About Bank of America Personal Loans

Personal loans are also known as unsecured loans. Bank of America has the ability to offer these types of loans should individuals meet certain qualifications. Read on to find out more about the options for getting a personal loan from this bank.

Identification

Personal loans are a type of unsecured loan. This means that there is no collateral or anything of value that can be repossessed in the event that the loan cannot be repaid. As a result, the person borrowing the money assumes less risk.

Types

There are three types of unsecured loans. A personal unsecured loan is one that the borrower as a person is required to pay back. The second is an unsecured business loan, in which the business it is loaned to is required to pay back the money. Finally, there are unsecured business loans with a personal guarantee, which means that a business is initially responsible for the loan but as a last resort an individual may honor the loan.

Features

Because unsecured loans have no collateral, they are considered to be more beneficial for the borrower but more risky for the lending institution. As a result, they are harder to get, since if an individual defaults on the loan, there is nothing of value for the business to seize. Many banks, including Bank of America, will want to check an individual's credit score to get an idea of an individual's ability to pay back the loan.

Considerations

Bank of America offers many different unsecured loans. Some, for example, are given out to help consolidate other kinds of debts, such as credit cards and other high-interest loans. The goal of this type of personal loan is to combine different debts into one more manageable debt with a lower interest rate. Other unsecured loans can be obtained for financing such expenses as education.

Warning

Because personal loans are riskier for a lending institution, they may involve a higher rate of interest and lower limits on the line of credit than other, secured loans. Also, Bank of America may not offer debt consolidation loans if you are deemed likely to get into debt trouble again. Additionally, in some cases you may incur various penalties and fines from attempting to consolidate debts with a personal loan from Bank of America.