Those who find loan rates with a particular lender too high may think of negotiating. This is a good way to obtain a cheaper loan. The good news is that the majority of lenders are willing to reexamine their offers if applicants show that they will not be getting their business without negotiating. With mortgages, for example, all kinds of closing costs are negotiable. How to negotiate loan rates? Here are the top five ways to do this.
First, you have to do some shopping around so that you are clear what you will be negotiating for. You cannot get lenders beat or even match the best deal if you have no idea what the best deal really is. To this purpose, make a couple of in-person visits and phone calls to check loan rates: http://www.canadabanks.net/
Second, think of whether you have a negotiating leverage. For example, if the lender thinks of you as a client who will bring future business, you may want to try for a harder bargain. If you already are a client of the bank of your choice, they will try hard to make you think they have the best deals in town. When asking for low rates, make sure you tell them how much money you have with them on deposit, mentioning what a loyal customer you are. Don’t be timid when doing this. Of course, you are in a better position to negotiate a low interest loan if your income is high and have a very good to excellent credit. This shows the lender that you are a low risk borrower who will pay the money back. So, if you are low risk, let them know you are aware of this and that you expect low interest rates.
Third, you should be specific. Mention competitors and their rates to make sure they know you get the picture. This way, your lender will try harder.
Forth, it is very important to be persistent when trying to get lower loan rates. If you ask them just one time, it is likely that they will not pay serious attention to your demands. However, if you ask the same question repeatedly, acting as if low rates are a done deal, you are in a much better position to negotiate. In case the lender is not willing to negotiate, do not give up on this. They want to keep you as a client, so just come back another time – and then another time – until they reconsider their offer. One thing to keep in mind is that the lender will not accept unrealistic demands. So, do not ask them for interest-free money.
Finally, you may want to negotiate on the terms as well so that you get the cheapest loan possible. For example, if the lender has attorney’s fees, let them know that you would rather not pay for their lawyer. You may even mention another lending institution that will not charge you for this service.