Clean Sweep MBNA Debt Consolidation

MBNA's Clean Sweep Debt Consolidation program may help people pay off credit card debt.

With personal debt at an all time high after the start of the 2008 recession, methods to reduce or consolidate debt abound. One such program is the MBNA Clean Sweep loan (now a subsidiary of Bank of America), which promises that those owing up to $50,000 can soon become debt-free.

Provisions

According to MBNA, participants are guaranteed a loan for up to $50,000. This loan can then be used to pay off high interest credit cards or for any other purpose, and the signee can determine the length of loan repayment. Interest rates can vary from as little as 8.99 percent up to 21.99 percent depending on the applicant's credit worthiness.

Possible Problems

While at first glance this program appears to be a useful tool in debt reduction, further study notes some possible problems. These include a 3 percent transaction fee and a variable interest rate based on the prime rate that can be changed month to month.

Reviews

According to debt coach Steve Rhode, the terms of this program may keep people in debt even longer, especially when one looks at penalties for late or partial payments. In addition, Insurance Salesman.com suggests that prospective clients avoid this program for many of the same reasons as others have suggested.

References

• Insurance Salesman.com: A Review of Bank of America Clean Sweep Debt Consolidation Plan
• Get Out of Debt.org: Bank of America Offers "Clean Sweep" Debt Consolidation Loan Up to $50,000. Let's Look at The Facts And See Who Is Really Cleaning Up