Did you know that you can often negotiate with your creditors and lenders to lower your interest rates and monthly payments? While it may seem like interest rates are fixed, there is frequently room for negotiation, especially if you are an established customer with a solid payment history. You just need to know the right tactics and script to succeed at interest rate negotiation. Cambio has helped thousands improve their credit score. Lower interest rates is one way to make your score work for you instead of against you. By following these steps, you can save thousands each year in lower interest charges and payments. Here is how our script to negotiate interest rates works:
Do Your Research Before Negotiating
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The more data and evidence you have to support your request for a lower interest rate, the better. Check the current interest rates for your type of loan or credit card by searching public data and industry reports. Compare the rates you find to your current rate to see if you have room to negotiate. Also check competitors’ interest rates and the prevailing federal interest rate (so-called “prime rate“) which your rate may be based on. The more rates have dropped since you got your loan or card, the stronger your case will be.
Prepare The Arguments In Your Script
Based on your research, prepare the key arguments you will make to the lender around why you deserve a lower interest rate. This could include your strong payment history, the decline in the overall interest rate environment, lower rates being offered to new applicants, and rates offered by other lenders and competitive cards or loans. If possible, take actions to strengthen your position before negotiating like increasing your down payment amount or improving your credit score. The more compelling arguments and evidence you have, the more likely the lender will be open to negotiating a lower rate for you.
Practice The Negotiation
Communication is key to succeeding with an interest rate negotiation. Practice confidently and professionally explaining your request and supporting arguments. Prepare some lines in advance that summarize your key points around your research findings, payment history, and fairness in receiving a lower competitive rate. If negotiating over the phone, role play the conversation ahead of time so you feel at ease with the interaction. With practice, you will sound polished and persuasive, increasing your chances of a successful negotiation.
Prepared? Time To Negotiate Your Interest Rates!
With your research and arguments prepared, it is time to execute the negotiation At this point, you should have a good idea of what your script to negotiate your interest rate will look like. If negotiating over the phone, call your lender’s customer service line and ask to speak to someone who can review your interest rate. If sending a written request, send a formal letter to your lender’s interest rate negotiation or customer retention department.
Here is a sample script to negotiate interest rates that you can use to guide your own. Keep in mind, yours might look different based on your preparation:
“Hello, my name is _______. And I’d like to speak with someone to talk about why my interest rate is so high.
(Continue once you’re connected with someone who can make a decision on your interest rate, typically a “credit account specialist”)
“I’ve used my (credit card company) card for several years now and always make my payments on time. So I’m not sure why my APR is as high as it is. I’ve called (competitor credit card company A) and they’ve offered me a card with an interest rate as low as (x). I’ve enjoyed the customer service with your company but it’s not enough to make up for how high this interest rate is. I’m seriously considering switching to (competitor credit card company A). Can you help me lower my APR?
(If they offer you a slightly lower rate but it fails to reach your target rate, you can say something like: “Is that really the lowest you it can go? If so, I’ll be switching to a new credit card company immediately “)
In your communication, first thank them for their partnership and acknowledge your payment history. Then, state you would like your interest rate to be reviewed and lowered to the current market rate in order to continue your relationship. Proceed to outline your research findings and arguments for why a lower rate is merited and fair. Provide specific rates you have found as reasonable benchmarks. Be polite but firm, and stay confident in your position.
This One Conversation Could Save You Hundreds
Using this script to negotiate interest rates can save you a LOT of money down the road. For example, a 2% lower rate could save $100 per month or $1,200 per year on a $10,000 loan balance. Calculate your own savings by estimating the monthly interest charges at the lower rate and compare them to your current charges. Displaying the actual potential savings can be an eye-opening motivator for you to tackle the negotiation process.