Question

What is an example of a borrower's goal or objective that can influence a loan negotiation?

Answer 1

An example of a borrower’s goal or objective that can influence a loan negotiation is the goal of obtaining the loan funds on the most advantageous financial terms possible. For example suppose that an individual goes to a bank for the purpose of car/vehicle loan i.e. getting a loan to buy a new car. The bank offered him loan at a rate of 13%. He can negotiate with the bank to lower the interest rate based on his good credit score and on the basis of his financial standing, credibility and past relationship with the bank.

Thus the example given above is that of a borrower who is negotiating with the bank to obtain the funds on the most advantageous financial terms possible so that he can finance the purchase of a new car in an optimal manner.