5 Tricks Bankers Might Play on You
I recently decided to look into how banks get customers to pay a certain interest on a specific loan. Of course, most banks run a credit check on the potential borrower, which influences how high of an interest rate the borrower will pay. However, as I researched this topic more, I found that some banks use specific strategies to increase the interest rate when they have you in front of the table.
The following are 5 ways bankers can influence the interest rate you pay.
- Doing the negotiating at the bank. This is a familiar place to them, and it can make you feel intimidated.
- Not mentioning the rate at all and filling it on the paperwork. For example, they might verbally tell you about your monthly payment, but not the actual interest rate on the amount.
- They might say things like “Since you need the money today, I will set the interest rate at XX%, and you can always come back later and see if we can change it.” They are hoping you do not come back to reduce the interest rate since not many people do.
- They might try to delay the interest rate discussion. Since the borrower might have already invested quite a bit of time at the bank, he or she might just take the interest rate proposed at the end.
- Bring out the manager or bank president to build ego and give you a sense of comfort, possibly leading you to ignore the increase in interest rate.
We had a discussion in one of my classes about this topic. These were only five of many tricks we discussed that bankers could use on you to get you to pay higher interest.
Most often this interest rate increase can be as small as 0.25% or 0.5%, but when you are talking about a loan of tens of thousands of dollars, paid over 5 or more years, this small interest rate increase can end up costing you a lavish trip to Hawaii.
Don’t be fooled by those sneaky bankers.