If 51% of people are banking online, then applying for a personal loan online makes sense, doesn’t it? Getting online loans with bad credit isn’t a problem. You can get them faster and easier than using the traditional loan process.
The real problem is the steep interest rate you might pay. Online loans provide an easy way to apply for and get a loan when you need it. But, it’s time to learn how to negotiate a better deal.
Online Loans: Negotiating the Best Interest Rate
Here are some of the best ways to get that low-interest rate you want!
Know Your Credit Score and History
Go into the process armed with information. Pull your credit and get familiar with your score and any problems that might be in your credit history. Dispute credit report discrepancies before you apply for a loan.
Here’s a guideline on interest rates you could expect based on your credit score.
- Excellent Credit – 5% to 10%
- Good Credit – 12% to 15%
- Fair Credit – 17% to 22%
- Poor Credit – 28% to 32%
Notice the range is pretty broad in each category. This means there is room for negotiation. Even a 1% difference saves you money over the length of the loan!
Compare Your Options
One of the easiest ways to get a better rate is to compare several online loans before choosing one. Each lender will offer something different, so choose well.
Here are some things to compare between lenders.
- Length of Loan
- Interest Rate
- No Prepayment Penalties
- Loan Amount Offered
- Monthly Payment
Choose the loan that offers what you need but gives you the best interest rate, too. If you’re not happy with the interest rate, give them a call and talk about it!
State Your Case
Stand up for your credit history! Have a history of on-time payments? What about loans you’ve paid off in the past?
Use your credit history to state your case. You can send an email with details about your history and why you are a reliable borrower.
Use bullet points to make claims about your positive borrowing history. Make sure you use details from your credit report as evidence. Try to start a discussion with the representative.
When all else fails, call them. Speak to a representative about why you deserve a lower interest rate.
Whether you decide to email or call, you’ll need talking points. Make yourself a list of your good credit history and job history points beforehand.
Here are some things that will help make your case.
- On time payments on accounts
- Paid off loans in past
- Low balances on credit cards
- Number of old accounts in good standing
- Length of time at your job
- Expected job promotion or bonuses
Give the lender more positive information to consider. It doesn’t hurt to ask!
Now that you’re armed with ways to negotiate your interest rate, it’s time to apply! Online loans are a great way to get the personal loan you need. Don’t let a poor interest rate keep you from it.
Looking for more information about personal loans? Check out our learning center!