05 Mar How to Lower Your Interest Rates

Having multiple debts with varying interest rates can take a serious toll on your budget, particularly if they’re of revolving or unsecured credit. Personal loan lenders are sanctioned to tack on interest rates as high as 27.50% – almost a third of your loan amount – to your principal, which makes an enormous difference to your budget. Credit cards usually have interest rates set at around 22%, meaning that more than a fifth of your loan amount is charged in interest.

The strain these interest rates put on your budget may have led you to wonder whether you can negotiate your interest rates. Yes, it is possible, especially if you enlist the help of a debt counsellor. This post discusses two effective ways to lower your interest rate: negotiation yourself or negotiation with the law on your side.

Let’s dive in!

Two Ways to Lower Your Interest Rate: Debt Review and Negotiation by Yourself

There are two ways you might lower your interest rate: negotiating with creditors yourself or using the help of an effective professional, such as a True North Debt debt counsellor.

Option One: Professional Help

A debt counsellor can help you mandate your creditors to negotiate your interest rate. This is because you’d be under a legal process called debt review. It’s a legal process wherein your creditors must agree to lower your interest rates because the National Credit Act says so.

Section 86 (5) says, “A consumer who applies to a debt counsellor, and each credit provider…must…comply with any reasonable requests by the debt counsellor to facilitate the 10
evaluation of the consumer’s state of indebtedness and the prospects for responsible debt re-arrangement; and participate in good faith in the review and in any negotiations designed to result in responsible debt re-arrangement.”

This section says credit providers must comply with “reasonable” requests from your debt counsellor to negotiate anything that would result in “responsible debt re-arrangement.” This part of the Act is supposed to relieve you from over-indebtedness, so creditors must comply.

Over-indebtedness is when you’re so indebted that you can’t afford to pay essential expenses, such as repayments or bills. Debt review is a process meant to relieve you of this. If you’d like to know more, don’t hesitate to reach out to True North Debt.

Option Two: Negotiation by Yourself

If you don’t qualify for debt review or don’t want to undergo the process, you could always try to negotiate with creditors yourself. Contact them and explain your situation and that reduced interest rates would help you become able to complete repayments more promptly and save you from legal action. They might say yes, they might not. In the end, their decision is in their hands. They’re not obligated to reduce your interest rates, as you agreed to the interest rates when you first entered into the credit agreement.

Trust True North Debt

Let us help you reduce your interest rates with the help of our expert debt review team and debt counsellor. Our debt counsellor will draw up a proposal for reduced interest rates and repayments, then submit it to your creditors. They’ll negotiate with your creditors on your behalf, ensuring you never have to converse with them again. If you’d like to start the process or find out more, contact True North Debt.