The 5 Magic Issues in Bank Loan Negotiations
May 4, 2019
“What is the magic word?”
Do you remember this question the parent asked for your child? To teach him what? Pray and apologize.
Well, when it comes to negotiating with a bank – just forget about these magic words – “please” and “apologize”.
I have better and I can assure you that they sometimes do miracles. If anything else, they can at least open you like a magic stick to the doors of information hidden to you right now.
And every person who has or intends to take a bank loan needs just three simple things to avoid an unexpected financial trouble:
- All the information on which his decision depends.
- Information should be given to him in a clear and understandable way.
- Get the information on time.
I would like to state clearly that bank employees (in particular, credit inspectors) are very rarely lying to their clients!
I sign under these words.
But, on the other hand, these same employees often:
- Submit only part of the information.
- They do not explain – sometimes deliberately, but most often – because they do not understand everything.
- They give all the necessary information to the customer, but … “an hour per scoop” or “follow-up”.
How do you handle this situation? How do you know if you are saving important information, whether you have received it in a timely manner, and whether – in the end – did you really understand what the speech is about?
Here are the magic words. More precisely, the magical questions:
- Is there any other option / option?
Most people agree with the first one offered by the credit inspector. And here I am not talking about interest, but above all about the additional conditions for a loan. For example, property and life insurance or monthly bills on wage accounts, which often have different charges. Credit inspectors are trained to offer fixed and “forget” other options. But that does not mean that options do not exist.
Example: You want to know what your insurance property is for your mortgage loan. They offer a 5 year insurance package / prepay for 5 years /. If you do not ask if there are other options, you can not understand that you can also prepay for the whole period (option 2), but you may also pay monthly – no prepayment / option 3 /. Why then do you offer only option 1? They will say that “with the preferential terms you have given you, you can only use option 1”. So “do not want to burden you” with the other options. That your credit inspector is careful not to be burdened is good, but is it not better to know that there are other options?
- Can you without it?
My favorite question! You will be surprised at how many “can you do”. You just have not thought to ask. If you go back to the life insurance case: did you think you might ask if you can and without insurance. I’m not saying that insurance is a bad thing, but you can already have one and it will do your job. You may have some other reason not to want insurance. Yes, in some cases, if you get rid of “this”, your interest rate may rise. But the question is – how much? Sometimes raising is so symbolic that you absolutely deserve to lose extra products if you do not really need them. There are also cases where – for certain client accounts – the unwanted product can be removed and without affecting the interest rate.
- What does this mean to me?
Ask people! There are no stupid questions. What does it mean for you personally the condition that the bank puts, and not – in general, what it means. If it has not become clear to you as a 5-year-old child – ask! Ask, because after signing it will be too late. Because you will pay. Some – a whole life.
- What’s next, and how much will it cost me? Is this everything to come? What should I do? What should I pay / ?
Many consumers are grappling with the endless borrowing of borrowing, and they are unintelligible at all. Neither as a cost, neither as a process nor as a time to separate. The question “What’s next?” Will open new worlds of information. It will not always please you, but clarity is always strength.
- Is there anything else I need to know?
Ask this question when everything is fine and finished. You will wonder how successful this issue is for amnesia. If you get an answer: “At this stage – no!”, Know that you are dealing with a cunning player. He neither lied to you nor gave you all the information. In this case, return to question 4 and continue the game of questions.
What to do if you have no time, nerves, or feel insecure to participate in such a cat and mouse hunt?
Assign it to someone who likes to play this game or the best! – Make sure you really need this credit.
However, if you already have a loan and have to negotiate with your creditor for better terms, prepare well . Only these 5 questions, no matter how magical they are, will not do the job.