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5 Unexpected Bills That Are Cheaper With Autopay

PeopleImages / Getty Images/iStockphoto
PeopleImages / Getty Images/iStockphoto

Autopay is a great financial innovation that can help people stay out of financial trouble. With a few simple keystrokes, you can authorize payments to various people or institutions on or before their due dates. This eliminates the chance that you might miss a payment, resulting in penalties, fees or even a derogatory mark on your credit report.

Read More: Never Put These 11 Bills On Autopay
Find Out: What To Do If You Owe Back Taxes to the IRS

But there’s another advantage to auto-paying bills that some might overlook. If you sign up with autopay with certain creditors or vendors, you may actually score a discount on the amount you owe. If that sounds like a deal you don’t want to pass by, check out these unexpected bills that are cheaper with autopay.

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Mobile Phone Bills

The largest wireless companies offer varying discounts on your bill if you set up autopay. In some cases, you might have to jump through a few hoops or read the fine print to qualify, so be aware of what you’re getting into before you count on the discount.

According to reporting from the Wall Street Journal, AT&T offers customers a $10 discount if they set up autopay with a debit or bank card — or a $5 discount if you pay with a credit card. T-Mobile and Verizon offer a $5 autopay discount if using bank or debit cards, but no discount for payment via a credit card.

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Insurance

According to AutoInsurance.org, most insurance companies will offer you a 5% to 10% discount if you set up autopay.

The Allstate Easy Pay Plan, for example, offers discounts of up to 5% with autopay, depending on the type of policy you own. Nationwide offers variable discounts that average 3% off your bill for using autopay. Other insurance companies, like Liberty Mutual, American Family Insurance and Progressive offer non-specified discounts that will vary based on your policy.

Personal Loans

According to AmOne, many lenders will offer you a rate discount of about 0.25% if you set up autopay for your account. While that might not seem like much, it can actually translate to real money. On a five-year, $10,000 loan, a rate change from 11.25% to 11.00%, for example, would save you $74.93 in interest.

That’s a not-insignificant amount for simply setting your account to autopay, which you should probably do anyway so as to avoid missing any payments.

Auto Loans

Creditors extending auto loans also frequently offer 0.25% discounts for using autopay. Some lenders, such as Lightstream, are even more generous, offering rate reductions of up to 0.50%. On a $30,000 auto loan over 60 months, a 0.50% rate reduction could result in interest savings of over $400. You’ll also avoid any late fees.

Student Loans

Most federal and private student lenders offer a 0.25% discount on loan interest rates if you use autopay.

Discover Student Loans, for example, is one of the many lenders that offers a 0.25% rate discount for autopay accounts. If you had $50,000 in student loans that you were paying over 10 years at a rate of 5.25%, for example, you’d end up paying about $14,375 in total interest. With a 0.25% rate discount, however, you’d only end up paying about $13,639. That’s a savings of over $1,000 over the course of your loan just for using autopay.

Other Ways To Get Discounts

Autopay is a great way to knock 0.25% or more off the interest rates you pay on various types of loans, from auto loans and student loans to personal loans. It can also net you a few dollars off your monthly bills for wireless service and/or insurance. But there are other ways that you can save money on some of your bills that take about the same amount of effort as setting up autopay.

For example, if you agree to paperless statements, rather than getting your bills in the mail, you may save a few dollars on various bills. Bank of America is one of the most well-known banks that charges $5 per issued paper statement.

If you’re buying insurance, one way to get a discount is to bundle more than one policy with a single carrier. For example, rather than having an auto policy with one company and a home insurance policy with another, bundling them together at a single company like Nationwide could save you 20% or more.

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This article originally appeared on GOBankingRates.com: 5 Unexpected Bills That Are Cheaper With Autopay

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