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Are you wondering if it’s possible to get a loan and negotiate on its interest? The answer is yes. But whether your request will be approved or not depends on the lender. Nonetheless, it won't hurt to ask and know the answer.
Eligible Borrowers Have More Negotiating Power
If you have an excellent credit remark, high income, and minimal debt, you are considered as a qualified borrower. Because you’ve met the basic criteria set by the lender, it will be easier for you to negotiate the interest rate given by the bank, loan provider, or credit union.
Eligibility speaking, you fell within the ideal range, therefore giving you the ability to negotiate with almost everything during the loan process.
However, if you have bad credit, lower income, and a high debt-to-income ratio, the lender may not give you the chance to negotiate on the loan.
Other Factors That Affect Your Negotiation
Go To The Right Banks And Lenders
Before getting a loan, be sure to research banks and lenders first. Make sure to find financial establishments who are more than willing to help you, not waste your time. This may mean visiting them personally, talking to one of their representatives, or reading reviews.
When finding the right lender, you want to know as much information as you can before talking about your financing options.
Your Negotiation Skills
Before negotiating on the loan, be sure to come prepared. Know the basic terminology if possible so you’ll appear like you know what you’re talking about. Otherwise, the lender might not take you seriously.
Working on your negotiation skills may also increase the respect and confidence that the lender is giving you. Since you can confidently talk about the terms offered to you by banks and other lenders, your loan provider might try to match these terms rather than sell you their terms.
Interest Free Loan
When it comes to financial instruments that are offered in the lending market these days, interest-free loans are perhaps the most attractive. Everybody wants to take out loan minus the interest charges, after all. However, the big question really is if these loans truly are free of interest.
Lenders are in the market, offering their services to the public, because of how they make a profit out of letting people borrow their money. They charge borrowing charges all the time, which is why when they offer an interest-free loan, you are right in believing that this is really not exactly interest-free.
At present, there are two types of loans that are considered interest-free. There are the personal loans that are interest-free until you make the final repayment. There are also personal loans that are interest-free only for a certain period, after which the interest charges will then start to kick in.
Whilst totally interest-free loans are quite appealing, one needs to be aware that in place of the interest charges, borrowers are often subjected to Merchant Fees or Services Charges, similar to what credit card companies charge their customers. This can be a percentage of the total loan balance or it could be a fixed figure. Whilst this means that there are no loan interests, the fees involved might make the loan payment even more expensive than traditional loans.
This is where you are not charged any interest for a 12-month period. Once that period expires, interest charges kick off, which are generally high. Lenders offering this banks on you not paying the loan off before the interest-free period expires in order for them to make a profit out of the borrowing. However, you can use this to your favour if you will see to it that the loan is paid in full before the interest-free period is over. Otherwise, once the interest rates kick in, expect that you are going to be faced with a very hefty loan payment.
Tips to Get Rid of Insterest Loans Faster
Having debts to pay certainly is not a good feeling. It could be a hindrance when you want to obtain financial freedom already. If you’re looking to pay your current loan in a much faster way, here are 3 ways you can do so.
When you decide to pay your loan bi-weekly, what happens is you pay half of your loan payment every 2 weeks instead of every month. In essence, what this does is that it helps shave off your total months. However, this remains to be something that you have to discuss with your lender as some charge a penalty when you make payments earlier.
Round Off Your Monthly Payments.
This is one of the strategy that I highly suggest. When you round off your monthly payment, you pay extra fee every month and you almost don’t even notice it. After 12 months, the total accumulated amount of all the extra payments adds up to a large amount of money already. For example, if your total payment a month is 370.00 and you round it up to 400. After 12 months, you already have an additional 360 that you have paid. With that, you were already able to shave off a month.
Make Extra Payments
This tip is sort of similar to the former. I also highly suggest this one if you are unable to commit to the bi-weekly payments scheme. You can either do one single extra payment at the end of a year or you can commit to pay an extra amount of money per month. Like the previous tip, once the extra payments have been accumulated at the end of the year, it’s going to add up to a large sum of money. So, let’s say you commit to paying an extra 30 every month; by the end of the year, you already have another 360.