When we borrow money, we all want to get the best rate possible. But how do you actually get the best deal? Whenever someone asks me this, I always look at it from the lender's point of view: there is a lot of competition for loans. Take a typical bank on the high street as an example. For a moment, let's pretend that a new bank has just opened up across the street from them. The interest rates on loans at the new bank are lower than at the old one. If I worked in the first bank, I'd be worried at this point.
One of the best (if a little risky) ways for lenders to make money is by giving out loans. So, if the bank across the street lowered its interest rate by a small amount, it could easily get a lot of customers from the first bank. That's bad for business, so the first bank lowers their loan rates to match and adds a free gift. In some ways, the price wars are like those in grocery stores. But I don't think you spend as much on food as you do on getting a loan. That's why it's important to find the best loan deal for you the first time, instead of wishing you had gone somewhere else when you find out about a better one.
When you try to get a loan, there are two things you should keep in mind: what's the best deal for someone else is rarely the best deal for you, and they WANT you to choose them over every other creditor out there. From what I've seen, if you want to get the best deal on your loan, you need to push both of these points to their limits.
Most of the time, the loan you want won't be anything like the "standard" loan they offer, so let them know. If you need X from your loan but don't like what they're offering, talk to them about changing it to Z. X, Y, and Z can be anything, like a low interest rate, quick payment, or being flexible about credit history. If that doesn't work, just get up and leave.
The second rule is that there are so many lenders out there that you don't need to spend hours trying to get every last perk from one loan if another lender offers everything you need. When we talk about "need," it's not the same as "want." Do some research to find out how much you can realistically hope to pay back each month, how much money you really need, and anything else you can use to make sure you get what you want, not what the creditor thinks you want.
So, in short, figure out what kind of loan you need, make a list of possible lenders, and then talk to them about customising. Remember that you can always use companies against each other by saying that the other creditor was willing to give you a better deal and asking what they can do to make it better. If they can't give you what you need, cross them off the list and move on to the next one.
