Are you sick of paying high interest rates on every loan you get? Well, who isn’t? Interest rates exist because that is how lenders gain profit from lending people money. There’s practically no loan that doesn’t have an interest rate.
While this may be the case, there are several things that you can do to reduce the high-interest rates you keep on getting when you’re applying for loans. Don’t worry, they’re very simple tips you can use to save yourself some money. Here are some of them.
Negotiate for It
It may sound impossible, but in some cases, you can negotiate for a lower interest rate. However, there are some things you need to have to be on the negotiating table. For example, you need to have a good credit score and stand with the lender from which you’re taking out a loan. Also, research is crucial.
You might want to know if the lender offers the same loan with a lower interest rate to other people before you negotiate. You could also see if you can convert your account into another type for you to be able to have a lower interest rate. Although, you might need to meet some requirements to do that.
Improve Your Credit Score
Before you can ask for a lower interest rate from your lender’s offers, improve your credit score first. This is the best way to get a lower interest rate offer on your next loan. Your credit score is a factor that your lender uses to determine how creditworthy you are.
Your creditworthiness is the main factor for your interest rates, which means that the more creditworthy you are, the lower your interest rate will be, and vice versa. Not to mention that if you have a good credit score, there are a lot more loans that you can apply today with CreditNinja.com.
If you’re still considering getting a loan and have a lot of time, you might want to work on improving your credit score instead. Thankfully, there are many ways you can do this. For example, the most significant thing you can do is to pay off your monthly bills on time. Your payment history makes up about 35% of your credit score, so keeping at it should be in your best interest.
Collect Competing Offers
You’re halfway through the battle if your lender is willing to negotiate for a lower interest rate. The next half is to convince your lender to give you that lower interest rate. Prepare yourself because it’s a war out there, and you don’t want to go into war without ammunition. And this time, the ammunition you should use is competing for offers.
If you’ve had preapproved offers or deals beforehand, you can use these to see if your lender would budge. A lender doesn’t want to let go of a client, especially a competitor. So if they are presented with competing offers, they will try and beat that offer to gain your business. If they come up with an offer, check if you have any offers from other competitors that can beat theirs and present it to the lender.
Don’t Settle
The lender might initially deny your request for a lower interest rate, but most of the time, they do this to see if you give up. Giving up means that you’re not all that serious about getting a lower interest rate, and they will continue charging you the current interest rate. That said, don’t lose hope when they deny your first request.
Come up with a counterplan or ask for another round of negotiation. If you feel like you’re not getting anywhere with your plea, you can try for another time, preferably when you have a better financial situation or an improved credit score.
Apply for a Debt Consolidation Loan
If you’re unsuccessful in your request for a lower interest rate, the next best thing you can do is get a debt consolidation loan. It’s like a balance transfer for credit cards that lets you put all your remaining balance into another card with a lower interest rate.
But in this one, you can practically put most of your loan repayments into a new card with a significantly lesser interest rate. Not only will you be more efficient with repaying your loan because of the lower interest rate, it’s also easier to manage all of your accounts since now you’re only managing one.
Final Words
We’re all tired of paying high-interest loans. Instead of our money going for the principal amount, we have to deal with interest rates. So if you’re looking to have a lower interest rate the next time you get a loan, then you might want to learn all the tips we gave you above.
