Brits aren’t very good at haggling. We are either too shy or think it’s wrong or are too overzealous and unrealistic. We never seem to negotiate with creditors either.
I think it’s time to change that.
You know the saying ‘You don’t know until you ask’? Use that when dealing with anyone you owe money to.
Some creditors will say no, but some won’t. You don’t know until you ask and when times are tight, what have you got to lose?
Tips for negotiating with creditors
Negotiating with creditors might feel intimidating, but it’s an important step toward managing your debts effectively.
Here’s a step-by-step guide on how to approach it:
- Gather information:
- Collect all the details about your debts, including the amounts, interest rates, and due dates.
- Understand your financial situation – your income, expenses, and how much you can realistically afford to pay.
- Contact your creditors:
- Reach out to your creditors as soon as you anticipate a problem with making payments.
- Look for contact information on your statements or their website.
- Stay calm and polite:
- Approach the conversation with a calm and respectful tone. You get much more out of people when you show a little respect.
- Remember, the goal is to find a solution that works for both parties.
- Explain your situation:
- Be honest about your financial difficulties. Explain any changes in your circumstances that have led to your inability to make payments.
- Propose a new repayment plan:
- Based on your budget, propose a new repayment plan that you can afford. This might involve smaller monthly payments or a temporary freeze on interest.
- Highlight your willingness to pay:
- Make it clear that you are committed to repaying your debts and that you’re seeking a solution to avoid defaulting. You’ll get a lot further once you make this clear!
- Ask for temporary assistance:
- In cases of extreme hardship, ask if they could provide temporary relief, like a payment holiday or reduced payments for a few months.
- Request changes in interest rate:
- If your interest rates are very high, inquire if they’d be willing to lower them to make the repayment more manageable.
- Get agreements in writing:
- If your creditor agrees to new terms, make sure to get the details in writing. This protects both parties and prevents misunderstandings.
- Stay committed:
- Once you’ve negotiated new terms, stick to them. Make your payments on time as agreed.
- Follow up:
- If you encounter any issues or your situation changes, communicate promptly with your creditors.
- Keep records:
- Maintain a record of all communications, including dates, times, and the names of the individuals you spoke to.
Remember, creditors are often more willing to work with you if you’re proactive and transparent about your situation.
They prefer getting paid in some way rather than not at all!
If negotiating directly feels overwhelming, you can also seek assistance from organizations like Citizens Advice or StepChange. They can help mediate the process and provide guidance.
