How can you negotiate lower interest rates with a good credit score?

livemint.com:

credit score have a strategic advantage. This is because they can negotiate a better deal in terms of lower interest rates with a lender. Let us suppose that 32-year-old finance professional Ajay Sharma has a high credit score of 750.

Without a doubt, he can use his score to negotiate for lower interest rate with his bank. Conversely, if his credit score were in the range of 500-600, his bargaining power to negotiate would fall drastically. These are some of the steps which Ajay can take to snatch a tempting deal with a lender at the time of seeking a loan.

Know your credit score: Prior to negotiating, it is vital to know your credit score. With a good credit score, you have leverage to bargain for a better deal. Find out the current rates: It is vital to understand the current interest rates offered by various lenders for similar financial products.

This will give him a fair idea for negotiation. Highlight your creditworthiness: Emphasise your good credit history and score during negotiations. Lenders are more likely to offer favourable terms to borrowers with low credit risk.

Consider different lenders: Do not settle for the first offer you receive. Shop around and compare rates from different lenders. Use online comparison tools or consult with multiple financial institutions.

ALSO READ: How to ensure a good interest rate on your personal loan? Here are 3 primary ways Discuss the rival offers: If you have received better offers from other lenders, you should let your current lender know. They may, afterwards, be willing to match or beat the competing offers to retain your business. Be prepared to walk away: There could be a situation wherein regardless of best efforts, a lender may not change stance on interest rates.