You want to buy a computer to start your business as a freelancer and don’t have the funds to pay for it? You want to buy a new car, a house, or pay for your university education? The time has come to finance your project with a loan. Negotiating the terms of this loan is in your best interest. Credit2Go gives you its recommendations to negotiate a loan.
Negotiate a loan
First of all, to negotiate a loan properly, you need to have a good debt ratio. In addition, an amount sufficient to live on, not just survive on, is required to show in your monthly budget. Indeed, these 2 elements reassure the creditors and their wish to be repaid. Apart from this personal criteria, don’t forget to compare several offers in order to have a choice.
On the other hand, try to bring down the cost of your loan with important factors that can be part of the cost. For example, ask for a discount on the various application fees that the creditor may charge you for administering your loan.
A good debt-to-equity ratio
Your debt-to-income ratio is one of the most important points in your negotiations with lenders. This is the ratio (%) between your monthly credit payments (rent, car, credit card, household goods, etc…) and your total monthly income.
Certainly, if it is less than 33%, the lenders consider your ratio as good, because it leaves you surplus to live properly. Above 33%, it is almost sure that your creditor will not approve your application, unless you have a significantly high personal income.
For example, if your total credit payment is $1000 per month and your monthly income is $3500, then $1000 divided by $3500 = 28%. This is your debt to income ratio. It is less than 33%.
Enough “left over” to live on – having room to maneuver
Another important element to negotiate a loan with lenders is the amount of money you have available after your monthly credit payments are made. This amount varies among lenders, who decide on their own specific qualification criteria. The number of dependent children will also be considered in the analysis of your file. The more money you have left, the more likely you are to be approved when you negitate a loan.
The down payment helps you negotiate a loan
When negotiating for a large loan, such as for a car or a house, a creditor will usually ask you for a personal contribution. The larger your down payment, the better the interest rate your lender will give you. There are several ways to qualify your down payment. Use your personal savings but, if you can’t, ask a family member to lend you the money.
Compare several offers before you negotiate a loan
To properly negotiate your loan, you should consult several lenders to get the best deal for your situation. By using all offers against one another, you strengthen your position in the negotiation.
Get your application fees reduced
When you are accepted for a loan, creditors may charge you an administration fee. This fee is a percentage of the amount borrowed. They must be considered in the overall cost of your credit. Don’t hesitate to negotiate these fees to reduce costs.
However, if your lender agrees to lower their fees, make sure they keep the interest rate they originally offered. Keep in mind that the only two levers to make significant savings are the amount of the down payment and the negotiated interest rate.
That’s it! To get a quick personal loan now, click here to apply online with Credit2Go!