Lender Incentives and Benefits

Some lenders will offer you incentives for choosing their loan products.  Usually these incentives take the form of interest rate reductions or principal reductions.  Some lender incentives are automatically received just for choosing a loan product, while others are earned by meeting specific qualification standards.

As an example of an earned benefit, lenders sometimes offer a reduction in the interest rate contingent upon you signing up for an auto-pay program.  Auto-pay is a program where you set up your monthly payment to be automatically removed from your account.  Other lenders might offer you a reduction in interest after you’ve made a pre-determined number of payments (on time).  Whatever the qualifications, be sure you understand the terms before you’ve agreed to any loan. 

Additionally, it’s important to understand that incentives can be taken away if the qualifications are not maintained.  In some instances, all it takes is one late payment and your interest rate will go back up.  Be sure to read not only the terms and conditions of the qualification, but also the requirements for maintaining those incentives for the life of the loan. 

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