Getting a better interest rate can save you a ton of money in the long run, especially if you’re getting a loan with a long amortization or you carry a balance on your credit card for long periods of time. Some people simply accept the interest rate that’s suggested by the lender without putting up any sort of fight. While you don’t want to come to blows with anyone over an interest rate, you certainly don’t want to roll over and accept a higher interest rate than you deserve.

You probably won’t have much luck talking a lender into giving you a better interest rate if you have horrible credit and you don’t have a good track record of making your payments – especially in this economic climate.

Then again, I once worked at a loan company where there was one notorious customer with horrible credit, but he also had a ridiculously persistent wife who would actually call and hassle the employees until someone agreed to give her husband the loan. These were high interest loans and designed for people with bad credit, but his credit was even too horrible by our standards. Everyone was so terrified of the wife, though, that they always wound up getting the loan. Once one was paid off, they would start the whole process of apply-denial-harassment-approval all over again.

So although you might be able to bully your way into a loan approval or a better interest rate, it’s probably not going to be a good situation.

There are better ways to get a lower interest rate.

1. Ask for one! Some lenders have their interest rates carved in stone and there is simply no way to get a lower interest rate without taking your business elsewhere. If your lender has varying interest rates based on credit scores, however, you may be able to talk your way into a better interest rate by just asking. You may be surprised how easy it is…you ask, the representative says “Sure,” and poof! You have a lower interest rate. It isn’t always so easy, but sometimes it is.

2. Move up the ladder. If your request for a lower interest rate is turned down by the representative you’re dealing with, ask to speak to a supervisor or manager. It may be that the representative just didn’t have the authority to lower interest rates. Besides, managers are usually brought to the phone when the person on the other end is steaming mad. If you approach it as a simple request in a polite manner then the manager will probably be more than happy to accommodate your request.

3. Bring references. If you’re applying for credit and don’t have much of a credit report built up then you may be able to talk your way into a lower interest rate by demonstrating your ability to pay for things in a timely manner. Bring a letter from your landlord stating that you’ve never been late with your rent, or bring copies of your utility bills to show that you never make late payments on anything. If you’re able to show that you already know how to keep up on your bills then you may get a better interest rate than if you merely showed up with your sparse credit report.

4. Be nice. You should be persistent, but don’t be so aggressive that the person you’re dealing with starts to dislike you on a personal level. You would be amazed at how much leeway some employees have at financial institutions, so if you tick off the very person who has the power to lower your interest rate then you’ll probably find yourself with a high interest rate and – woops – a lost file or accidental fee or two. Don’t tick off the people who have access to your money when you’re trying to talk your way into a lower interest rate.

5. Don’t get wacky. Before you try to talk yourself into a lower interest rate you should do some research to find out what the best interest rates for your credit score are. If you ask your lender to give you a 2% interest rate on an auto loan when the best rate offered by any lender for your credit rating is closer to 5%, you’re going to get shot down and look a little silly, all at the same time.

If you’re wondering whether you should even bother trying to talk your way into getting better rates, the answer is a definite YES. A lower interest rate can save you quite a bit of money, and what’s the harm in trying? The worst they can say is no, and then you know that it’s time to shop around for a better interest rate somewhere else.

Related posts:

1. How to Talk to Creditors
2. Tom’s third post: Ever-rising interest rates!
3. Interest rates – one of life’s great mysteries…
4. 7 Ways to Destroy your Credit Rating
5. Credit Card Subsidies: Three Ways the Minority is Paying for the Majority