A major difference between secured and unsecured debt is the high interest rate. It’s obvious you are not providing any collateral against the amount you borrow. Therefore, the lender will charge a high interest for their (let’s say) patience.
When you apply for an unsecured loan, it may seem like you don’t have any chance of lowering the interest. However, you can do this if you play smart, and do as we tell you.
Show them a proof of your total monthly income from every source. These sources can be your wage, interest, business profit,etc. Don’t forget to add your monthly expenses because once the lender sees proof of your income vs. your expenses, he will feel confident about you.
Before you prepare the documents, you need to take your time to run the numbers and see how much you can pay back each month.
You will need to collect every document related to the unsecured loan. This includes collection letters, invoices, statements, etc. You have to carry every application paper with you to help your case.
These documents will act as your support to negotiate a better interest rate and will offer the lender a sane reason to do so.
Once you are done, you need to call the creditor agency and provide them with your name, and account number so they can assess your details.
In case you are going through issues like illness, or unemployment, you need to inform your representative about this. Having a job is not the only security a lender needs. There are other income sources like we mentioned earlier that will make the lender confident about you.
It may be hard to convince him, but represent your case well, and you will get the support you need.
Whatever the situation is, make sure you are honest with your lender. You need to bring such details to your creditor, and win his trust. He would cooperate with you if you were straightforward.
Once you are done with the paperwork and calculations, you better come straight to your lender. You need to tell your lender about how much you can afford to pay backyour debt. Your lender may reduce the lump sum needed to settle your debt.
Your representative can choose between accepting or counteroffer such proposal.
You need to analyze the offer, don’t act too quickly. Lenders and bankers make aprofit with their business. So, they are not doing you a favor by lending you money. It’s their living, and they have to change their working conditions according to different clients. You are just one of them.
So, whatever offer they presented out of their generosity, they are still making some profit out of it. So don’t think that they have gone out of their way to make such an offer. No, the best they did was reducing their profit to get a new client.
Yes, and let's be real. Most people don’t make it a onetime affair. They may need to borrow again, and when they do, they won’t look for someone else. Think of it as a future investment.