Suffering From High Interest Rates? How To Negotiate Your Debt Down

Crush your debt woes by negotiating lower interest rates like a pro.

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Updated May 28, 2024
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If credit cards, utilities, and other bills weigh you down, you might end up sinking deeper into debt.

The good news is there are many ways to climb out of debt, and one of them is to negotiate with creditors.

To be successful, however, you need to use the right tools. Here’s how to take control of your debt by finding ways to reduce the cost of it.

Get your credit report

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Knowing where you stand before contacting creditors and renegotiating debt is essential.

You can get a free credit report annually from the three major credit-reporting agencies: Equifax, Experian, and TransUnion. Just visit to get your report.

Once you have the report, look to see if there are any errors. If so, contact the credit-reporting agency to get them corrected. This can help boost your credit score, which may strengthen your hand with creditors now and in the future.

You can move on to the negotiation phase if you find no errors.

Remember why you’re in debt

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There may be a particular reason why you have fallen behind on paying your debt, such as a life event.

Perhaps you lost your job for several months, were dealing with a health issue, got divorced, or had another major life event that has caused your debt to stack up.

Be upfront with your creditors about why you’re in debt, and stick to your reasoning. Writing a short paragraph about why you’re in debt may also be helpful to make it easier to present your case when talking to creditors.

Take notes when you talk to creditors

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As you negotiate, you might make several phone calls and speak with various people who work for your lender, so take notes after each conversation.

Doing so means you will have important details at your fingertips when you need them during future discussions.

Ask for a lower interest rate

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One tactic when negotiating your debt down is to ask your creditor for a lower interest rate.

Credit-reporting agency Equifax notes that if you have a long history of making on-time payments, there's a good chance your creditor will agree to the request.

Renegotiate your payment plan

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Creditors want to get paid back at some point, so they may be willing to negotiate with you regarding when they get their money.

If you're struggling to repay debt, see if you can negotiate a forbearance agreement that allows you to temporarily suspend payments while you get your finances in order.

Another option is a long-term repayment plan that allows you to pay the debt back at a reduced level of interest or possibly at no interest whatsoever.

Suggest a one-time payment

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If the prospect of paying off debt in full looks bleak, ask your creditor if they will accept a one-time payment for less than the total amount owed.

Experian notes that some lenders will agree, knowing it might save them money over waiting a long time for any payment.

Pro tip: Saving a lump sum of money can be difficult, so consider developing a side hustle to earn extra cash that can go toward your one-time payment.

Negotiate within your limits

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Whatever you agree to, make sure you can live up to your end of the bargain. Any agreement you make should be within the limits that you can afford. If you can’t afford your renegotiated plan, creditors are unlikely to be happy with you.

Get agreements in writing

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If you’re able to negotiate your debt lower, make sure you get written proof of your new agreement with your creditors.

A written agreement can help reduce confusion so that you and the lender are on the same page about your new terms.

Move credit card debt to a different card

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It's possible that efforts to negotiate your rate with your current lender won't be successful. If so, it might be time to look at other options.

For example, consider finding a credit card with a balance transfer option and a zero-percent promotional offer. This can buy you some time to pay down your debt without having to pay high levels of interest on the debt.

Consider debt consolidation

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If you have multiple debts with various creditors, it can be difficult to keep track of them. For some people, consolidating debts offers a way to get a better handle on all their different obligations.

With debt consolidation, you combine all your obligations into one payment. Consolidation has the potential to help reduce the interest rate you pay on debt.

Talk to a credit counseling agency

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Trying to handle your debt situation on your own might feel overwhelming. If so, consider reaching out to a professional for assistance.

Find a credit-counseling service that can work with you to get your debt under control. Credit counselors may know some extra tips that you will not think of on your own.

Bottom line

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It’s important to pay down your debt quickly, especially if you have debts with high interest rates. But if you're struggling, options exist for making debt more manageable and boosting your financial fitness.

Once you pay off your obligations, look for new ways to keep debt from recurring, such as cutting back on your spending or increasing your savings as you move forward.

National Debt Relief Benefits

  • No upfront fees1
  • One-on-one evaluation with a debt counseling expert
  • For people with $30,000 in unsecured debts and up

Author Details

Jenny Cohen

Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and