Even if you have a good credit score and are getting the best deals on your loans, that doesn’t mean you can’t negotiate for an even better loan. Remember, there’s always room for negotiation, especially for people who have excellent credit scores. Banks price their loans based on this fact, which is why they are willing to negotiate for a deal with their clients more often than not.
Unfortunately, most people, once they are shown a “good” loan at face value, they tend to accept right away. Those who negotiate for a better loan have little knowledge of how to negotiate correctly with the lender. Instead of having your bank decide everything for you, why not try to arrange for an even better deal for you? When negotiating, you should always remember that banks and lenders offer loan products for profit.
You can use this information as a kind of leverage to have better repayment terms. This is even a more powerful tool, especially when it’s your first time taking out a loan from that specific bank or lender. Financial institutions would do their best to retain a new customer, so they are willing to stretch the borrower’s options.
Here are some tips you have to learn to get better repayment terms.
Work on Your Relationship with Your Lender
A good relationship with your lender goes a long way. Lenders tend to do favors for trusted clients and thus offer their best deals to make them stay longer. To do this, you have to cultivate a relationship early on, as early as your first time inquiring about their loan products. While your first interaction with the bank might lead you to tellers and bank managers, the person you should be looking for is the loan officer.
Loan officers will inquire about your financial status and tailor a loan specifically to you if you have a good relationship with them. In short, loan officers know the best deals and can even tailor loans to your needs since they are more familiar with your financial situation. Building a rapport and trust with lenders before asking for a loan is the right decision on your part.
Position Yourself as the Ideal Borrower
While having a good and trusting relationship with your lender is a good move, you can’t do it if you’re not an ideal borrower for their loan products. You’ll have to prove to them that you are a trustworthy borrower so that they are more willing to negotiate with you. But how would you do that? One thing you can do is to show them that you have a significant amount of savings and clean credit history.
We all know too well that not everyone has savings. That is understandable, but you need to have a clean credit history to show them that you will pay them back accordingly. You also need to have a good credit score. You are going to need to back this up with some documents, so be prepared.
Do Your Research
Before you go to your lender to negotiate, you need to come prepared, not only with documents but also with knowledge. Without this, you’re going to look like you didn’t come prepared, and your lender might take advantage of this. Also, having the right information and knowledge will make you less likely to hesitate during the negotiation. Thus, articles from CreditNinja could help you answer the FAQs you may have encountered in your research.
That said, the first thing you need to research is the market. Shop for the loan products available to you and see if you can compare their interest rates and terms. This information can be a huge factor in the negotiation as you can leverage it to get a better deal from your lender.
Bring Up Their Competitors
If your prospective lender isn’t budging in the negotiation, you will have to bring out their competitors. Compare their terms and rate with another lender and see if they budge. If they show signs of budging, you can go in for the kill and tell them your ideal loan. This is even a more powerful move, especially when you’re a new client.
Remember that with a new client comes a new cash flow, and lenders will do anything to retain a new client. With that in mind, you can take advantage of this to negotiate the absolute best terms. Remember that you will have ammo- enough knowledge about their competitors to compare loan terms, fees, and interest.
This will give you more room for negotiation. Not only that, but you can also angle your attack with their first-time customer interest rates. Most lenders have this but will not outright offer it to new clients unless they ask.
Don’t Be Afraid To Ask For More
Even if you are continually getting better repayments and low-interest rates, you still can negotiate for something better. With the right information and fair use of negotiating skills, you’ll make your financial life much more comfortable. Don’t be afraid of asking for more.