Bank of America is a global powerhouse in the financial industry, catering to individuals, small and middle-market businesses, large corporations, and governments worldwide. With a history of 240 years, Bank of America has evolved into a modern banking institution, offering a comprehensive array of banking, investment management, and risk management products and services. Its diverse product portfolio effectively meets the demands of today's dynamic market. Continuously staying ahead of the competition, Bank of America remains a strong contender for federal credit unions, online lenders, and various lending institutions, boasting a significant market share.
Features of Bank of America Personal Loans
Personal loans have gained popularity among borrowers as they serve as a valuable tool to address urgent financial matters, cover unexpected expenses, and maintain one's dignity without facing judgment from family or the need to divulge financial difficulties to friends. The appeal of these loans lies in the quick decision-making process and affordable monthly payments, along with the flexibility of longer repayment terms extending beyond 12 months, which contributes to their widespread popularity.
Bank of America does not offer traditional unsecured personal loans or secured ones. However, it has one loan, which serves as a mini-personal loan called Balance Assist.
Bank of America Loan Options
As mentioned above, Bank of America does not offer personal loans but provides an expedient solution through its small-dollar loan product, Balance Assist. This small-dollar loan is designed to address immediate financial needs swiftly and can be utilized to finance requirements on the spot. Customers can borrow up to $500 in increments of $100, subject to a flat $5 fee. The loan is repaid over a 90-day period, spread across three equal monthly installments.
To qualify for Balance Assist, you must have a Bank of America checking account that has been open for at least one year. The application process can be completed online, and customers can receive the funds within minutes of approval, as per the lender's claims.
Bank of America joins a growing list of mainstream banks offering short-term loans as viable alternatives to high-interest payday loans. While these loans provide a convenient means for handling emergency expenses, some may carry relatively higher interest rates, with APRs ranging from 5.99% to 29.76%. Nevertheless, customers can swiftly obtain loan approval decisions and have the flexibility to repay the loan within 90 days.
Pros and Cons
- No Credit Score Requirement. For customers without a credit score, having a Bank of America checking account open for 2.5 years qualifies them for the loan, making it more inclusive for individuals who may not have an established credit history.
- Convenience. The small dollar loan offered by Bank of America allows applicants to apply online, providing a quick and easy application process. This convenience saves time and effort for borrowers seeking immediate financial assistance.
- Swift Access to Funds. If approved for the loan, borrowers can gain access to the requested funds within minutes. This fast processing time ensures that individuals can promptly address their financial needs without unnecessary delays.
- Low Fee Structure. With a minimal $5 fee for borrowing up to $500, this loan offers a cost-effective option for those requiring a smaller amount of money. The low fee structure helps borrowers manage their expenses efficiently.
- Manageable Repayment Terms. The loan's repayment structure is designed for ease, requiring borrowers to pay back the borrowed amount and the $5 fee in three equal monthly installments. This approach ensures manageable repayment terms that align with the borrower's budget and financial capabilities.
- Limited Loan Amount. The loan is capped at a maximum of $500, which may not be sufficient to cover larger financial needs or emergencies requiring more money.
- Existing Bank of America Client Required. To be eligible for the loan, borrowers must already be clients of Bank of America with a checking account. This requirement restricts access for individuals who are not current customers of the bank.
- Positive Checking Account Balance Necessary. Applicants must have positive balances in all of their Bank of America checking accounts. This may pose challenges for those facing financial difficulties or negative account balances.
- Limit on Frequency of Loan Application. The loan cannot be applied for on a regular basis, as applicants must not have opened six Balance Assist loans in the last 12 months. This limitation may hinder borrowers who require ongoing financial assistance.
- Loan Repayment with Interest. Like any loan, the Small Dollar loan must be repaid with interest. Borrowers should carefully consider the interest costs and ensure they can meet the repayment obligations.
- Temporary Solution. The Small Dollar loan is intended as a temporary solution to address immediate financial problems. It may not be suitable for long-term financial challenges or larger-scale funding needs. Borrowers should explore other alternatives for more significant financial requirements.
How to Apply for a Bank of America Balance Assist loan?
To apply for a Bank of America Balance Assist loan, simply access their user-friendly online platform or Mobile Banking app. If you are an existing customer, log in to your account; if not, sign up and create an account with the bank. Select "Balance Assist." Before proceeding, ensure you meet the eligibility criteria, typically involving a one-year minimum checking account history with Bank of America and a stable source of income. Begin the application process by providing the required personal information, financial details, and income verification. Review the information for accuracy and completeness before submitting the application electronically. The bank will then review your application and inform you of its decision through the online banking platform or other communication methods. Remember that loan availability and terms may vary, so it's best to check the most current information on the Bank of America website or contact their customer service for up-to-date details on applying for the Balance Assist loan.
