Everyone wants to save money. One of the best ways to save some major coin is to negotiate a low-interest rate on high-ticket items such as your credit cards, auto loan, and mortgage. By negotiating a low-interest rate upfront, you can potentially pay these debts off faster and save a ton of money over time. Here are some financial tips and tricks to consider when negotiating your next purchase.
Yes, interest rates on credit cards can be negotiated. One of the best things you can do to get a low-interest rate on a new credit card is to shop around. As with most credit-based products and services, different lenders offer different rates. Some may offer a low introductory APR – which could be as low as 0% for qualified applicants. Others may offer a higher APR but lock that rate in to prevent interest increases later on.
Once you’ve found a credit card offer you like, one of your strongest negotiation tools will be your credit score. The higher your score, the more likely it may be for you to qualify for the lowest interest rate available. To move yourself into a more favorable credit range for low-interest credit card approval, click here to access a variety of online tools you can use to increase your scores.
Just like credit cards, if you want to find a low-interest rate for a mortgage, it’s wise to compare your lending options and ensure that your 3-bureau credit scores have reached their peak before you apply. Here are few more tips to add some negotiating ammo to your mortgage corner.
- Compare rate quotes from each lender with the closing costs that may be included with those estimates. One factor to remember is that the lender offering the lowest interest rate upfront may not be the ‘cheapest’ after they add on their closing costs and other fees.
- If you have a favorite lender, ask if they can match the low-interest rate found at another lender’s bank or financial institution. If you have a good credit score, lenders may be more willing to negotiate a low-interest rate with you.
- Negotiate with ‘discount points.’ Discount points allow you to pay more in advance for a lower interest rate over the life of the mortgage. These points are typically 1% of your total loan amount.
- Make sure your mortgage application is strong. Taking steps to improve your creditworthiness, maintaining a steady income, and having and a large down payment are some good ways to give yourself more leverage.
In comparison to a mortgage, there may not be as many ways to negotiate a low-interest rate on an auto loan. However, the main tips from above remain largely the same.
As with both credit cards and mortgages, shopping around for the best auto deal is always a great place to start. Once you find a vehicle and dealership you like, your next best talking point is, you guessed it, your credit score. Depending on the auto dealer, a large down payment may also give you additional power when it comes to achieving the loan terms you’re after.
Lastly, today’s highly competitive auto market can work to your advantage. With so many in-person and online dealerships competing for your business, one dealership’s ‘no’ could be another dealership’s ‘yes’ – especially when it comes to getting the deal and low-interest rate you want.
Disclaimer: ScoreShuttle is not a lending firm and does not provide or guarantee interest rates or loan approval of any kind. Always be sure to do your own research on the credit card, mortgage, and auto loan terms that are right for you.