How to Talk to Your Creditor to Get Them to Turn Your Balance Into a Low Interest Loan

There are usually four reasons why you might have a high interest rate with loans. First, you may have taken out the loan when interest rates are higher than they are presently. Second, you may be paying a penalty interest rate due to your payment or credit history. Third, you might have borrowed from a high-risk, high-interest lender, such as a payroll advance lender. Last, you may have taken out an adjustable-rate loan and your interest rate may have adjusted higher. Depending on the situation you are in, you may have to try different negotiation strategies.

Instructions

1

Check your credit score. If you have been a long-term customer with a good payment history, you will be dealing from a position of strength and may have more success lowering your rate with a direct approach, no matter what the cause.

2

Ask your creditor to lower your rate. If you have been a good customer for the creditor, simply asking to turn your balance into a low-rate loan may be effective. Make a low offer and see if your creditor accepts it or makes a counteroffer. In either case, you can often end up with a lower rate.

3

Refinance with the lender. Ask your creditor if you can refinance your current loan with another product that carries a lower interest rate. If none are available, shop around and see what interest rate you can get from another creditor for the same balance. Return to your original creditor and ask if they can lower your rate to the one you found from their competitor.

4

Talk to your creditor about improving your payment history. If your interest rate is high due to late payments, ask if your creditor will lower your rate if you make a certain number of payments on time. Credit card issuers are now required to lower a penalty interest rate if you make six subsequent payments on time, according to CreditCards.com.

5

Suggest a multiple loan discount. If you have other outstanding loans, such as a car loan, mortgage or credit card debt, tell your creditor you will consolidate these other loans with them in exchange for a lowering of the interest rate on your outstanding loan.