What’s the secret to negotiating lower loan rates from a money lender?

Published: Sep 29, 2021

Are you feeling bogged down by the insurmountable amount of debt on your credit account? Or maybe, you’re seeking loopholes to help you save cash on the loan you’re about to take. If so, you’re in the right company.


Owing to the alarming reports about increasing household debt in Singapore, negotiating for better loan terms has become the rule rather than the exception. But, how do you convince a strong-willed money lender Singapore to cut down your interest rates and consequently risk shrinking their profit margin?

First, how do lenders gauge how much interest to charge you?

Before we get into the nooks and crannies of circumventing reduced loan rates, let’s get into a private lender’s head for a minute.

When you approach a money lender Singapore for a personal loan, they’ll leverage a couple of factors to assess the risk of being your creditor. The size of this risk determines the personal loan interest rates they offer you. For instance, some factors that might render you a high-risk debtor include a poor credit score, temporary job, or inadequate credit history. This is applicable for all types of loans, including auto loans, home loans, payday loans, and student loans.

Provided you know how your ideal money lender Singapore calculates their loan interest rates, you’re one step ahead in the negotiations.

With that said, these tips will help you negotiate cheap personal loan rates in Singapore:

1. Always compare money lenders before reaching a decision

As far as a legal loan in Singapore is concerned, laziness is the fastest way to lose money. When you’re shopping for a loan, no one expects you to sign on the first dotted line you come across. Instead, the best way around it is to list licensed money lenders in Singapore and weigh up at least three lending companies.

See, personal loan interest rates fluctuate with lenders. Getting prequalified by multiple lenders, therefore, helps you make an accurate comparison of what each lender is offering. And while a low-interest rate doesn’t necessarily insinuate a perfect lender, there’s no harm in finding out. If the lender of your choice is offering a 4% monthly interest rate yet there’s another one offering 3.2%, you can subtly let them know that you have options. Granted, they’ll be willing to either match or thrash their competitors. If you don’t know where or how to compare money lenders, loan comparison sites will help.

2. The returning customer advantage

If you’re borrowing from a money lender Singapore for the second, third, or twentieth time, this is a great trump card to play. Ideally, negotiating for a discount based on your customer loyalty has a greater chance of success. For one, there’s proof of great repayment history, and secondly, you’ve already demonstrated willingness to conduct additional businesses with the lender. the lender wouldn’t want to lose a good client to hungry, competing lending companies.

3. Look out for seasonal offers

If it’s Christmas time in Singapore, you won’t miss a lending company that’s offering discounted vacation loans. The same applies to the period preceding college admissions. You can always take advantage of seasons to present a case to online lenders. After you list licensed moneylenders Singapore, single out those that acknowledge public holidays, and other special seasons.

4. Exploit your employment stats

Do you work for a renowned financial institution? Hold the corner office at your company? These are just a few of the key resources you can exploit to bag a special loan deal. The reality is that money lenders extend subtle biases towards high-income earners or financially inclined employees. A well-paying job is stronger proof of sustainable cash flow than a starved pay slip.

5. Build a strong case using your credit profile

Primarily, a stellar credit rating is a powerful negotiation tool for bagging a cheap legal loan in Singapore. The thing is, although private money lenders prioritize profit, most would bypass just a little bit of money if it means securing a low-risk debtor. So, extract your previous loan repayment records, credit card reports, and any other document that shows you’re creditworthy. Provided you can prove that you’re an AA borrower, you get to call the shots, at least to some extent.

6. Don’t ignore the loan fees

It’s easy to focus nonstop on interest rates while completely ignoring other loan fees. Interest rates carry the heavier weight, we get it. But, you can negotiate other fees to further lower the personal loan’s APR. In fact, the only non-negotiable loan fees are those set by the government. But if there’s none, then don’t hold back. Also, exude confidence while at it. A straight, honest, face-to-face answer is more likely to turn the odds in your favor, compared to a shy submission made over the phone.