Did you know that there are things you can do to make your financial life easier, for example, negotiating for a lower interest rate?
Some people nowadays are afraid of trying to negotiate with lenders about their interest rates, but they are missing out on all of the benefits of negotiating with your lenders about your loans. Although you can’t be successful all the time, the experience you get from doing so will further help you in the future.
If you want to try negotiating and want to be successful in doing so, here are some tips to help you when you’re negotiating for a lower interest rate.
Ask for the Rate That New Customers Get
Don’t be afraid to call your lender and ask for the same rate that new customers get. Lenders will do everything they can to retain a good client, and giving them the same rate that new customers get is one of them. However, this is only given if you have a good standing and have been a good client to them for a long time.
If you have a good credit history with no missed repayments and have been with them for a few years now, you might have a good chance to convince them to give you what you want.
If you are a first-time borrower, then all the more reason to ask for that specific rate. Remember that first-time borrowers don’t usually show all of their cards. You have to convince them that you are a good risk. When you think that you are about to convince them, ask them for promotions that they run for new customers.
Call Their Bluff
If your lender has refused to lower your interest rate or they gave you a too small reduction, maybe it’s time for you to find another lender. Everyone knows that staying where you are with your current lender is much less of a hassle than refinancing, but we assure you that you should refinance if you think that you’re not getting the best deals. Also, the sooner you refinance, the more you will save in the long run, given that your next lender is a better one.
Also, when refinancing, it’s a good idea to ask the help of a broker. They will make the refinancing process much simpler and faster for you, not to mention that they will find a lender that is the most suitable for your financial status and needs.
Shop Around
However, if you want to shop around yourself, you can do so if you are specific with what kind of repayment terms and interest rates you want to have. Also, you’ll gain much more knowledge about other deals from other lenders that you can use as leverage for negotiations. Regarding the information, you can compare the interest rates, repayment terms, borrowing limits, etc., and find the most competitive loan product. Make sure you understand how to play your cards right.
Lenders do have some much-needed flexibility when it comes to their rates, but they don’t use their discretion for no reason. You can compare their loan products to a competitor and see if they budge. In most cases, the lender either can’t compete with the other loan products or isn’t willing to lower it at all.
Use the Loyalty Card
If you want more leverage for negotiation, you can play the loyalty card in the negotiations. Obviously, this is only applicable if you have been a good client to them for a long time. This is even more effective if you had a good run with them over the years. During the negotiation, before you ask for a lower interest rate, make a mention of how long you are with the company and how good of a client you have been to them.
Also, if your loan to value ratio is gradually getting small, make a mention about it too. With this, you will be presenting your current timeline and standing with the lender. If that is satisfactory, you’ll have a good chance of getting approved for a lower interest rate.
Give a Strong Application
Going all out in your application for a lower interest rate is a good way of saying to your lender that you are serious about the whole process. Basically, you need to show your lender that you are still a good client by having a good and improving credit score, making a bigger down payment, and paying off some of your debts. Of course, these things take a lot of time, so make sure you have done them beforehand.
Final Thoughts
Although negotiating for a lower interest rate will not always yield a success, it doesn’t mean that you don’t have to try negotiating or go into the negotiating table half-baked. You have to be serious about it so lenders like Creditninja.com will take you seriously. Think of it as trying to sell yourself. The more you make yourself appealing, the higher chances you will get in getting approved for a lower interest rate.
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