Bank loans are commonly used in the public but little is known about how to get these loans at a lower interest rate. Usually, the banker is asking all the questions and giving all the demands. Don't let a bank employee intimidate you into accepting larger interest rates and shorter repayment terms.

Things You Will Need

pen and paper

Step 1

Get proof of credit and employment. Banks will require you to bring this information anyway. You will need to get a credit report and verify your employment for at least 6 months before the date of your application. You also need to let them know about any recent activity that may not be updated in the system. Usually you will need to bring proof of any recent transactions.

Step 2

Get references. Banks love references. These people can be professional or work related but they shouldn't be family members. It's better to list people who are strictly professional and do not have any bias toward your situation. A former boss would be a great reference to your credibility.

Step 3

Bring a co-signer. Banks view co-signers in a good way. If you have went to other lenders and been denied, it might be a good idea to bring in a family member or friend to co-sign the loans. Keep in mind, if you fail to repay the loan, this will negatively affect your friends credit. They alone will be responsible for the loan. Either way, it will positively affect your interest rate if you have a co-signer.

Step 4

Choose the right bank. Some banks offer higher interest rates and lower repayment periods. These banks are usually the smaller banks that are forced to charge higher rates due to less business. You should always talk to more than one bank. Some banks are more willing than others to cut interest rates.

Step 5

Negotiate. Don't be afraid to negotiate the terms of a loan contract. Always listen for feedback after your offer. You don't want to upset the lender, but let them know you are serious. You might be able to negotiate them down a bit on the interest rate. You can also negotiate the amount of time you have to repay the loan.

Step 6

Read the contract closely. Many lenders will knowingly include things in the fine print that allow them to change your interest rate and certain fees. These terms usually only apply if you miss a payment but sometimes a lender will knowingly switch the interest rates even though you have paid on time. This is why it's important to read the contract and be vigilant.

Step 7

Ask about closing costs. Each lender will require you to pay a small fee to close the loan. This fee usually depends on the amount of money that you are borrowing, but it can involve other factors too. You should factor this fee into the overall cost of your loan. You will also need the receipt for the closing costs, so you can get tax deductions.

Step 8

Verify each financial institution. Regardless of how large a financial institution is, you should always be vigilant and watchful. You should verify the company by going to the Better Business Beureau website. Each complaint left on the site comes from an actual customer that has personally dealt with the company on one occasion or another.


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