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How to Pay for Large Expenses

Get the funds you need, when you need them

Paying for an unexpected large expense video

Maybe you’ve got a big move coming up, or your furnace is on the fritz. If you’re wondering whether you’ll have the funds you need to cover an unexpected expense, we have some options.
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How much do you need?

Narrow your options by determining how much money you need to borrow. Remember: The less you borrow now, the less you’ll have to repay later. Make a realistic assessment of your needs and estimated costs.

When do you need it?

If you need the funds quickly, keep in mind that many loan options (such as personal loan or auto equity) can be acquired within a few days. If you have flexibility, and need to borrow a larger amount, consider using your home as collateral.

What are your interest rate options?

Because interest rates determine how much it costs to borrow money, remember that higher interest rates mean higher total costs. However, the better your credit, the more favorable your interest rate options will be.

Plus, some loans offer fixed or variable rate options, so you may want to consider which type best fits your situation.

Note that an APR, or annual percentage rate, reflects the interest rate plus any associated fees, points, and the closing costs of your loan. For this reason, the APR is usually higher than the interest rate, so consider both of them when you’re exploring borrowing options.

Do you need money all at once or over time?

Determine if you need a lump sum up front, or funds to use as you need them.  For example, if you know the full amount you need, a loan might be the best fit for your needs. But if you need access to funds over time, you may want to consider a line of credit or a credit card.

Do you have assets or other collateral?

If you have equity in your home, car, or cash savings, you may want to consider a secured loan. Because secured products use your assets as a repayment guarantee, they can offer lower rates, higher amounts, and longer repayment terms. Secured borrowing can be a good option if you want to use the equity you’ve built up over time.

Types of secured loans

What is your overall financial situation?

When you’re thinking about borrowing, it’s always a good idea to assess your financial situation. Because your credit history will affect your loan options, review your credit score and your ability to repay, as well as your debt-to-income (DTI) ratio.

What is your DTI?

Ready to pay for a large expense?

Explore Wells Fargo loan and line-of-credit options for large expenses.

Compare your borrowing options

What to know before borrowing

Before you take on more debt, it’s a good idea to review your financial situation, your borrowing needs, and what lenders review when considering a credit application.

What to Consider Before Borrowing

Other factors to consider

Check your credit report before applying to make sure there are no errors and to understand what lenders will see.  Give yourself time, ideally several months to correct possible errors on your credit report.

Before applying for a new loan or line, and during the approval process, keep your credit accounts as stable as possible. Try not to apply for other new accounts or take on any additional debt at the same time. This will appear on your report and could impact your ability to be approved with the interest rate and terms you wanted.

Fixed or variable rate options

Fixed interest rates do not change over the life of the loan, whereas variable rates can fluctuate.

Debt-to-income (DTI) ratio

Your debt-to-income ratio is the percentage of your monthly income that goes toward paying down debts and other monthly expenses like rent.