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Learn How To Negotiate Better Loan Conditions

Loan conditions are something additional that lenders will require from time to time of their potential borrowers. Are you in the market for a new car, but don’t want to break the bank? Or maybe you’re in need of a new home appliance but don’t want to pay full price. In either case, learning how to negotiate better loan conditions can save you a lot of money.

Every loan you take out – whether it’s for a car, a home, or even a credit card – has interest rates and fees associated with it. By knowing how to negotiate these rates and fees, you can save yourself hundreds or even thousands of dollars over the life of the loan.

Here are some tips on how to negotiate better loan conditions:

1) Know your credit score.

This is one of the most important factors in determining the interest rate you’ll be offered on a loan. The higher your credit score, the lower the interest rate you’ll be offered.

For example, let’s say you’re looking to finance a new car. If you have excellent credit, you may be offered an interest rate of 2.99%. However, if your credit score is fair or poor, you may be offered an interest rate of 5.99% – that’s two percentage points higher!

Additionally, some lenders will require a higher down payment if your credit score is lower. So, it’s important to know your credit score before you start negotiating.

2) Do your research.

Before you start negotiating, it’s important to do your research and know what interest rates and terms are currently being offered by other lenders. This will give you a good starting point for negotiations.

For example, a paystub calculator can help you compare interest rates and terms from different lenders. Additionally, proof of income paystubs can help you calculate what your monthly payments would be. From there you can decide what’s best for you.

Furthermore, it’s important to know the value of the car you’re looking to buy. This way, you can negotiate based on the car’s true worth – not what the dealer is asking for.

3) Be prepared to walk away.

If the lender isn’t willing to meet your needs, be prepared to walk away. There are plenty of other lenders out there who may be more willing to work with you.

Additionally, don’t be afraid to ask for a lower interest rate or fee. The worst they can say is no – and even if they do say no, you may be able to negotiate a different term or condition that’s more favorable to you.

For example, if you’re looking to finance a car, you may be able to negotiate a lower interest rate in exchange for a longer loan term. Or, if you’re looking to finance a home, you may be able to negotiate a lower interest rate in exchange for a higher down payment. Just remember to be creative in your negotiations.

4) Use negotiating power.

If you have good credit, be sure to let the lender know. This will give you more negotiating power and may help you get a lower interest rate.

Similarly, if you’re paying cash for the car, let the dealer know. This also gives you more negotiating power since the dealer won’t have to finance the car for you.

For example, if you’re paying cash for a car, the dealer may be more willing to give you a discount on the price of the car. Similarly, if you have good credit, the lender may be more willing to give you a lower interest rate.

5) Know when to stop negotiating.

There’s a point where further negotiating won’t do any good. Once you reach this point, it’s best to stop negotiating and move on.

For example, if the dealer is only willing to lower the price of the car by $200 but you were hoping for a $500 discount, it may be best to walk away. Similarly, if the lender won’t lower the interest rate on your loan, it may be best to look for another lender.

6) Read the fine print.

Before you sign any loan documents, be sure to read the fine print. This is where all of the important details are – such as the interest rate, repayment terms, and fees.

By taking the time to read the fine print, you can avoid any unpleasant surprises down the road.

When it comes to negotiating a loan, it’s important to be prepared. Do your research, know what interest rates and terms are currently being offered by other lenders, and be prepared to walk away if the lender can’t meet your needs. Additionally, be creative in your negotiations and use your negotiating power – especially if you have good credit.

5 Important Pieces of Paperwork You’ll Need When Seeking a Loan

Keep all your important pieces of paperwork safe and findable. Applying for a bank loan is an arduous process primarily because of most lenders’ requirements. Most requirements involve presenting paperwork to prove something to the bank, making you worthy of the loan.

Whether looking for a personal or a business loan, these requirements are pretty standard and are often easy to procure and submit. Failure to provide the documents will ensure that you do not qualify for the loan, so it is best to promptly find and hand them over.

The critical pieces of paperwork you will need when seeking a loan will include:

Proof of Identity Documents

First and foremost, you will have to prove your identity to the bank before they can even consider you for a loan. There are various elements that your identity documents prove, such as your age, nationality, and citizenship.

Documents the bank can ask you for as proof of identity may include your: 

  • National or State Issued ID
  • Passport
  • Driver’s License
  • Military ID
  • Social security card
  • Birth certificate 
  • Certificate of Citizenship

The bank will probably only ask you for copies of the above documents, but it is always a good idea to have the originals ready.

Your W2 Form to Prove Your Income

You will also need to prove to the bank that you can pay back the loan, and the best way to do that is to have proof of earning an income. Consistently earning an income ensures that you can make deductions towards the loan payment, even indirectly from you.

Tax documents are the best documents for proving an income. The best part about it is that you can quickly get an online W2 form. Three years of your past income returns should be enough to convince the lender of your ability to pay back the loan. However, you should provide as many forms as the lender asks for during the loan process.

