How To Negotiate Loan Terms – Effective Tips That You Must KnowFebruary 2, 2022
Of all the soft skills we learn through experience, good negotiation skill is still one of the most underrated ones. A person who can negotiate a deal with anyone and anywhere is bound to get the best out of even the most competitive markets. For example, when you finally decide to buy a good automobile for yourself, seldom do you think about negotiating prices with the dealerships, leaving alone getting a bargain on the loan terms. However, the truth is that even if you are made to believe that you are getting the best deal, there is always room for further negotiation.
In this article, we will discuss the various factors you should be aware of before applying for a two-wheeler loan. In shorts, we will discuss points like Do your homework, Authority, Structure, Final call that is the last point. These tips will help you in negotiating better loan terms. It finally boils down to your bargaining power, but surely, the following points will act as your arsenal while trying to strike the best deal for yourself.
So, the following are some of the important steps to be taken for negotiating better loan terms with your dealer –
1. Do Your Homework
You must do extensive research before applying for a Two wheeler loan. Study about the details of the different kinds of loans offered by various financial institutions. This will enable you to find the right financial institution. Getting acquainted with the terminologies associated with the process will also help get a good deal.
Some of the important things to research are hidden expenses and competitor prices. Make sure that you go prepared and can distinguish between the different offers being pitched at you. This win.
2. Have Authority
Don’t just let them run the show. The previous point would have prepared you for the process. Be in command of the entire process and talk in their language using their terminologies. Ask the right questions, and don’t just take whatever is being offered. Compare the prices with what you had researched before the application and let them know that you are aware of the interest rates or the discounts in down payments being offered by the competitors.
3. Understand the Structure
Understanding the entire structure of the two-wheeler loan that you are taking will be beneficial in knowing where you can bargain for a better rate. For example, financial institutions generally charge a fixed percentage of the entire amount of a loan as a prepayment. This is like a lump-sum payment that you have to make right at the beginning.
Although paying a sum in advance can reduce the interest that you have to pay, paying a lower amount at a time in the times of dynamic interest rates can ease your financial burden at present. You can check EMI and Interest rates with the Online Bike Loan EMI Calculator. Here are the simple steps like- Simply select your Loan amount, Interest rates and Loan Tenure and get the results in the form of payable EMI with interest rate. Hence, you can always negotiate on the amount you want to pay upfront.
4. Only You Make the Final Call
If you have a good credit score or collateral to pledge, then never let anyone else make the final call. Right from interest rate to the processing fees as well as small things like prepayment charges, annual fees, and commission can be negotiated. Only when you are satisfied by the terms you are being offered, do make the final call. However, think calmly and use all your research before you make that call. For example, a longer tenure might seem attractive at first due to the lower EMIs, but the interest you’ll pay will be much higher. Hence, think for yourself and choose the right terms.
In the end, all we would like to advise is to do proper research before you apply for the loan and think very carefully before making the final decision. There is considerable scope for negotiation even after you think you’ve got the best deal. Just use the above points effectively to strike the best deal for yourself.