Can you negotiate with the banks on your rates?
Last updated on March 3rd, 2022
Yes, You Can Negotiate Rates with Your Banks and Here’s how
One of the most common reasons that people deal with banks is to take out a loan for one purpose or another. Loans are some of the most lucrative ways by which banks make money. The earnings that a bank can get from a loan comes in the form of interest from the customer that took it out. Nonetheless, loans are essential when a large purchase is about to be done.
Can you negotiate with your bank on rates? The quick answer is yes. The bank decides whether or not it charges high or low interest for the loan that you take out. One important thing to remember, however, is that the better the rate is for you, the more money they lose. When you negotiate, try to strike a balance and make it acceptable for both sides.
4 Things to Help You Negotiate Rates with your Bank
Some things can help you negotiate with your banks to lower your interest rates. These can increase the chances of having a smaller interest in the home loan or any other loan that you take out. Here are four things that may help.
-
Look around for a reasonable offer.
Not all banks have the same interest rates. When trying to find a bank, try to find one with reasonable interest rates for their customers. Even better, look for testimonials from customers.
Compare some types of loans online. Try comparing to help you decide what a reasonable rate in your area is.
-
Do not be afraid to negotiate the rates for your loan.
As we mentioned earlier, these rates are negotiable, so it’s perfectly alright to try to get a good offer for your side. Try to haggle as much as humanly possible as you can to bring the interest rate down. In addition to bringing the interest rate down, also try to see if other expenses related to the loan can be affected. Remember that aside from the interest tied to the amount you borrow, the bank will also charge fees like service expenses and more. Try to see if you can get a better offer regarding these fees.
-
Having a good bank record and proof of that record.
Naturally, showing the bank that you are capable of paying the loan can increase your chances of getting a reasonable offer. Having a good bank record and making sure that your account is always well-funded that can help show the bank that you are a good customer that deserves a better rate.
-
Be prepared before you talk to the loan officer.
Negotiating with a loan officer usually involves a customer trying to convince the LO to give a better offer. It is economics at work, and being prepared with data and evidence that you can get a better offer elsewhere can help you get that offer that you want.
Before you negotiate with your bank, make sure to do some research on the best banks. You surely don’t want to negotiate every bank, do you?
