Debt consolidation from Bank of America.
You can receive help with consolidating your debts from a loan program as well as consolidation services offered by Bank of America. The resources from BofA vary and change, with different consolidation products offered to low-income borrowers or those with bad credit. Learn more on debt consolidation loans from Bank of America below as well as how to apply.
There are different resources offered. Bank of America has what is called a Clean Sweep program and they offer other options as well, such as debt consolidation loans. Find information on this program, as well as others, from Bank of America and learn how it can provide you with options to consolidate debt, including credit cards, at what will probably be a lower interest rate.
Bank of America is offering a debt consolidation loan to customers as an effective way to improve their financial condition. It can help clients get out of debt, whether credit card, auto loans or medical debt, with one predictable, consolidated monthly payment. Overall there are both some pros and cons to this offer. Here is a fairly quick summary of BofA debt consolidation loan product, but as noted each application is assessed on a one-off basis.
Bank of America debt consolidation pros
One of the pros is that the interest rate on your BofA credit cards can be reduced to as low as 6% or so, with the exact rate based on the amount due, the applicant income and credit score. This rate is much lower than most people currently pay on their credit card accounts and other loans that they may currently have outstanding. However, a con is the interest rate is a variable APR and this is expanded upon below.
They will generally charge you a 3% transaction fee each time you need an advance. So if you take out only one advance, and you also have the lower 6 or 8% interest rate, this will still benefit you as that 3% fee will be a one time fee. So while there is a cost involved, the lower monthly interest expenses can often make it worthwhile. However, you can’t take out multiple advances with a BofA loan, as that fee is too high to keep paying it. And if you do not qualify for a competitive interest rate, than the 3% fee may be too much to pay.
Some additional pros of this option from BofA include there is no collateral needed for this loan, so you are not mortgaging your home, business or personal possessions. This makes it an unsecured Bank of America debt consolidation loan. This will somewhat reduce your risk. This product is probably a better option than going thru a debt settlement company or related program as you are dealing directly with BofA rather than relying upon a third party. Explore other options to get out of debt.
You can prepay the consolidation loan, with no additional fees needing to be paid. Another added benefit of the debt consolidation loan is that you are building a re-accessible cash reserve as you pay down the balance. No annual fee is due, and you can get a decision within 15 minutes of applying.
Another pro of the Bank of America Clean Sweep or their other programs is that you can take out a debt consolidation loan for as much as $25,000 and it can be deposited directly into your checking account. This amount is great enough so it should go a long way towards paying off your debts.
Maybe the biggest reason is that the payments for that interest rate of a BofA personal loan for consolidating debts tend to be much lower than other consumer loans. Such a low rate can go a long way towards helping you eliminate debt and pay off your bills. An 8% interest rate, even after adding in a one time 3% transaction fee, is much lower than typical credit card rates of 15-20%.
You may be able to negotiate with Bank of America to get debt help, or even try asking for a credit card hardship program instead of using this Clean Sweep or other consolidation program. Almost everything is open to negotiation. Some sometimes there are better options than a loan to consolidate debts and people really need to explore all of their options. Find more about using credit card hardship programs for relief.
Cons to the BofA debt consolidation program
If you use this debt consolidation loan, you can’t miss a payment or else there will be an impact to the amount of monthly payment that is due. If you miss just two payments over a 12 month period of time then BofA reserves the right to increase your interest rate to up to 28%. That rate can be crippling so you need to ensure you stay on track with payments. There will also generally be an impact to the borrowers credit scores.
A con is that after every debt consolidating loan you take from Bank of America, they will restart your payment term again, and it can be as long as 72 months. Once again, this is not too much of a negative if you only take an advance once. But you need to be disciplined and can’t take out multiple loans.
The interest rate to a BofA loan is usually variable, and depending on the future direction of interest rates and a borrowers creditworthiness, the interest rate can go as high 25% over an extended period of time. Also customers with poor credit histories or low scores will often have a higher initial APR rate. So since the rate can change on the upside, it can hinder your ability to predict future payment amounts.
How to apply for Bank of America programs for consolidation debts
For more information on Clean Sweep or other debt consolidation loans from Bank of America, the customer service team can answer all questions. Note the program may no longer be offered but other assistance can also be explored. Or they can help the customer apply for a program. Call (800) 500-5306 for information.
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