Using Automatic Loan Payment Programs

Automatic loan payment services offered by your lender or bank help you organize your bills each month. Instead of being responsible for writing a check to the lender, your monthly payment will be automatically deducted from a credit card or bank account you place on file. There are many benefits to this option and very few downsides.

Benefits of Automatic Loan Payment

The main benefit of setting up this service is never missing a payment, regardless of your personal situation of the time it comes due. If you are vacationing, ill or otherwise predisposed at the time a bill is due, the system will make sure you do not miss the payment. Because of this, you can avoid late fees on any missed payments. You will also avoid dips in credit that come with missing even one pay cycle.

Downside of Automatic Loan Payment

The only significant risk of electing to use this feature is overdrawing or overcharging your account. If you do not have sufficient funds when the bill is due, you will be charged for the overdrawn amount and for going over your credit limit. Responsible borrowers will know to keep a minimum sum available for the payment. You will also likely receive email or mail reminders so you can make sure to have the funds available.

 


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