Equipment loans, how to get low interest


Lenders will use your credit score, debt to income ratio, and payment history to assess your ability to not only make your loan payments, but to do so in a timely manner as well. A low credit score will get you a high interest rate. Stay on top of your credit score and keep an eye on any outstanding debts. The quickest way to improve your credit score is to pay off any negative debts on your credit report rather than applying for a new credit card or loan. The higher you can get your credit score, the lower you can negotiate interest rates.


A larger down payment shows lenders your strength as a borrower and your ability to save. A larger down payment is the most prominent indicator of a borrower’s creditworthiness and can provide you with an easier approval process. A lower interest rate can also be obtained by lowering the loan-to-value ratio with a larger down payment. Be sure to ask your lender about the cut-off points for down payment size. Sometimes, all it takes is a small increase in your down payment to significantly lower your interest rate.


Don’t corner yourself by going to one bank or lender. Don’t be afraid to visit multiple banks. Having multiple offers allows you to take back power as a borrower and negotiate terms and interest rates between offers. Comparing and negotiating allows you the opportunity to find and choose the loan with the best interest rate that most benefits you.

Experienced lenders also tend to ask you if you are working with other lenders and for any feedback you’ve received. Don’t be afraid to communicate this to your lender. This will give him insight to other offers you have and how to live up to what you’re looking for.


When it comes to financing, local banks and credit unions have a reputation of beating outside or national competition. The reason local banks often give better loan offers is because new loan relationships to a bank means more than just financing a loan. Aside from loan income a local bank can make, a new loan can lead to new business checking accounts, merchant or credit card services, or even employee bank needs, if applicable.


Once your lender has offered you loan terms and interest rates you are comfortable with, be sure to lock them in to protect yourself against any potential increase in interest rates. Don’t forget to keep an eye out on decreasing interest rates before fully finalizing your loan with your lender. Contact your lender about the possibility of lowering your interest rate to match any offers he has available.


Finally, schedule a meeting with your lender, either in-person or over the phone. Interaction with your lender can help you get a lower interest rate, as communication is compelling to a lender. Be punctual to this meeting and be prepared. Present your lender with a well thought out proposal demonstrating your commitment to the equipment’s use, your ability to pay, and your enthusiasm on obtaining this loan.