When you borrow money, it is important to understand the terms under which you are doing so. Most loans come with a defined repayment period, interest rate and penalties for failure to make minimum payments on time. However, it may be possible to negotiate some or all terms offered by a lender.
Get Offers from Multiple Lenders
It is easier to negotiate the terms of a loan when you know what the market will bear. If you notice that no lender is willing to offer an interest rate lower than 5 percent, it generally isn’t a good idea to ask for an interest rate of 4 percent. However, you could ask if a lender would go to 4.75 percent if you agreed to make automatic payments or made payments on time for 12 or 18 months.
Lenders such as Gladiator Lending often decide your interest rate and loan amount based on your credit score and creditworthiness. Making automatic payments or taking other steps to reduce the chance that you’ll default on a loan makes it easier to justify more favorable loan terms.
Hold Negotiations on Your Terms
If you don’t feel comfortable talking about a loan at a bank or credit union, have those talks online or over the phone. This makes it easier to back out of talks if they aren’t going in your favor. It also makes it easier to research available loan offers and other information that you can use as leverage to get a better offer.
Make an Offer to Secure the Loan
Lenders may offer unsecured loans to those who qualify. However, these loans generally come with higher interest rates, and you may not be able to get the amount of money that you need. By offering to secure the loan with collateral, it may be possible to reduce your interest rate or increase the amount of the loan.
It is important to know that failing to repay the loan on time could result in collateral being seized by a lender. Loan officers at Gladiator Lending or other lenders may be able to work with you to structure a loan in a way that meets your needs.
Do You Have a History with a Lender?
If you have a history with a lender, that could be used to your advantage when negotiating the terms of a loan. Smaller lenders may be more willing to negotiate to ensure that you keep your business with them. In the event that you don’t have a history with a lender, see if your parents have any connection to a bank or know a loan officer in town. This could be enough to help you get favorable terms the next time that you need to borrow money.
Whenever you borrow money, you want to do so in an affordable manner. This means getting the lowest possible interest rate and a loan term that is as short as possible. If a lender has fees, be sure to ask if they can be waived or reduced in the final offer.
