While Bank of America Signature Loans are similar to any other type of signature loan, they do at least have the benefit of coming from a reputable institution. Believe it or not, this is something borrowers need to seriously consider when applying for a signature loan. When comparing Bank of America Signature loans to other institutions that aren’t so reputable, there may be some extreme differences.

What is a Signature Loan?

A signature loan is a loan that requires no security and is based primarily on the borrower’s credit. These types of loans tend to carry high interest rates due to the risk lenders face when agreeing to loan the money out with no security.

The fact is that signature loans carry such high interest rates; they can be even more expensive than a credit card! For this reason, they are usually only used when there is some type of emergency and every other financial option has been exhausted.

What is Required to Qualify for a Signature Loan?

Generally, those that successfully obtain a signature loan have a good credit history. However, it is possible to obtain a signature loan with bad credit as well. Those with good credit are already going to be paying high interest rates. This means that those with bad credit can expect to pay interest rates that may be shocking and can even run up to 300%! That’s a lot of interest and should seriously be considered before committing to such loans.

At a minimum, borrowers will be expected to show some type of photo identification and proof of social security number to qualify for these loans. Generally employment verification is needed as well for any type of loan, but most especially a signature loan where there is no collateral involved.

What Makes Bank of America Signature Loans so Great?

Lenders who are just starting out need to make the most they can to continue lending. How do they make money? The money is derived from charging and in some cases over charging customers who borrow from them. After all, they have to make the money to lend to other customers.

Bank of America is a well established bank. They not only provide signature loans, but credit cards and a wide variety of other financial services. Since they do have a secure reputation and are well established, Bank of America is able to offer signature loans at a fraction of the interest rates that can be found with lenders who don’t have such a well established reputation. In fact, Bank of America offers signature loans with interest rates as low as 10%. That’s less than some credit card interest rates.

Keep in mind when ever you borrow money that the amount you borrow is not the amount you pay back. The goal when obtaining any type of loan is to make the balance as close to the amount borrowed as you can get. Keeping this in mind when looking for a lender is always a smart move.