Financial and Bank Statements

If you are with another bank, a lender will ask you for your bank statements to determine your financial capacity. You will be asked for such documents when applying for a commercial loan for your business.

The bank will need your balance sheet, cash flow statement, and profit and loss statement. The statements will likely have to go back at least three years though the statements should be up to date. Other lenders will also ask for your financial information, including three months of your business’s financial statements.

Your financial statements will also be vital for determining your creditworthiness for a personal loan. The bank may also ask for your personal statements if your business is small or has only operated for a short while. You may also require a personal guarantee to get the loan in such cases.

Loan Documents or Lease Agreements

If you have any open loans or leases, the bank will require you to submit the loan documents and lease agreements. It is especially so for a business loan.

The bank wants to know if you have any commitments that might prevent you from paying the loan. It is good to have lease or mortgage agreements in hand if the bank asks you for them.

Proof of Address

A lender may ask you for proof of address if the above documents aren’t enough or if you are using your house as collateral. If so, you will need to prove that you own the property. You can typically use a utility bill, mortgage or lease agreement, property tax receipt, or home insurance documents for proof of address.

These are some documents that a lender will ask you for before giving you a loan. The bank will then know your personal and financial information. These documents should be ready by the time you visit a lender to ask for the loan, and if so, you’ll be safe.

Direct Lending Fell by 29% in Europe

Direct lending is the provision of credit directly to small and middle market companies for growth or acquisitions. With mainstream banks reducing their supply of loans, new sources of finance have developed.

Non-bank or direct lending saw a total of 140 European deals in the first half of 2020, compared to 197 for the same period last year, a decrease of 29%.

The latest Alternative Lender Deal Tracker from Deloitte showed deal count dramatically slowing as the COVID-19 pandemic impacted the private debt markets, especially in Q2 when the volume of deals fell by 58%, compared to the same period in 2019.

The majority of the deals were mergers and acquisitions related with 67% of the European deals being used to fund a buy-out. Out of the 447 deals in the last 12 months, 83 deals did not involve a private equity sponsor, which is in line with the previous year.

Deloitte’s deal tracker also revealed that within the United Kingdom, business services have been the dominant user of Alternative Lending accounting for 29% of the total deals, followed by the technology, media and telecommunications sector at 19%.

Floris Hovingh, head of Alternative Capital Solutions at Deloitte, commented: “One impact of the COVID-19 pandemic has been for direct lenders to hit the pause button during the second quarter of this year.

However, they have become very active again in the second half of the year as pressure on deployment catches up and mergers and acquisitions activity rises.

Hovingh continued: “The lending market has become somewhat binary. Companies that have proven to be resilient in the pandemic are much sought after and commercial terms offered are not far off from pre-pandemic times. In contrast, impacted sectors have of course been given a wide berth.

Deloitte is a multinational professional services network with offices in over 150 countries and territories around the world.

How Reliable is Data in Tightening Bank Cyber Security?

Data are individual facts, statistics, or items of information, often numeric. In a more technical sense, data are a set of values of qualitative or quantitative variables about one or more persons or objects, while a datum is a single value of a single variable.

Multi-factor authentication is one important pillar of cyber security in banking. Financial services interests have realised that requiring consumers to provide their personal information before processing transactions can deter data breaches.

And it has worked. Despite the numerous cases of successful high-profile hacking in the past 10 years, involving prominent names in the industry such as JPMorgan Chase and SWIFT, Fortunly believes more people would have been defrauded had there been lax customer authentication policies in place.

However, cyber robbers have managed to exploit a weakness in text-based MFA. In February, The Telegraph reported that Metro Bank and some smaller financial institutions were hacked. The attackers were able to get their hands on the codes sent to customers by capitalising on a flaw in SS7. Telecoms rely on this set of protocols to exchange SMS text messages and calls between one another anywhere in the world.

Clearly, more secure MFA is necessary to protect the integrity of financial services organisations as custodians of sensitive data of billions of people on the planet. This is where biometrics come in.

Fingerprint

Fingerprints, as well as finger-vein patterns, are being used by banks to authenticate customers at brick-and-mortar branches. Scanners for both biological characteristics can deliver fast, accurate results, which allow frictionless in-building and ATM transactions.

The availability of scanners in consumer electronics makes fingerprint authentication a feasible solution to boost cyber security. In fact, it has been adopted by the Royal Bank of Scotland for mobile banking. With just one touch, fingerprints can authenticate users to complete card payment transactions made via RBS’s mobile apps.

Face

What is advantageous about facial features as biometric details is that they are hard to cheat. Unlike fingerprints that could be reproduced with tape, the distinct qualities of a face could not in any way, shape or form be mimicked.

Voice

Voice biometric technology is sophisticated, for it considers up to 80 of the distinguishing vocal-tract attributes of a person. As biological data, the voice is actually more unique than the fingerprint.

Citibank has been using voice authentication since 2016. The consumer arm of the Citigroup analyses the voice pattern of a caller based on a pre-recorded voice print to help detect identity thieves more accurately.

