fargo customer paid down $3,856 in principal during the draw period, plus paid $836 less in interest.

Assumes 4.75% APR with no change in prime rate and no additional advances throughout draw period. The other lender's monthly payment is $79.17 compared to the Wells Fargo monthly payment of $104.33. Your Wells Fargo minimum monthly payment will be the lesser of $100.00 or the amount needed to repay your balance with interest.

 Tip 

You can pay additional principal each month to reduce your balance even faster.