Best places to borrow a loan with bad credit
Upgrade
Upgrade is a prominent online lender that offers personal loans to borrowers with bad credit. They provide loan amounts ranging from $1,000 to $50,000, making them suitable for various financial needs. The minimum credit score required by Upgrade is relatively low, typically around 580. This makes it accessible to individuals with a less-than-stellar credit history. One notable advantage of Upgrade is its flexible repayment terms, which can extend up to five years. This longer repayment period allows borrowers to manage their monthly payments more effectively. However, it's worth noting that Upgrade charges origination fees ranging from 2.9% to 8%. Additionally, while they do not have any prepayment penalties, borrowers should be aware of the interest rates, which can be relatively high for individuals with bad credit.
Upstart
Upstart is another online lender that specializes in providing loans to borrowers with bad credit. Their loan amounts range from $1,000 to $50,000, allowing borrowers to access the funds they need for various purposes. Upstart utilizes a unique underwriting model that takes into account factors beyond just credit scores, making it more inclusive for individuals with limited credit history or low credit scores. The minimum credit score required by Upstart is typically around 580. One of the significant advantages of Upstart is its soft credit check, which means that applying for a loan does not negatively impact your credit score. Repayment terms offered by Upstart range from three to five years, providing borrowers with flexibility. While they do charge origination fees of up to 8%, it's important to note that they don't impose any prepayment penalties. However, borrowers with bad credit should expect higher interest rates.
LendingPoint
LendingPoint is a bad credit lender that offers personal loans ranging from $2,000 to $36,500. They consider borrowers with credit scores as low as 585, making them accessible to individuals with bad credit. LendingPoint prides itself on providing fast funding, often disbursing funds within one business day. Their repayment terms typically range from two to four years, allowing borrowers to tailor their loan duration according to their needs. It's important to note that LendingPoint does charge origination fees that can be up to 6%. They also have a slightly higher interest rate compared to traditional lenders, which is to be expected when borrowing with bad credit. However, they do not impose any prepayment penalties, enabling borrowers to pay off their loans early if they desire.
Universal Credit
Universal Credit is an online lender that specializes in bad credit loans, offering loan amounts ranging from $500 to $15,000. Their minimum credit score requirement is relatively low, typically around 550, making them accessible to borrowers with poor credit. Universal Credit offers repayment terms ranging from six months to five years, allowing borrowers to choose a duration that aligns with their financial situation. While they charge origination fees, the amount may vary based on the borrower's creditworthiness. One notable advantage of Universal Credit is its willingness to consider applicants who have previously filed for bankruptcy. However, borrowers should be aware that the interest rates associated with bad credit loans from Universal Credit may be higher compared to traditional lenders.
OneMain Financial
OneMain Financial is a well-established lender that specializes in bad credit loans. They offer loan amounts ranging from $1,500 to $20,000, making them suitable for various financial needs. OneMain Financial requires a minimum credit score of 600, slightly higher than some of the other lenders in this category. However, they have a reputation for considering other factors beyond credit scores when evaluating loan applications. OneMain Financial provides repayment terms that range from two to five years, allowing borrowers to select a term that fits their budget. It's important to note that OneMain Financial charges origination fees, which can vary depending on your residence state. While they do not disclose their interest rates upfront, borrowers with bad credit should expect higher rates.
Avant
Avant is an online lender that specializes in offering personal loans to individuals with bad credit. They provide loan amounts ranging from $2,000 to $35,000, catering to various financial needs. Avant has a minimum credit score requirement of 580, making them accessible to borrowers with less-than-ideal credit histories. Repayment terms offered by Avant typically range from two to five years, giving borrowers flexibility in managing their monthly payments. While Avant charges origination fees up to 4.75%, they do not impose any prepayment penalties. It's important to note that Avant's interest rates can be relatively high for borrowers with bad credit. However, they provide a transparent prequalification process that allows borrowers to check their potential loan offers without affecting their credit scores.
Requirements
To be eligible for a Balance Assist loan offered by Bank of America, applicants must meet specific requirements:
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Borrowers must be at least 18 years old to be eligible for loans.
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The applicants must have a Bank of America checking account open for at least one year (or 2.5 years if they don't have a credit score) and currently have a qualified Bank of America checking account (please note that a SafeBalance account does not qualify).
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The applicants must maintain a positive balance in all their Bank of America checking accounts and make regular monthly deposits.
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The applicants should not currently have an open Balance Assist loan and must not have opened six Balance Assist loans in the last 12 months.
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Positive credit history. Credit-based factors will also be considered, and Bank of America will conduct a credit check as part of the approval process for the Balance Assist loan.
It is essential that applicants be residents of the United States or U.S. Territories and have a U.S. address on file to be eligible.