Online Behaviour

Signatures, keystroke patterns and website browsing tendencies are some peculiar customer identifiers being tested by some banks to prevent fraud. Behavioural biometric tech may require a ton of historical data to be considered helpful, but its readings are claimed to be 99% accurate.

Conclusion

Ultimately, biometrics are imperfect. Physical characteristics and individual behaviours can change, so they can’t be reliable 100% of the time. Nevertheless, biological data is a potent tool for cyber security all banks should adopt to stay ahead in the game of cat and mouse they play with hackers until the next MFA innovation comes along.

How Engineers Are Helping Modernise Banking

Cryptocurrency is the poster child of “disruptive technology”. But, there are other areas where software engineers must update business-as-usual in banking in order to survive.

According to one survey, 80% of bankers agreed that their institution “needs to complete an assessment over the next three years, but only 15% expected that to lead to a modernisation effort.” Security threats, the demand for mobile banking, and outdated core banking systems are all driving banks to consider massive overhauls to their information technology systems.

These are the biggest modernisation challenges facing financial institutions – areas where developers and remote software teams can play a significant role in keeping banks competitive.

Making Updates To “Legacy Structures”

In the same survey, 60% of bankers reported that at least one of their major technology challenges is directly tied to aging core systems. “Maintaining legacy systems accounts for 78% of a bank’s IT budget, and 70% of bankers feel their core processes cannot quickly adapt to change,” reports Ripple.

Over time, banks have resisted major changes to their core banking system, the backend system responsible for processing transactions, updates to accounts, and maintaining other financial records. Core banking systems are in charge of processing deposits, loans, and posting credits, as well as updating other reporting and ledger tools.

There’s no simple solution to updating a bank’s core system: it’s a massive technological undertaking, but one that banks must invest in to serve its customers well. Engineers can help banks develop an agile, consumer-centric approach to core banking.

There are multiple approaches to solving the problem of archaic core systems, and software teams can phase in iterative changes that evolve a bank’s core infrastructure without too much service interruption.

Modernising Fraud Protection

Fraud prevention remains one of the most difficult technological challenges facing banks as cybercriminals get more sophisticated in targeting consumers. To illustrate the challenge banks face in keeping consumer account information safe, Kasperky Lab hacked a “large, publicly-traded financial company in less than 15 minutes.”

To protect consumers from malware and fraud attacks, banks must shift from a reactive to a preventative operations approach.

Developers can help banks prepare by modernising the systems that store user data, moving information onto an encrypted cloud. IBM’s AI tool, for example, is said to offer a faster analysis of advanced persistent threats and attacks. Developers must integrate the latest technology into banks’ security systems to modernise.

Digital Account Opening

Developers will play a critical role in helping traditional banks keep up with the demands of customers on-the-go. Digital account opening is one process where developers and software engineers can have an immediate impact.

Many banks are capable of letting customers open an account online through a web browser. Yet, mobile-optimised account opening is an area where the industry has lagged behind. There are some very good reasons why this process is so difficult.

Application fraud and strict anti-money laundering laws make it difficult for banks to meet regulatory requirements. An, there are significant security risks: in 2018, banks faced a more than $31 billion in global fraud loss.

But developers who help banks modernise to provide DAO will have an immediate financial impact. One report found that 69% of those surveyed wish to perform all their banking through online and mobile channels. BAI found that around 75% of millennials and more than 65% of Gen Xers prefer to use a digital channel to open a deposit account.

The core consumer of the future will expect to be able to open an account, take out personal loans, and transfer funds from any device at any moment. Developers must find a way to build the infrastructure to allow banks to offer DAO.

CommerceWest helps Children Find their Forever Families

CommerceWest Bank was founded in 2001 by Ivo Tjan and launched an Initial Public Offering in 2001. CW Bancorp is the holding company for CommerceWest Bank and has over $4 billion in total assets.

CommerceWest Bank helped children find their forever families by supporting Seneca Family of Agencies. Seneca has had a 100% success rate in placing children from foster care with their forever families for over 35 years.

Seneca improves services and support for the most vulnerable children and their families. It is their commitment to provide unconditional care and they will do whatever it takes to help children and their families thrive.

CommerceWest Bank is a California based full service commercial bank with a unique vision and culture of focusing exclusively on the business community. Founded in 2001 and headquartered in Irvine, California.

For over three decades, Seneca has worked to help children and families through the most challenging times of their lives. We offer a simple promise to each youth and every family we serve: no matter how profound the difficulties you face, we will be with you every step of the way.

The Bank serves businesses throughout the state with an emphasis on clients in Orange County, San Diego, Los Angeles, and Riverside Counties. We are a full service business bank and offer a wide range of commercial banking services, including concierge services, remote deposit solution, online banking, mobile banking, lines of credit, working capital loans, commercial real estate loans, SBA loans, and treasury management services.

CommerceWest Bank Overview

CommerceWest Bank will create a complete banking experience for each client, catering to businesses and their specific banking needs, while accommodating our clients and providing them high-quality, low stress and personally tailored banking and financial services.