Is Interest Negotiable?
Interest is the additional money you pay for borrowing a particular amount. It is discussed before the loan is disbursed and agreed upon during the loan contract. However, most people wonder whether interest is negotiable or not? There are many circumstances where a person can negotiate interest and save hundreds, even thousands of dollars over the long run. But everything depends on how good you are at convincing people- especially bankers. Here are a few terms you can negotiate in your interest and decrease your repayment amount.
Know What Is Negotiable In Your Loan
One of the most negotiable interests is auto insurance. You can reduce the terms of your auto insurance if you have a good credit score. Otherwise, your terms will be pre-determined, and your words won’t hold much value. In addition to the price of the vehicle, you can even negotiate the overall cost of your auto loan.
Negotiable Loan Terms
Annual Percentage Rate (APR) and interest rate
Length of loan
Whether or not there will be a prepayment penalty
Any additional fees associated with the loan
3 Tips to Negotiating Loans
Now that you know you can negotiate loans, it’s time to learn how exactly you can do that. Negotiation is a rare skill that’s hard to master. It requires willpower, knowledge, and good communication. Here are 3easy ways to negotiate your loan.
1. Do Your Research
You cannot negotiate anything unless you have sufficient knowledge. When you are going in for auto insurance or a home loan, always visit more than one place. Try to get different rates and compare them, so you know how things work. The best way to acquire maximum knowledge about a loan is by going to the most expensive loan provider and collecting all the information.
2. Have a Good Credit Score
You won’t be in a bargaining position unless you have a good credit score. Therefore you must make sure your credit score is always above the required number. This way, every other bank will be open to accepting your loan, and you can take advantage of this.
3. Get Inside Their Head
Whether negotiating with the insurance company or the bank, you need to get inside your prospect’s head. Look into their eyes when you are talking and always politely counter their points when you get the chance. Don’t make it seem like you don’t have enough money for the loan you are borrowing. Simply put industry rates and ask them how they can match up.
One of the most important factors for negotiation is confidence. Unless you come off strong, well-informed, and confident, insurance officers or bankers would not break their stance. So you need to get inside their head and share the knowledge you have gained by visiting different loan providers.