Different ways to negotiate a car loan

We are all aware of the fact that a business transaction can derive the highest amount of satisfaction, clarity, and efficacy only if the contractual agreements between the two business parties are signed on congenial terms and a mutual understanding exists between both the parties involved in the business operation. 

However, a proper negotiation can only take place if the sellers understand the needs of the buyers while producing and manufacturing the goods and services and make an effort to meet the specifications demanded by them and the buyers, on the other hand, feel satisfied after the consumption of the goods and services provided by the seller. 

In-car loans as well, the interested borrowers can bargain according to their ability so that they can reach the highest level of satisfaction while availing the car loan facility. Following are some of the important points that must be kept in mind before negotiating a perfect deal-

• Checking the Adequate Credit Reports- The first step in negotiating a viable trade deal while availing a car loan facility is checking the CIBIL score of the borrower and how the company fares in regulating the credit in the market. After careful analysis when the borrower finds out that the car loan interest rate for a private commercial banking institution is high and exceeding the limit of the purses and budget set by the borrower, he tries to negotiate a deal by offering a healthy percentage of money as a downpayment. 

Since this is a quid-pro-quo relationship with a tine give and take taking place, the bank finds the borrower is interested in doing business with the bank. Thus it lowers the car loan interest rate to appease the borrower. 

• Choosing the shortest loan tenure- Another important consideration that must be kept in mind while negotiating a deal between the bank and the borrower is to choose the shortest tenure of loan repayment. For eg- Syndicate Bank Car Loan urges the consumer to take an 8-year tenure for availing the loan facility. 

But the borrower who is availing the loan facility from the bank tries to reduce the loan tenure from 8 years to 4 years so that the repayment function of the loan becomes easy and the easier installments help the borrower to maintain uniformity in relationship with the banking institution. This negotiating capability of the borrower goes a long way in reducing his expenditure burden and thereby brings about the growth of the harmonious relationship between the private commercial banking institution and the interested borrowers. 

• Avoidance of paying extra money as brokerages- At times there is the presence of a third entity between the transactions of financial nature that take place between the banking institutions and the interested borrowers. This middleman is known as a broker and charges a significant amount of money as a brokerage that is to be made by the borrower out of his pocket. 

This leads to unnecessary expenditure by the borrower and significantly reduces the interest level of the borrower in availing the loan facility. Thus borrowers must look to reduce any external preliminary expenses that might arise in the process thereby delaying the lending function and repayment function simultaneously. 

Conclusion

Thus the aforementioned ways must be kept in mind while negotiating a perfect deal between the institutions which provide the credit facilities and the borrowers who are entitled to take the loan from the financial institutions. Negotiating a proper trade deal is an important consideration and must be thus be kept in mind while brokering a negotiated term of the contract between the banking institution and the borrower.