Can I renegotiate the interest rate during loan repayment?


The loan is repaid according to a predetermined schedule. The customer undertakes to pay equal or decreasing principal and interest installments on specified dates. However, during repayment, can it renegotiate credit terms, and in particular interest rates?


Renegotiations of interest during loan repayment with the bank are possible, but they do not always bring the expected results. The borrower applying for renegotiation must have a good reason that will convince the bank to do so. 


Renegotiations possible

Renegotiations possibleRenegotiations possible

Reluctantly, but banks may proceed to renegotiate the interest rate on the loan already during its repayment, but the client in the application submitted to the bank must provide a really important reason why such action would be justified. The sole fear of losing a single customer is not enough for the bank to want to lower the borrower’s interest rate.


On the other hand, it is possible to negotiate a better interest rate during a loan if market conditions have changed significantly. There were high margins at the time the loan commitment was made, and they are currently low. Therefore, the customer has a serious argument to initiate interest rate renegotiations. It is advisable especially when the loan is to be repaid for many years, and at the same time has a high amount.


What other option instead of negotiate?

What instead negotiate?

If the renegotiations of interest during the repayment of the loan do not bring the expected results or the bank refuses to join them at all, the client may refrain from further action or decides to transfer the liability to another bank.


Refinancing loan repayment or consolidation, if the borrower has more than one loan or repayment loan, they can bring real benefits in the form of lower principal and interest installments. It should be checked, however, whether they result from lower interest rates and more favorable loan repayment terms, or whether, for example, their amount is related to the extension of the loan repayment period. In the latter case, yes, the client charges his monthly budget less, but at the same time a longer period of payment of installments increases the total cost of credit, which the borrower must be aware of.


Both refinancing and consolidation loans it can be granted only to those clients who are not indebted, ie they regularly paid principal and interest installments to the bank. 

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