Do any banks offer a discount on their interest rate for consumer loans (auto, unsecrured, ect..) if customers enroll in automatic payment? If so how do you structure the note, does it reflect the discounted rate or the original offered rate and then you just discount the rate if they enroll. Also what if the customer cancels automatic payment after the loan is in repayment do you adjust their rate accordingly?

We always put what the rate would be without the auto deduct on the note. Then we have a seperate form/disclosure that list what the rate will be (.25) discount as long as the bank pulls the payment from a checking or savings account. If the customer should close the account where the payment is coming from we already have the correct rate on the note and send them a payment book with the new adjusted rate.

We put the discounted rate in the promissory note. If the customer discontinues the auto payment, we do not adjust the rate. It just makes the whole mess too labor intensive and time-consuming. Customers that take advantage of the discounted rate typically do not discontinue the auto payment....probably think that their rate might go up....though there is absolutely no verbiage in the promissory note which would allow such an action on our part. We treat employee loans the same way. If an employee quits or is fired, he/she gets to keep the discounted rate. We don't think this is a huge monetary loss for the bank. Sometimes, offering the discounted rate for auto payment serves to draw the customer in to close the deal...a loan and a checking account.

We also put the discounted rate in the promissory note.