Despite many doubts, subprime loans are on the upswing due to economic crunch. Subprime loan usually carry high rate of interest, but there is always a scope of negotiating on loan rates. Here are some tips on how to go about it.
Subprime loans are especially beneficial for those borrowers who have a low credit score with an unclear credit history. These are usually given to those people who’ve difficulty in paying back installments on time, sometimes reflecting problems of unemployment and financial crunch due to other reasons. Subprime loan market is generally for those who can’t qualify for a first hand loan. With a bad credit history record there are chances that you’ll have to deal with the lender for negotiating on loan rates. The reason being subprime loans carry high rate of interest as they are quite different from a first-hand loan in terms and conditions.
Still, the idea of availing a subprime loan can be ideal for a buyer who doesn’t have other means for paying off the debts. The rates offered by subprime lenders are negotiable, so you need to do your best while convincing them. Here are some tips on getting the best possible deal on a subprime loan:
1. Be determined
Normally, while negotiating the most important thing is to have the right attitude. Bear in mind that you need to be determined while negotiating. The lenders don’t get convinced in one go. The chances are that they’ll not give away so easily if you try negotiating only once. If you request them continuously, or act determined or show as if you’ve another deal in your hand then they’ll start negotiating with you. Even if the lender sounds too clear on loans rates and insists that the rates can’t be negotiated, don’t give up. Try as hard as you can in cracking the deal. But remember not to make unrealistic demands. Come back again and again until they lessen the rates a little bit.
2. Research Well
While choosing a lender, make sure that you don’t end up approaching only one lender. There are several lenders out there, so it’s best to shop around and get quotes from different lenders. So when you start negotiating with a subprime loan lender, you can always give them the reasons to lower the rates. Show that you’ve sufficient insight of the financial market and some other lender is ready to offer a rate requested by you, then chances are that the lender will start negotiating. Get as many quotes as possible in order to show that you’ve done your homework and researched well. If you fail to follow this step, chances are that you won’t crack a deal with anyone.
3. Keep closing costs in mind
Remember interest rate is not all that can be negotiated. Make sure that you negotiate on the closing cost of the loan as well. Chances are that a lender, if not ready to negotiate on the interest rates, can be convinced to do something about the closing costs. Therefore, having all your options open is always a good option.
Once again, it’s important to remember that nothing is impossible, only if you carry the right attitude. If determined to get what you want then certainly negotiation on subprime loan rates can be easily achieved.