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Originally Posted On: https://www.beautiful-solutions.co.uk/2021/07/how-to-deal-with-different-types-of.html
If you are in need of borrowing, then dealing with the right creditor is more than just about what they offer you. You have to be able to negotiate your way to an even better offering. You must also be well aware of your own situation, not just now but a few months into the future. You must be comfortable with the amount you are borrowing first and foremost. You should never be forced into taking on more than you need to, which is something some lenders don’t want you to do. Not to mention, you must be economically savvy as moving interest rates will affect your loan and amount. Don’t forget that you must have an honest relationship with your lender as the laws and regulations around lending can put both of you in hot water.
The carpet puller
Some lending companies are predatory or at least, they offer very complex and sketchy services. For example, many people have complained about IML and their Safety Net Credit service and are demanding refunds. This service was the opposite of what a normal lending service is; in that the more you borrow the less interest rate you pay. The deal is that your payments are small, but stretched out for many months or years. The total opposite occurred with IML, who were charging higher interest rates for those who borrowed more. This meant that the borrowers could never manage to keep up with the payments and they fell further and further behind. Not to mention, it seems like IML were taking money from their customers’ accounts instead of being voluntarily paid. This carpet-pulling technique is uncommon and hence, IML might be in hot water with the regulators and customers alike.
Your typical bank
Your typical bank is something everyone knows about. They are mundane, rather predictable and they usually, will offer a range of medium-quality products for a reasonably fair price. Don’t expect the bank to swing open the cabinet doors and give you their family china, but large national or multinational banks are usually willing to negotiate with you. This is done at the branch level because each branch is trying to compete with the other for customers. Speak with the bank manager if you can, about your needs. They may direct you to one of their employees, but you can always email and phone his or her office. You can also give them a rundown of the comparisons you have done of other banks. Banks often think because you have been with them a long time that you are a lifer. Prove them wrong by showing the finance manager in your local branch that you know what your other options are.
The personal loan pressure
Some lenders believe they can pressure you into taking an amount they know that you will struggle to pay off. This is usually done for personal loans and credit cards. If you have assets such as a business, a home, other property, a car, or jewelry, they might try to increase the amount by pulling some financial wizardry. How do they do this? They will calculate not just what your earnings and savings are, they will perform a secondary credit check. They do this by pooling the value of all your assets and then telling you that you could borrow more if you wanted to. They will suddenly give you far better interest rates too. This long-term lock-in is something they do with affluent clients they want to keep on their books because they know they can pay it off eventually. For the average person, your home and business is not something to gamble with. So only take what you need and focus on the repayment plan the most. The amount you borrow will be in your bank in no time, but the more complex road back to clearing off the money is a really important area.
Payday lenders
If you really really have to go to a payday lender, you should be aware that you almost always have no negotiating leg to stand on. They know that they are one of the last options you have and they don’t mind pushing the interest rate into the hundreds if not pushing near 1,000%. So, make sure you are aware of the risks, whereby they will lock in your assets or any future income until the amount is paid off. With some lenders, negotiating is easy. Banks often need a reminder that your custom is valuable but they usually come around and are more reasonable than other lenders. Stay away from predators that offer SNC like IML and know the risks of lending of all types.
