by Aidan Kang, CFA
Senior Writer
UPDATED: February 09, 2023

Did you want a higher loan amount than what you were granted by the bank? The good news is that if you're skilled at negotiations, you can try to work out a greater loan amount.

There are many ways to increase the loan amount you can get from a bank or other financial institution. Follow these tips to help you acquire the funds you need.

Be honest with the lender about why you need the money.

Always be honest with your lender about your financial position. Your situation may be legitimate, but if the lender sees it as temporary, they'll be less willing to lend you money. Make sure your justifications make sense and your reasons don't pertain to your inability to pay.

If it's a loan renewal, it's essential to communicate with your lender if you're having problems keeping up with previous payments on loans or credit cards you already have. If that’s the case, they may be able to assist you in consolidating or restructuring your debt.

Look into alternative loan options and compare rates and terms.

The difference in interest rates offered by different lenders, even by a fraction of a percentage point, can have significant financial consequences. The total amount you will pay for a loan is reduced when the interest rate is lower. Simply said, if you have a high credit score and a reliable source of income, you are in a better position to negotiate favorable terms due to the intense competition among lenders.

Speaking with people who have previously taken out loans helps you understand the different options available. You may also check out online resources like CreditNinja to learn more about loan terms and interest rates. That information will be helpful when you consider how much money to borrow and what kind of loan would be best for your needs.

Get a co-signer.

Find a co-signer with a higher credit score if the lender is reluctant to extend the loan amount because of your credit standing. It will lower the lender's perceived risk in lending you money, making it more likely that they will approve your request for a bigger loan.

The co-signer guarantees that the loan will be repaid if the principal borrower fails to do so. A co-signer is required in loan applications when the primary applicant doesn't have a good credit history, reliability, or income to qualify for the loan on their own. 

Clarify where you can use the money.

Lenders consider the loan's intended purpose when deciding whether or not to extend credit, the interest rate offered, and other terms of the loan.

Explain the significance of this loan. Do you have anything you need to buy or a specific target you want to achieve? Speculate as to how this loan will get you there if so. You must ensure that your plan is feasible and won't leave you deeply in debt for a long time.

Although a private loan can be helpful for celebratory occasions like weddings and paying off high-interest credit card debt, it's frequently best used for less fortunate situations like paying for unexpected medical bills or house repairs.

Prepare collateral.

Preparing some form of collateral to help secure a loan is a good idea if you're hoping to borrow a large sum. In addition, if you have valuable collateral to put up as security for a loan, you may get a better interest rate on the money you borrow. 

However, if you fail to repay the collateral loan as arranged, you risk losing the collateralized items. Lenders' risk of default is mitigated by collateral. If the borrower fails to repay the loan, the lender can take possession of the collateral and sell it to recover their losses. But while the property is the most popular collateral, other options include savings accounts, equities, and bonds.

Prove your financial stability with a higher credit limit.

A greater credit limit and a lower credit utilization ratio are both factors that can improve a person's credit score. A higher credit score makes you more attractive to potential lenders, who will therefore extend to you more favorable terms and interest rates.

To achieve this, you must generally exhibit that you are creditworthy, either by having a history of on-time loan repayment or demonstrating that your income and assets are sufficient to cover the loan and your monthly costs.


It's not always easy to negotiate a larger loan amount with a lending institution, but it's never impossible, either. To handle the conversation effectively, all you need is the appropriate approach and some tried and true strategies like the ones we have mentioned here.