Bank of America Personal Loan Alternatives Review 2021

Personal loans are a perfect option for debt reduction, home improvement finance, or a surprise bill payment. America’s largest bank – Bank of America but does not offer personal loans.

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There are situations in life, like home improvements or planning a wedding, that requires a little extra money. That is Personal loans. They can cover just about any expense without putting up collateral.

If you bank with Bank of America, you may have gone there first looking for a loan only to find that there are no personal loan options available. It’s inconvenient, but it shouldn’t stop you from getting the money you need.

There are plenty of other lenders out there that can work with you.

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.

Bank of America Personal Loan Alternatives

 

You still have options outside of Bank of America if you need a personal loan. Below are three viable alternatives to a personal loan from Bank of America.

We selected these providers based on the variety of loan types offered. If you have fair to excellent credit, you may be able to find a loan to suit your unique needs.

LightStream

LightStream allows you to borrow more than many competitors and its starting APR is among the lowest of all personal loans. They also provide a $100 guarantee that you will be satisfied with your experience.

However, only borrowers with good to excellent credit can qualify.

  • Credit score category: Good, fair
  • Soft credit pull to check rates: Not available
  • Deposit time: As soon as the same day
  • Origination fee: 0%
  • Late fee: None
  • Discounts: 0.50% interest rate reduction for enrolling in autopay
  • Repayment terms: 24 – 144 months

Upgrade

Upgrade is a great option for borrowers with bad or fair credit, as well as those that need smaller loans, as they have a lower minimum loan amount than most lenders. They also base their eligibility more on your free cash flow than other lenders do.

  • Credit score category: Fair, bad
  • Soft credit pull to check rates: Yes
  • Deposit time: As soon as the next day
  • Origination fee: 2.9% – 8%
  • Late fee: $10
  • Repayment terms: 36 or 60 months

LendingClub

LendingClub is a peer-to-peer lender offering loans to those with bad and fair credit. They offer low loan minimums, making them an attractive option for borrowers who need relatively small sums of cash.

  • Credit score category: Fair, bad
  • Soft credit pull to check rates: Yes
  • Deposit time: As soon as 4 business days
  • Origination fee: 2% – 6%
  • Late fee: $15 or 5%
  • Repayment terms: 36 or 60 months

What Loans Bank of America Offers

As one of the biggest U.S. banks, Bank of America has plenty of money to lend to customers. The company offers the following lending services:

Credit Cards

Credit cards are one of the most common types of lending in the United States. The lender gives you a credit limit, which is the maximum amount they are willing to lend you. You can then use the credit card to make purchases when you shop.

Because there is no asset to back up a credit card, interest rates tend to be very high, often exceeding 20%. You should only use a credit card when you know you can pay the bill in full, otherwise, you’ll wind up paying huge interest charges.

Bank of America is one of the largest U.S. credit card issuers — part of the reason is that some of its credit cards are very popular, including its travel and cashback credit cards.

It also offers various credit cards for people that are building credit, including student cards and secured credit cards.

If you were looking for a personal loan for debt consolidation or a major purchase, the BankAmericard is a solid choice because it has a great introductory rate that applies to both balance transfers and purchases.

Mortgages

 

A mortgage is a loan that can be used to purchase land or a house. Mortgages are often the largest loan that a person will ever take out, so the loan can last for up to thirty years.

The two main types of mortgages are fixed-rate and adjustable-rate (ARM) mortgages.

Fixed-rate mortgages have a single interest rate throughout the life of the loan. When you sign the contract, you know the interest rate you’ll be charged today, as well as the interest rate you’ll be charged thirty years from now.

Fixed-rate mortgages offer plenty of stability to home-buyers. Adjustable-rate mortgages allow the lender to change the interest rate every so often. For example, a 5/1 ARM has a fixed rate for the first five years.

After that, the rate can change once every year. The benefit of ARMs is that the initial rate is usually much lower than the rate on a fixed-rate mortgage.

Home Equity Lines of Credit (HELOCs)

HELOCs let you turn some of the equity you’ve built into your home into cash. Much like a credit card, your lender will give you a credit limit, which is the most they’re willing to lend to you.

You can go to the lender and request the cash from your HELOC, which will be deposited into your checking account. Each month you’ll be billed for whatever your HELOC’s balance is, plus interest.

If you haven’t taken money from your HELOC, you won’t be billed. It serves as a line of credit that you have the option of using, but are not obligated to.

HELOC interest rates are closer to mortgage rates than credit card rates because your house serves as collateral. That makes them a good way to consolidate other loans or fund home improvements.

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Auto Loans

Auto loans are loans taken out for the purpose of purchasing a car.

The interest rate varies depending on the cost, make, model year, and whether the car is new or used. If you default on your payments, the bank has the right to repossess your vehicle.

Business Credit Lines

Bank of America offers business credit lines of $10,000 to $100,000. You qualify if you’ve been in business for at least two years and made at least $100,000 in sales last year.

You can use the business credit line to provide liquidity when you need to pay bills or your employees and are waiting on customers to pay you.

Business Term Loans

A business term loan gives you a one-time lump sum of cash which you can pay off over the next one to five years. Qualification requirements are the same as the requirements for a business credit line. These loans are best for making major purchases that will help grow your business.

Secured Business Lines of Credit and Term Loans

If you need a credit line or term loan larger than the maximums offered by Bank of America’s unsecured loans, you can apply for a secured loan. Requirements are stricter: you must have made $250,000 in sales in the last year.

These loans are backed by a lien on your company’s assets so Bank of America has a better chance of getting paid if you default on the loan. These loans are your best bet if your business has significant cash needs.

Equipment Loans

Equipment loans are designed to help you purchase the expensive equipment that you need to run your business.

Whether you need packing machines, conveyor belts, printing presses, or a delivery truck, this loan can help you get your business rolling.

Personal loans can be a necessary tool in handling the expensive parts of life. Bank of America may not offer them, but that doesn’t mean you don’t have options.

No matter if you’re looking to compare lenders easily, are interested in a wider range of loan terms or want to try out p2p lending, a variety of alternative providers can help you get the financing you need.

We hope this article has been helpful to you. Please share it with anyone who you think will appreciate the information!

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