How to Negotiate With Creditors?January 16, 2018
It requires some skill to negotiate with the creditors with whom you enjoy good standing. It is better to avoid the credit problems reach such a stage where dealing with debt collectors becomes a regular affair. So how do you negotiate with creditors in a way that you start to have a lot of credit problems? Now let’s focus on the debt reduction negotiation and here are some strategies that you may use:
Late Fee Reduction
If you have an excellent payment record with some specific creditor, a late payment might not affect that much. Occasional late payments don’t affect that much. You may negotiate your way out rather easily. But if you make late payments occasionally, that won’t have too much of effect on the credibility. If you know that you won’t be able to make the payment on time, it is better to contact the creditor in advance and seek dispensation. In case of any event that may be affecting the late payment, you should let the creditor know and may well be prepared to provide the written evidence of the issue. The lender also needs to be assured that it is a one-time event.
Interest Rate Negotiations
It can be somewhat tougher to negotiate than a late payment. For the lender, they represent a continuous revenue stream, and they may be slightly adverse to reduce it. But before you contact the lender, it is crucial that you make a list of all the reasons as to why you are looking for a lower rate. You should also mention the fact that you have a long-standing relationship with the lender and that inability to do the same will mean meeting credit need somewhere else. While going for debt reduction negotiation just make the lender aware of the fact that you have a better option with another lender.
Lowering the Outstanding
This type of negotiation has more challenges fee or the higher interest rates. Remember that most of the lenders will not agree to it willingly. Here you have to make it clear to the lender that your situation is slipped to worse. You may cite a job loss or medical reason for the same.
In The End
These are just some ways in which you may negotiate with creditors and seek a reduction in debt.