Loan Incentives

Student loan incentives are repayment benefits or rewards that are offered to borrowers who meet certain conditions. They typically take the form of an interest rate or principle discount. Both federal and alternative loans offer repayment incentives; though, type and amount vary from lender to lender.

When researching alternative loan options, it can be helpful to compare loan incentives. Not all lenders offer the same discounts. Before making a decision, compare the benefits of each loan.

These are some of the most common incentives available:

  • Auto-Payment Discount - Many lenders will offer an interest rate reduction for setting up automatic payments through a bank account each month. This option is also available for federal loans.
  • Relationship Discount - Some lenders will provide interest rate discounts for borrowers who already have a relationship with the bank such as a checking or savings account.
  • Cosigner Release - After a certain number of on-time payments, borrowers may release their cosigner from any loan obligations.
  • Graduation Reward - Some lenders offer a principle balance reduction upon graduation. This is usually about 1 or 2 percent of your outstanding principle amount.
  • On-Time Payment Reward - Borrowers that make a certain number of on-time payments may be eligible for an interest rate reduction.

For a list of alternative lenders who offer these incentives, visit our Student Loan Lenders page.