Bank of America Personal Loans: Top Alternatives to Consider.
Bank of America Personal Loans: Did you know that Bank of America, unlike most other influential banks, does not support nor even offer unsecured personal loans? Yes, that’s the truth, though you still have the privilege to lend from other top firms, including, banks, credit, and online lenders.
Bank of America is one of the largest financial service providers in the United States (U.S), with operations in all 50 states that serve more than 67 million consumer and small business customers. But despite its otherwise diverse offerings, Bank of America’s personal loans don’t exist. Bank of America’s wide array of financial products includes credit cards, savings accounts, checking accounts, home equity lines of credit, and small business loans.
It also offers home and auto loans to buy a house or vehicle. But you’ll have to turn elsewhere for your personal loan needs. Personal loans are a versatile and powerful financial tool you can use for debt consolidation, big-purchase financing, home improvements, or just eliminating pesky credit card debt. This Bank of America personal loan review will help you understand the financial products the bank does offer, as well as help you to find alternative online lenders, so you can borrow money at reasonable terms.
Why Doesn’t Bank of America Offer Personal Loans?
Bank of America is one of many banks that chooses not to offer personal loans. Instead, it focuses on mortgages, auto loans, and credit cards. Why? With mortgages and car loans, the property acts as collateral to secure the loan, which makes the loans much less risky than unsecured personal loans.
If a borrower defaults, Bank of America collects the property to help pay back the loan. And with credit cards, the interest rate is much higher than personal loans, making it much more profitable — even if the risk of default is the same.
Types of Loans Offered by Bank of America
Although Bank of America doesn’t offer personal loans, it does offer other types of loans, including:
Mortgages: Mortgages are loans used to purchase homes. The house you buy will serve as collateral for the loan, and the interest you pay should be tax deductible up to federal limits. Interest rates on mortgages are usually well below the rates charged by personal loans because the debt on a mortgage is secured.
Home refinance loans: Bank of America offers to refinance loans to borrowers with existing mortgages, so they can pay back their current lender. Refinancing your mortgage could allow you to obtain a lower rate and reduce your monthly payments or change other home loan terms, such as your repayment timeline.
Home equity lines of credit: When you want to borrow against the equity in your home, Bank of America has you covered. A home equity line of credit can allow you to tap into the equity you’ve built in your property for home improvements or other purchases. This allows you to secure a flexible amount of monthly funding rather than one lump sum. You’ll likely receive much lower rates than those imposed on credit cards, but you may receive a variable APR rather than a fixed rate.
Auto loans: Car loans are also secured loans, but the car acts as collateral instead of your house. The interest rate on a car loan is usually lower than the rate on a personal loan because the loan is secured.
If you were hoping to borrow for a home or a car, or if you have equity in your home you can tap into, you could seek a Bank of America personal line of credit instead of looking elsewhere to find a personal loan lender.
If a personal loan is what you need, consider borrowing from another lender. You might borrow from a different bank, an online lender, or a credit union. When borrowing a personal loan, you might have the option to choose between a fixed or variable interest rate. Fixed rates stay the same for the duration of the loan. Variable rates can fluctuate over time. Although you might receive a lower variable interest rate at the start, it can increase during repayment.
For simplicity, we’ll identify competitive fixed interest rates from lenders. Here are our recommendations for Bank of America’s personal loan alternatives. You’ll see some of the lowest personal loan interest rates with these lenders.
1. Wells Fargo & Co. (WFC)
Wells Fargo offers loans from $3,000 to $100,000, with no origination or prepayment fees. It’s quick to make decisions–often approving loan applications in as little as 15 minutes. Rates hover between 7% and 8% for those with excellent credit.
2. Toronto-Dominion Bank (TD)
TD Bank’s loans range from $2,000 to $50,000. You can either lock in monthly payments with a traditional unsecured personal loan, acquire a personal unsecured line of credit, or pledge collateral with a secured loan. Each of these options carries different terms, but for the regular unsecured personal loan, expect an interest rate just under 10%.
3. Citigroup Inc. (C)
Citi takes a members-only approach to grant personal loans. Applicants must hold either “at least one month of tenure” on a deposit account with the bank, a linked Citi mortgage, or a Citi credit card.
You’ll also need at least $10,500 in annual income. If approved, you’ll receive your check in the mail within five business days. Citi’s loan start at $2,000 and go up to $50,000, with rates ranging from 7.99% to 17.99% on a $10,000 loan.
4. U.S. Bank (USB)
Also a members-only bank, U.S. Bank offers personal loans and lines of credit. You can get a loan from $3,000 to $25,000 with an interest rate as low as 8.99%.
If using your loan to make energy-efficient improvements on your home, you may qualify for a lower rate. There are no annual fees or collateral requirements, however, the loan will have an origination fee of approximately $50. You can apply online if you’ve been a customer for more than 120 days.
5. PNC Financial Services Group Inc. (PNC)
The seventh-largest bank in the United States in terms of total assets, PNC offers personal loans of $1,000 to $100,000, depending on the loan type. Like other banks, PNC offers fixed amount loans or lines of credit – either secured or unsecured. Rates are as low as 5.99% depending on the size of the loan.
6. SunTrust Banks, Inc. (STI)
SunTrust owns LightStream, a lender that makes loans for “practically anything,” according to its marketing materials. LightStream operates solely online but offers comparatively lower rates than other banks.
If you’re refinancing a car and have excellent credit, your rate could be as low as 3.99%, depending on the size and length of the loan. You can apply and receive the money the same day, and if your loan experience isn’t easy and convenient LightStream will give you $100.