Nothing is set in stone and even those offers you see on a bank’s website or brochure can be changed. Lender agencies offer loans and credit cards depending on your financial situation, your needs, your wants and how you negotiate for them. Many banks in Canada have discretionary pricing, depending on a customer’s age, loyalty, income, market concentration and financial situation. This means you don’t have to go by the book when you are sitting with a lender agency. With a bit of negotiation, you can get a loan which is beneficial to you.
Negotiation with a lender agency is nothing like bargaining in a stall or even a sponsorship deal you managed to get.
It is important that before you start talking to your lending agency, you know what you want from them. Go through the website and brochure of various lending agencies. Browse through their various lending deals. This way you can familiarize yourself with the market around you and their offers.
You should not have unreasonable expectations from a lender agency, that would just cause your negotiation to fall through. Say if your debt servicing ratio is high do not expect them to give you an loan or rate as what they give to your friend. At the same time, have slightly flexible expectations because you can’t expect lender agencies to give what you want. Go into that meeting what an attitude “How can this be done”.
Working on the Negotiation
You cannot walk into the office of a lender agency and lay out your demands. Negotiation is a give and take from both sides. Even the best negotiated deals are filled with compromises from both sides. To negotiate well, you have to understand the other side. They also have a certain limit where they will lean sideways for you. Through safe negotiations, test the waters and find out how much they are going to lean for you. Sometimes people working in the Banks are employees so they might not care whether you get the loan or not. So you have to really test.
Don’t forget that they want something from you too, so listen to their arguments. This is where knowledge of the other offers in the market comes in handy. You can compare their deal with others and push them to present a better deal.
Your Position of Strength
When you are negotiating with a lender , it is best to negotiate from a position of strength. The best position of strength to be in is of a proven responsible borrower. Lenders love responsible borrowers. A responsible borrower is one who makes the payments on time, is financially healthy and has a stable job and a good credit report and score. A responsible borrower shows that you’re not a liability when it comes to borrowing funds. If you can get your recent credit report, income statements and assets information to the meeting, that would help a lot. This helps in getting an understanding from the lender’s representative as to what he thinks from his experience.
If you qualify as responsible borrower, you need to base your arguments from being a customer of less liability with a good credit score.
What can You Negotiate on?
Interest rates and lending fees are the two best points you can negotiate on. Depending on your negotiating position, you’ll find lending agencies can be flexible. Don’t forget to get banking perks thrown in.When I opened an bank account, as I did not want to bank where I have my credit cards and Line of credits, I got an 6 months moratorium on Bank fees. So just ask.
As mentioned before, negotiating is a give and take, so expect it to take time. Don’t expect it to get done in a single meeting. Be patient and walk off from the negotiating table feeling satisfied. Be sure that you allow them to pull your credit report only after you are satisfied that the opposite person knows something about approval system. Go to an different lender, if it does not work here. I have raised $150,000 in unsecured debt by just negotiating.