Quicken Loan, one of the nation’s largest auto lenders, is offering students who make less than $65,000 more than before a one-time payment of nearly $600.
But the change in terms will not apply to those making less than that amount.
That change will apply to borrowers with loans in the $100,000 to $125,000 range, Quicken said.
The payment was announced Monday in an email to students, which was first reported by CNNMoney.
Students will be able to receive up to a $300 monthly payment if they make less that $65 per month.
The change will affect Quicken loans for borrowers with the following credit cards: Chase, Capital One, Bank of America, Wells Fargo, American Express, Discover, Bankrate, Capitalone and SunTrust.
The move was made to make the monthly payment easier to understand for borrowers who don’t have a credit history.
The new amount is not necessarily better, Quicker Loans said.
“We know that students who borrow from Quicken and earn less than the typical student borrower will find the monthly fee more than reasonable,” the company said in a statement.
But it noted that “some students will be better off by paying a lower amount of the monthly monthly payment.
For those students, the new monthly payment will provide them with a greater financial security in the event of their borrower’s default.”
Students will still be able pay back the loan on their own terms.
“For those students who have not defaulted on their loans, we encourage them to consider enrolling in Quicken Student Loans,” Quicken wrote.
The monthly payment is the same for borrowers in all credit categories.
For example, borrowers who make under $60,000 will receive the same amount.
But students who are making $65 to $70,000 or more will be paid a slightly different amount.
The Quicken company said the change is to make students feel good about paying back their loans.
“The new payment is intended to make them feel good that Quicken is providing a financial security and to provide students with more options for repayment,” Quicker wrote.
“Quicken is also working on a new way to give students a chance to earn interest on their loan balances.”
The company said students who take advantage of the new payment can earn as much as 20% on their next payments.
It said the new payments are the result of a survey it conducted with more than 1,000 students last year.
Quicken’s new policy will go into effect Jan. 1, 2019.
The company, which has more than 6,600 lenders on its network, said in its statement that students will receive a one time payment of $600 if they have not made any payments since Jan. 29, 2019 and will receive another payment if their loans are outstanding.
Students who have been in default for more than a year will be subject to a payment of up to $3,200 per month until they pay back their remaining balance.
That payment will be reduced for the first 30 days after their delinquency is resolved, Quicks stated.
The policy applies to Quicken, which offers loans in a wide variety of categories.
It offers loans for students who work, for those who earn less and for those with incomes below $75,000.
Quicker said the policy applies for all Quicken student loans and it is available to anyone.
It does not apply for loans that Quicks customers are enrolled in.
Quickers said it plans to release a new statement later Monday, but the policy announcement did not specify which statement would go out.