Ways to Receive the Money
Customers can physically access the money from a Balance Assist loan offered by Bank of America by transferring the loan amount directly to their eligible Bank of America checking account. Once the loan is approved, the funds are deposited into the designated checking account, making them available for immediate use through various means, such as withdrawing cash from an ATM, making purchases with a debit card, writing checks, or transferring funds to another account.
How to Pay Off Balance Assist Loan?
Customers can follow these steps to pay off a Balance Assist loan to Bank of America.
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Review Loan Details. First, borrowers should review the loan agreement to confirm the outstanding loan balance, the interest rate, and the repayment schedule.
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Choose a Payment Method. Customers can pay for their Balance Assist loan through various methods, such as online banking, the Bank of America Mobile Banking app, or visiting a local branch.
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Online Payment. For online payments, customers can log in to their Bank of America account, navigate to the loan section, and select the option to make a payment. They can then choose the payment amount and the source of funds.
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Mobile App Payment. Customers can access the loan account and make payments conveniently using the Bank of America Mobile Banking app using their mobile devices.
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In-Person Payment. Customers who prefer to make payments in person can visit a Bank of America branch and make a payment through a bank teller.
Things to Consider
When considering a Balance Assist loan from Bank of America, there are several specific factors to take into account:
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Loan Amount and Fee. The loan amount is capped at a maximum of $500, and there is a $5 fee for opening the loan. It's essential to assess whether this loan amount meets your financial needs and whether the fee is reasonable based on the loan duration.
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Repayment Terms. The Balance Assist loan requires repayment over a 90-day period, with three equal monthly installments. Consider if this repayment schedule aligns with your budget and financial capabilities.
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APR and Interest Costs. Although there are no other interest or finance charges besides the $5 fee, the effective Annual Percentage Rate (APR) for this fee can vary from 5.99% to 29.76%, depending on the amount borrowed. Carefully evaluate the total repayment cost to determine if it fits within your financial plans.
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Eligibility Requirements. Ensure that you meet all the eligibility criteria for the loan, such as having a Bank of America checking account open for at least 1 year (or 2.5 years if you don't have a credit score), maintaining positive balances in all your Bank of America checking accounts, and not having an open Balance Assist loan or having opened six Balance Assist loans in the last 12 months.
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Temporary Solution. Recognize that the Balance Assist loan is intended as a short-term solution for immediate financial needs. Assess if this loan fits your current financial situation and if it aligns with your long-term financial goals.
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Alternative Options. Explore other loan products or financial assistance options offered by Bank of America or other lenders to determine if there are better-suited alternatives for your specific needs.
Alternatives
Navy Federal Credit Union
Bank of America personal loan alternatives can be found with many other lenders offering personal loans, such as credit unions like Navy Federal Credit Union. A loan from Navy Federal offers a versatile solution for various financial needs. Navy Federal presents multiple options, whether you aim to consolidate debt, embark on home improvements, or handle unexpected expenses. With products like Personal Expense Loans, borrowers can find tailored solutions that suit their requirements.
Prosper
Prosper is a peer-to-peer online lending platform that provides personal loans to borrowers based on their creditworthiness and financial profile. Borrowers can apply for loans for home renovation, weddings, and paying off credit card debt.
SoFi
SoFi is an online lender that offers personal loans with competitive interest rates. They cater to borrowers with good credit scores and provide various loan options, including debt consolidation, home improvement, and moving expenses.
Avant
Avant is an online lender that focuses on providing personal loans to borrowers with fair to good credit scores. They offer loans for purposes like consolidating debt, covering medical expenses, and financing major purchases.
Editorial Opinion
The Balance Assist loan from Bank of America offers a unique and convenient solution for borrowers seeking quick access to small funds to address immediate financial needs. While it may not fall under the category of conventional personal loans due to its capped credit limit of $500, it is a reliable option for those requiring a temporary financial boost. As an unsecured personal loan, it doesn't require collateral, making it accessible to a broader range of customers. The loan terms, with a 90-day repayment period in three equal monthly installments, provide borrowers with manageable repayment options. However, applicants must consider the APR and interest costs associated with the $5 fee. Compared to traditional personal loan providers, this loan's APR can range from 5.99% to 29.76%, depending on the borrowed amount, which may affect the overall affordability. Despite its limitations, the Balance Assist loan aligns well with Bank of America's commitment to offering flexible financial solutions to its customers. For those seeking a small, short-term loan without extensive paperwork or collateral, the Balance Assist loan is a practical option among various financial institutions. However, individuals should weigh their financial circumstances and explore alternative options before deciding.
Important
How to Choose a Lender
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Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.
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Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.
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Carefully review all the terms and conditions of your payday loan contract.
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Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.
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Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.
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Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.
Additional Resources
- What Credit Score Do You Need for a Personal Loan?
- How to Get a Personal Loan in 7 Steps
- Personal Loan Pre-Approval
- How to Apply for a Personal Loan
- Personal Loan vs Personal Line of Credit