How to Negotiate Lower Interest Rates on Your Credit Cards, Student Loans, and Mortgage

Sometimes a simple phone call can save you big bucks. Here’s how to negotiate with lenders — and what to do if they won’t budge.

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Updated May 13, 2024
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If you feel the weight of your debt hanging over your head, chances are you’re not alone. A 2018 report from credit bureau Experian found Americans owe a hefty $13.3 trillion in total consumer debt.

On top of repaying the principal balance, high interest rates tacked onto your credit card debt can worsen your financial situation. If you’re struggling to figure out how to pay off debt, in many cases you can ask for a lower interest rate to lighten the load.

Here’s how to negotiate lower interest rates for credit card debt, student loans, and even your mortgage.

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How to negotiate lower interest rates on your credit cards

The Consumer Financial Protection Bureau’s latest credit card market report revealed that average credit card rates are between 16.6% to 17.2% APR. With rates that high, interest charges can quickly add up if you’re unable to pay your monthly statement in full.

For example, if you paid $50 per month toward your $2,000 card balance at 17% APR, you’d spend more than $970 in interest just to get out of debt. By negotiating your interest rate to 15% APR, your interest costs would drop to less than $800.

Learning how to negotiate lower interest rates on credit cards could save you some serious cash — but you’ll need to be prepared.

1. Review your odds

To improve your chances of lowering your credit card rate, review where you stand as a customer. For instance, if you’ve been an active cardholder for a long time, your loyalty may earn you footing toward negotiating your rate.

Other indicators that might boost your odds for a favorable interest rate include a solid history of positive payment habits since opening the account or regularly making high-value purchases on the account.

Another consideration to make is when you first opened your account. If you had lower credit when opening the account but your score has since improved, you might be able to get a reduced interest rate based on your stronger credit score.

2. Prepare your argument

Next, you’ll need to gather all of the details associated with your account. This includes having the following information handy:

  • The month and year you opened the account
  • Your current interest rate
  • Your average monthly and yearly balance
  • A list of competitor rates

Most of this information can be found on your monthly statement or online account. After you’ve noted the details of your account, shop around for credit cards offering comparable benefits and competitive interest rates.

3. Make the call

When calling your credit card issuer, you’ll ultimately want to speak to a representative who has the authority to lower your interest rate. This may or may not be the first person to assist you — in any case, always document the first and last name of each representative you speak to in case the line is disconnected.

See if you can avoid back-and-forth negotiations by starting off with the basics, which could go something like this:

“Hi, I’ve been a customer of ______ since ______. I always make on-time payments and typically have an average monthly balance of ______. Overall, I really enjoy using the card, but my interest rate is a bit high. How can you help me lower my rate?”

Some issuers might agree on the spot without any pushback.

What to do if you’re unsuccessful

If you don’t get the answer you’re hoping for, follow up with: “Thank you. May I please speak to your supervisor?”

Once you have a decision-maker on the line, politely — but firmly — restate your case and include details about the competitor interest rates you researched in advance. The dialogue might sound like this:

“Hi, I’d like a lower interest rate on my credit card. I’ve been a loyal customer and have demonstrated this by ______. But I received a credit card offer from [card issuer] with similar benefits as this card and at a much lower rate of ______. I’d prefer to stay with you, but the offer is appealing. What can you do for me?”

If your issuer won’t budge, you might consider alternatives to lowering your interest rate, such as applying for a zero-interest balance transfer card or consolidating your credit card debt with a personal loan. 

How to negotiate lower interest rates on your student loans

The reality is that student loan rates are notoriously difficult to negotiate. But depending on the type of student loans you have, there are a few options you can try.

1. Check what kind of loans you have

Your options depend on whether you have federal or private student loans.

The interest rates for federal loans disbursed in the 2018-19 school year are set at 5.05% for undergraduate Direct Loans, 6.60% for graduate Direct Loans, and 7.60% for PLUS Loans. These are fixed rates set by the U.S. government and are non-negotiable.

If you have private student loans, however, you might be eligible for interest rate discounts. Before reaching out to your private lender, gather the details of your private student loans, including your account balances, interest rates, whether you have a fixed or variable rate, and your loan term. This way you have all of the information in front of you as you discuss your options.

2. Make sure your interest is already as low as it can go

Remember, when it comes to getting lower interest rates on student loans, you are your best advocate. Research whether any of your lenders offer interest rate discounts.

Many lenders provide a 0.25% interest discount when you enroll in automatic payments or provide additional rate discounts for new student loans if you already have a relationship with the lender (if you also have a checking account with the institution, for instance).

Additionally, if you’ve demonstrated regular on-time payments for a certain number of years, some lenders provide additional discounts.

