Can You Negotiate Personal Loan Interest Rates?
First thing first – can you negotiate personal loan interest rates? The answer is a resounding yes! However, banks and lenders are not very keen on having such negotiations but there is scope to reduce the personal loan interest rates in UAE. A personal loan in Dubai is one of the most preferred forms of loan by customers. Many of these customers are responsible and have good relations with the banks. So, as goodwill, the bank often decreases personal loan interest rates. However, the margins are variable.
What Are Some Tips to Facilitate Negotiation?
The good thing about negotiations is that you can easily learn to do them if you aren’t naturally equipped to do it. Given below are some things that you can do and follow to make your case appear strong in front of the bank or the lenders and get personal loan interest rates reduced:
1. Research and Prepare
Negotiations require very thorough research about the topic or product you are going to negotiate. Think of it as a debate where you have to give rebuttals for everything that the lender or the bank say in regards to your demands. If your research is thorough enough to convince the bank that it will still benefit from giving you the loan, it will be worth it.
2. Be Firm and Confident
Confidence is the basic thing that you will need to accomplish this task. Be confident while stating your demands and be extra confident when negotiating them. The bank is not just going to agree with your conditions or terms and just give you the interest rate that you are asking for. You will have to make a strong case for the bank or the lender to even start considering the terms. So, make sure that you are firm as well as respectful in stating your terms for the personal loan interest rates.
3. State Terms That are Equally Beneficial for all
Always remember to not go overboard when demanding a lower interest rate. Just like all businesses and organizations, banks have their monthly and yearly targets that they need to achieve to stay in business. Interest rates charged on loans and credit cards are the major way to achieve these targets. So, if you ask for an interest rate that is too low for the bank to allow, your negotiations might not work in your favor. Moreover, banks also have a set minimum bar for the interest rates that they can offer to the customers. So, try and come to a number that is beneficial for you and the bank and hence increases the chances of approval.
4. Be Prepared to Put Counter Offers
Counteroffers are the basis of negotiations. If your first suggested personal loan interest rate in UAE gets shot down by the lender or the bank, try and make counteroffers. Several fees are charged on personal loans in the UAE apart from the interest rate. Research about them and find out which one the bank would be willing to remove. Apart from government-imposed fees like registration fees, every fee can be open for negotiation. Read next: 29 Trending Business Ideas To Look For in 2021
What Are Some Ways to Further Support the Negotiations?
Learning how to be prepared for the negotiations and how to present yourself is only one half of the whole process necessary to finally reach there. Several things can be done in advance or gradually to make your negotiations case a little stronger. Following are the things to take care of:
1. Maintain a Good Credit History
If the bank is going to consider giving you relaxation on personal loan interest rates, it will be possible only when you have a great credit score. So, make sure you take your credit responsibilities seriously at all times to ensure that your credit score is always on point.
2. Keep Your Repayment History Flawless
A good credit score goes hand in hand with a good credit repayment history. If you pay your credit cards in full every billing cycle and stay under your suggested credit limit, you will be able to present yourself as a responsible debtor.
3. Learn the Interest Calculation Methods
Interest on personal loans in Dubai is either calculated on fixed rates or reducing rates. Fixed-rate personal loan interest rate will have you pay more interest during the whole tenure of the loan as compared to reduced. Research and negotiate for the type of interest rate that the bank can give you. You can also use the personal loan calculator in UAE available online to find the difference between both kinds of interest rates for personal loans in Dubai offered by the banks.
4. Take Advantage of Your Employer’s Reliability
Working with a high-end blue-chip multinational company can work in your favour. The better your employer’s goodwill and reliability in regards to company turnout and job stability, the better are your chances of paying off the loan. Personal loan applicants with safe and great jobs have higher chances of things getting tipped to their side.
5. Maintain Good Relations with the Banks and the Lenders
This goes without saying but loyal customers get special treatment in all business sectors and fields. Banking is no different either. If you have a good r4elationship with the bank and are seen as one of the most loyal customers, you may get a chance at getting a special low-interest rate personal loan in the UAE. So, choose your banks wisely from the start and stick with them. Read next: How To Improve The Quality Of Your Career
Conclusions
Negotiations are not always sure to succeed, sometimes even when you are a great negotiator and have done everything possible. Even though you are supposed to be firm in your standing when negotiating the personal loan interest rates, know when to take a step back and change your terms a little bit. Enough for the bank to consider them harmless and doable. With a little push and some quality research, you can get your personal loan interest rate lowered to a significant amount.
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