Getting and Keeping Your Student Loan Discounts
More and more lenders are offering discounts on student loans these days to keep you as a customer. By offering discounts, lenders believe they will keep you as a loyal customer and you won’t choose another lender. Common discounts include rate reductions for consecutive on-time payments or for signing up for automatic payments.
Although discounts are really beneficial in the long run, there are some tips you should consider in order to keep them. Student loan discounts may be easy to get, but hard to keep if you’re not careful. Read through the tips below and keep them in mind so you will not only get, but keep your student loan discounts:
- Be realistic with yourself. A common interest rate reduction discount is offered if you pay your loans on-time, but it’s for all of the payments. Do you think you’ll be able to make all of your payments on time? Be careful when you look at discounts that require you to make 100% of your payments on time. In order to keep the discount, you’ll have to be very disciplined to make 100% of your payments on time.
- A lender may cancel the discount after one late payment. When a repayment incentive requires on-time payments, prefer those that involve a shorter time period before you can qualify for the discount. A discount that is suspended for a short time period after you are late with a payment is better than one that terminates after a single late payment. So, to keep your discount, don’t be late on a single payment.
- Try to look at discounts that offer rewards in the immediate future rather than long-term. Don’t get caught up in a program that will only give you an incentive for something that will happen in 36 or 48 months. You never know what will happen in that kind of time frame. To keep your discount, try to get an incentive that offers you quicker gratification!
- To avoid having your payment delayed by the postal service, have your payment automatically drafted from your bank account. Doing so will help you keep your discount because your payments won’t be late and you won’t have to think about them.
- Speaking of mail, if you move, definitely let your lender know. You don’t want to risk losing your discount because of late payments right after your grace period ends.
- Is there a minimum balance required to keep your discount? Often, lenders offer the biggest incentives to loan holders with the highest balances. Make sure that you will keep your discount if your loan balance falls below a certain level. You may get the discount for a certain amount, but make sure you’ll be able to keep it once your balance starts declining.
- Read all of the fine print regarding your student loan discount. To keep your discount, you want to make sure that you know what exactly is expected of you. You don’t want any surprises later and risk losing your discount.
- It’s important to find out how your lender defines “on time” payments. Is there a grace period? If so, how long? When are payments considered late? Will one late payment cancel any discounts received?
These are just a few of the criteria you should look at when analyzing your student loan discount to see if you’ll be able to keep it for the long run. Don’t be afraid to ask your lender questions.