3. Pick up the phone

Call the phone number on your monthly statement or your online account. Be prepared with your account number, identifying information, and details about interest rate discounts you found.

Ask the representative for their full name and direct callback number, for your records. Explain that you’d like to discuss interest rate discounts and state your case, based on the discount offer you feel you’re eligible for. For example, if your lender offers a discount after on-time payments, you can say:

“Hi, I’ve made ______ months of consecutive on-time payments toward my student loan. I see that I’m now eligible for a 0.25% rate discount. Can you help me set that up?”

4. See if they’re willing to negotiate other factors

If you’re unable to lower your interest any further, you might be able to make your monthly payments more manageable in other ways. Discuss your repayment options, such as opting for an income-driven repayment plan for federal loans or temporarily pausing your payments for private loans.

Of course, these adjustment are likely to increase the amount you spend on interest charges in the long term. But exploring these alternatives might give you the breathing room your finances need right now.

What to do if you’re unsuccessful

If you’re unable to lower your interest rates to your liking with your current lender, consider refinancing your student loans. Keep in mind that refinancing federal loans into a private student loan means giving up federal protections, such as income-driven repayment plans and student loan forgiveness programs.

Also consider whether enlisting the help of a cosigner on your refinanced loan makes sense for you. By adding someone with excellent credit to your refinancing application, you might qualify for lower rates. However, know that your cosigner is legally responsible for your debt, so if you can’t pay up, they’ll be on the hook.

How to negotiate lower interest rates on your mortgage

The average mortgage rate for a 30-year fixed home loan is about 4% as of May 2019, according to HSH Associates. If you’re an existing homeowner, here’s how to negotiate your current mortgage interest rates.

1. Make sure your credit looks good

Mortgages are risk-based lending, so you’ll need to have an exceptional borrowing profile to successfully negotiate better interest rates.

Raising your credit score before reaching out to your lender can make all the difference in the negotiation. Your payment history on your debt accounts for 35% of your FICO credit score, so make on-time payments regularly.

And while you’re making those payments, avoid adding onto your debt. Your credit utilization ratio factors into 30% of your score. Lowering your other debts may help you position yourself as a good candidate for a lower mortgage rate.

2. Be prepared to give a reason

Before initiating the conversation, compare mortgage loan rates across multiple lenders. It’s wise to have a handful of interest rate quotes from competitors to negotiate the best rate for yourself.

If you currently have a mortgage loan and you’re asking for an interest rate reduction due to a major change — for example, if your income dropped significantly — you’ll want to explain those details to your lender. Your lender may work with you on a manageable payment plan if it means avoiding foreclosure.

3. Make the call

Reach out to your lender directly to negotiate interest rates on your mortgage loan. Make sure to log all of the call details, including the full name of the person you’re speaking to and their direct phone number.

If you’re shopping around for a new mortgage loan, have competitors’ interest rate offers on hand to see if your preferred lender will at least match the lowest rate. If the loan officer is unable to help you, ask to speak with someone with the authority to make a decision on your rate request.

If you’re calling about an existing mortgage loan, let your lender know that you’d like your mortgage rate lowered. Explain your reason — whether you’ve strengthened your credit score since opening the account, for instance, or if you’re experiencing a sudden financial hardship — and let your servicer know outright that you’d prefer not to change your terms aside from your mortgage rate.

Stay persistent if you receive pushback and ask about other mortgage rate reduction options.

4. Ask about loan modification programs

Aside from lowering your mortgage rate, your lender might offer loan modification programs, if your personal situation qualifies. Loan modification programs vary depending on the lender but may include options like extending your loan term or switching you from a variable-rate loan to a fixed-rate loan.

You’ll likely need to provide proof of hardship to be eligible for a loan modification, but this path can help you weather tough financial times.

What to do if you’re unsuccessful

If your lender won’t offer you a mortgage rate reduction outright, you can buy discount points to help lower your interest rate. Discount points are prepaid interest made during closing. You could also negotiate other costs related to the home-buying process, such as lender service fees, loan origination fees, and real estate commissions.

Existing homeowners with a high mortgage rate can look into refinancing. Use a mortgage refinancing calculator to ensure you can handle your monthly payments while keeping the overall cost of the loan as low as possible.

No matter what type of debt you have and where you are financially, there are ways to keep your debt burden low each month. Often, a phone call to your lender is the best way to relieve the overwhelm of high interest rates.

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Author Details

Jennifer Calonia

Jennifer Calonia is a native Los Angeles-based writer and editor with eight years of experience in personal finance. She's passionate about helping others pay off debt, navigate family finance, and use rewards credit cards, responsibly. She's been featured on Forbes, The Huffington Post, Business Insider, Credit Karma, Nerdwallet, and more. To find more information about her work, visit