- Personal Finance
Bank Of America Signature Loans
Bank of America signature loans, like most other signature loans are typically used when you need some money pretty bad. This is because you will typically be charged above market interest rates. In fact many times you will pay more in interest with a signature loan then you will with a credit card. This of course depends on a lot of factors including your credit rating and your employment history.
The reasons for this make sense as all the bank is getting from you is your signature and your supposed good faith. While you may be the best borrower in the history of borrowing the bank has no way to know this aside from your credit report.
In fact due to the nature of a Bank of America signature loan they are also often referred to as good faith loans, character loans, and the most accurate terms like unsecured loan, uncollateralized loan, and non asset backed loans. As you can tell with these types of names signature loans are riskier for the banks and therefore they charge a higher interest rate so that they can make up for the money that they lose on non performing signature and other loans.
Interest Rates For Bank of America
Most of the time you're going to be asked to pay at least 10% on an unsecured loan from this bank. Yes, signature loans are considered to be unsecured because there isn't any collateral to back the loan. If your credit is poor you can expect to pay interest rates that are even higher, possibly as high as 16%.
Why Interest Rates Are High On Signature Loans
If everyone paid their loans off then people could get mad at the rates
they are charged but the sad facts are that a lot of people have more
debt then they should and subsequently they are not able to service
their debt and pay it off on time. If people would start becoming
responsible for their debt then interest rates would drop like a rock
across the board.
Of course this is hoping too much. So when you go to get your Bank of America signature loan what do you need? You will want to know ahead of time what your credit score is and why it is at its current level. If you have been responsible your score will be high and you can rest well knowing that you will likely get a solid loan rate. If on the other hand your score is really low you will want to see if there are any mistakes in the report. This will help you quickly raise your score and pay a lower interest rate.
Another worthwhile tactic is to pay off any small defaulted loans as you can usually squeeze out a few extra points on your credit and since every bit helps you might get a better rate on your Bank of America signature loan. Finally you can get a co-signer who will become responsible for your loan if you default.
Other Loans To Consider First
If you have any type of collateral that can be used, I would highly recommend using it before taking out a signature loan. This will save you a ton of money on interest and obviously that's the name of the game when you're playing with debt. If you can use a car, a home, an insurance policy, or a business as collateral it could save you thousands and will also allow you to borrow more money.
Other Hubs From This Author
Lately a LOT of people who have bad credit have been reading my financial advice. Things financial are a lot easier if you have solid credit. If you don't, I hope that I can help. Getting Bad Credit Bank Loans is a resource that can help you to progress towards getting a loan from a bank - even if your credit isn't perfect.
To get most loans (the exception is student loans) you will need to have a good credit score. I have written a series of articles about credit that help you to understand how this process works. Does Anyone Have A 300 Credit Score talks about how the credit scoring process works and explains why almost no one has a score in the 300 range. How Bad Is A 300 Credit Score teaches you how bad the situation is if you do.
How To Raise Your Credit Score 300 Points teaches you exactly what I did to go from a credit score of under 500 to a score of over 800. Hopefully these credit articles will be helpful to you.
If you're a student, don't get any loans at all until you've looked into Pell grants. They are seriously awesome. Bank of America is a huge lender for home loans and if you're interested in one of those you should take a look at the home mortgage loan requirements. If you can't qualify for a regular loan with Bank of America you might be able to get it secured through the FHA loan program. If you want to find out, take a look at the FHA loan requirements.
If you start to get into some financial trouble, you should most definitely take a look at unsecured debt consolidation loans. They can help you to restructure your credit card debt so that it won't ruin your life.
Lately I've been wondering if B of A offers no credit check personal loans. I looked into it and that's a huge no. They do not have this type of loan and check your credit for everything.