Negotiating with your creditors is important especially if you are on the verge of filing for bankruptcy. It also helps you when you are in a state in which you don’t have enough cash to pay off your debts and your lender has a softer repayment plan for people in a situation like yours.
Through negotiating you can pay less than you owe or get new payment terms that favor your current financial situation. This is a good way of settling or taking control of your debt.
So, if you are having problems paying off your credit card debts on time consider visiting your creditors to negotiate for better payment terms with them as a credit card debt relief plan.
If you want to have a negotiation with your creditors and you don’t have any clue on how to go about it, here are some tips:
1. Suggest an offer you can afford
It is always a clever move to present a viable solution to your financial solution before you pick your creditor’s brain on the same. Develop on contact a financial planner to help you come up with an affordable option for settling your debts; always start low.
As you negotiate with your creditor you should not give the creditor the highest offer you can afford. Since it’s obvious that the creditor will raise the amount of your offer, it’s likely that the creditor’s offer will be closer to what you can afford to pay.
2. Stick to the plan
When you visit your creditor for negotiation, have a plan and purpose to stick to that plan. Since you know your budget and the amount of cash you can set aside for debt repayment go to the creditor with a plan. For instance, if you and your creditor reach an agreement that you’ll be paying $1,000 every, payday stick to that.
Although your creditor will always try to convince you to pay more cash, don’t be intimidated to use the other cash you’ve set aside for other uses to impress the creditor.
3.Adopt positive interaction skills
It is important to maintain a positive tone when talking to your creditors. Although it is possible that you may differ on some facts with your creditors, it is essential to continue with a positive vibe when negotiating with your creditors to convince them that you are serious about paying off the loan debt.
This positivity in your talk brings you closer to achieving the goal of renegotiating your debt for better payment terms. The creditor will be more willing to accept your proposals if you have a good attitude.
4.Know your rights before visiting the creditors
Know your rights and let your creditor know that you know your rights. Just try not to be too intimidating. If you know your rights it becomes easy for you because you will be dealing with the creditors from a position of strength.
Therefore, you are likely to have the terms of your loans changed.
5. Learn to document everything
When you delay with your payments the credit collectors will be calling you obsessively. Some collectors may threaten you illegally as they ask for the payment.
It is important to write down all the details of the credit collector including what the collector said; the threats they made. Documenting this information will help you a great deal when negotiating for better terms.
You may decide to go and report the threat incident to the authorities and when the creditors get to hear this, they may decide to offer you a reduced pay off.
Creditors generally don’t like being investigated, for whatever reason.
6. Get to know the creditors’ bottom line
As you negotiate with your creditor try to figure out how much the creditor can accept to be paid in monthly payments. Once you know this bottom line, it becomes easy for you to get to a new agreement with them fast.
7. Don’t get intimidated by the creditor
Creditors or debt collectors tend to use harsh tones or even threats when you try to negotiate for better loan repayment terms with them. They may threaten to report you to credit report agencies. The threats should not shake you to an extent of losing
focus of the proposals you have for the negotiation.
Since the creditors are trained and are professional debt collectors, they are likely to use tactics and terminologies which could confuse you. Make sure you understand everything they say so that you avoid being intimidated.
8. Get your interest reduced and late payment fee completely removed
Try and get your creditors to reduce the interest rates on your debt and if possible to remove late payment fee on your loan debts. Talk to the creditor and try to make them see why they need to reduce interest rates on your loan debts and get rid of late payment fees so that you can pay your loan off fast. Especially if you don’t have enough cash for a lump sum pay off.
9. Make sure you get a signed release from the creditor
After you’ve successfully negotiated new terms for your loan repayment with the creditor and reach an agreement that you’ll settle for less than the previous amount, confirm that the creditor has signed a release.
10. Don’t agree to terms you can’t adhere to
During negotiations, a creditor may offer to reduce your payment or eliminate the interest that comes with your debt settlement on tougher conditions that you pay your debt off in a given timeline.
You should be careful with this decision because it can end up hurting you financially or even putting you into another loan debt with harsh terms.
They may ask you to get someone else to sign the forms with you a guarantor; someone who will be liable for your debt if you fail to pay. Be careful when you are asked to sign anything on offers like these. It’s better you consult a lawyer or a credit counselor first.
For more information or clarification on how to negotiate for better loan terms, feel free to contact us.