How to Negotiate Interest

Many banks are willing to negotiate interest rates on credit cards, mortgages, and personal loans. Working with a big bank can be intimidating, as many are inundated with customer service requests, and it can be challenging to have a conversation with someone authorized to reduce the interest rate. In general, banks are only willing to negotiate interest rates with borrowers that either have excellent credit ratings or those that are having significant problems meeting their obligations. Banks have particularly strong incentives to negotiate rates with borrowers who are about to default, as a means of salvaging the loan.

Instructions

1

Look at your account statement for the loan, credit card, or line of credit for contact information for the bank in question. Some banks send out periodic letters to borrowers in distress offering interest rate adjustments. If you have received such a communication, you can likely find special information about rate negotiating enclosed.

2

Prepare your negotiating strategy before contacting the lender. It's best to start with an interest rate lower than you expect to receive as a general negotiating strategy. Select an upper boundary that you're willing to adjust upwards if the lender shows resistance.

3

Contact the lender and request a rate reduction. If you are experiencing financial distress, be transparent about your finances. Explain how reducing the rate will assist you in being able to meet your obligations and maintain your credit rating. Alter your offer depending on his reactions. You may have to spend an extended period of time speaking with lenders. Some banks may request that you visit an office to conduct the negotiations.

4

Request a copy of your new lending agreement before finalizing a deal. Maintaining copies of the new contract is the best way to hold the lender accountable for the alteration. In some cases, the bank may request that you pay a small fee in return for the interest rate adjustment.