Many lenders offer incentives to encourage borrowers to choose their loan product. These incentives are commonly referred to as“Borrower Benefits,” and they come in several forms.Automatic Some Borrower Benefits are “automatic,” meaning that you automatically receive the incentive or benefit without
having to qualify.
Earned Some Borrower Benefits are “earned,” meaning that you must qualify for them first. A common earned Borrower Benefit is an interest rate reduction for setting up automatic payments; another is an interest rate reduction for a pre-determined number of on-time payments. Note that “earned” benefits can
sometimes be “un-earned” if you stop meeting the requirements.
Ask your selected lender for details about borrower benefits, including requirements to qualify and/or to later be disqualified or them.
Examples of Borrower Benefits can include:
Interest Rate Reduction: Usually a percentage by which the interest rate on the consolidation loan will decrease after a certain number of months of ontime payments.
Principal Reduction: Usually a percentage of the original principal balance of the loan that is deducted from the amount owed–earned after a certain number of months of ontime payment.
SOURCE: consolidationcomparison.com
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