How does an autopay discount work on a personal loan?

Typical autopay discounts by lender: LightStream - 0.50% discount for AutoPay (the largest standard discount in the market). SoFi - 0.25% discount. Marcus by Goldman Sachs - 0.25% discount. Discover Personal Loans - no autopay discount (rate is the same either way). Upgrade - 0.50% discount. LendingClub - 0.25% discount. Avant - no formal autopay discount.

How the discount is applied: The lender shows you two rates on your offer - the standard rate and the autopay rate. The autopay rate is the lower one, and it is conditional on maintaining enrolled autopay for the life of the loan. You must set up autopay from a valid bank account before the loan is funded (some lenders require it to be active at signing; others allow enrollment at any time and apply the discount prospectively).

What happens if you turn off autopay: The lender adds back the discount to your rate. On a $20,000 loan at 0.25% discount, deactivating autopay raises your rate by 0.25% and increases monthly payment slightly. Most lenders notify you of the rate change when autopay is cancelled.

Additional benefits of autopay beyond the discount: (1) No missed payment risk - payments process automatically on the due date. (2) Some lenders offer a 10-15 day advance notice before each payment, so you can ensure funds are available. (3) Autopay payments are typically processed as ACH debits, which clear quickly and ensure timely posting.

Pro tip: The autopay discount is already baked into the advertised APR range on most lender websites. Check the fine print - '7.99%-23.99% APR' may include a 0.25% autopay discount. The rate without autopay would be 8.24%-24.24%. Factor this in when comparing lenders that do and do not offer the discount.