Does Bank of America Provide Personal Loans?

A personal loan is also known as an "unsecured" loan, which means no collateral is provided upfront by the borrower. If borrowers are able to meet certain criteria, Bank of America does have the ability to provide personal loans. Read further for more information about personal loans and what Bank of America can do for you.

Identification

In a personal loan, nothing of value is put up by the borrower as collateral in the event that the borrower is unable to repay the loan. As a result, the person borrowing the money assumes less risk: In the event of a loan default, the he loses nothing but his credit rating.

Types

Unsecured loans come in three types. Personal unsecured loans are given to individuals for their own use and purposes. Unsecured business loans, on the other hand, are given to companies and corporations, and these business entities responsible for the repayment of the debt. Finally, unsecured business loans with a personal guarantee are given to a business or company. The company is responsible for repaying the loan, but in the event it is unable to honor the debt, the guarantor is responsible.

Considerations

Unsecured loans contain considerable risk for the lending institution because there is no collateral for the bank to receive in the event that the loan is defaulted upon. As a result, they can be more difficult to get, carry higher interest rates, and have lower limits, often only going up to $5,000. Many banks, including Bank of America, will check an individual's credit score to get an idea of his ability to pay back the loan.

Considerations

Bank of America offers many different personal and unsecured loans. Sometimes these loans come in the form of education loans, which are used to be for college tuition and other expenses. Some do not have to be paid back until the individual is finished with school. Other types of personal loans can be for debt consolidation. In this case, Bank of America loans an individual money to pay off credit card and other high interest debts in an effort to consolidate the money they owe to one source.

Warning

Personal loans from Bank of America can be complicated to get. In order to grant a debt consolidation loan, Bank of America looks at many things, including your credit history and your likelihood of getting into debt again. Previous credit trouble or bankruptcy in your past can make this sort of loan very difficult to get. In addition, Bank of America may not recommend a personal loan if you are likely to incur additional fines or penalties for altering your payment schedule.