The current tough economic times has plunged many people into a series of debts that has made it difficult to cope. Bank of America is sending out an offer called a clean sweep. This is a debt consolidation plan which is focused on merging your loans into one. Combining your loans into a single debt can be a good idea if you are looking for a serious way to overcome credit. Once we review the bank’s information, you will be in a position judge whether this is the right plan to consider or not. Bank of America is a full-service bank that offers a wide array of services such as credit cards, savings accounts, checking accounts and mortgage. The bank also offers debt consolidation loans which could be quite challenging, especially if you have a less than stellar credit history. Here are some steps to follow if you are planning to use the bank to merge your loans.
Call Your Creditor
Whenever you are experiencing a financial strain, it is imperative that you call your creditors directly. This is beneficial because you will be informing your creditors of any payments that you are about to miss or the method you are about to use in consolidating your loans. If you opt to use Bank of America as a consolidation company, then you should consider your credit score. You may be interested in getting a reduced interest rate and this is not possible if you do not explain to your bank the reason why you would like to consolidate your debt. Once you have informed your bank, you will know whether they have a financial hardship program that they can give you.
If you have a good credit rating, then considering balance transfer is a perfect option for you. When you transfer your balances, you are moving from a high-interest cap to a lower interest cap, giving you a chance to repay the debt on time and living a debt-free life. Keep in mind that in most cases the balance transfer offers have low-interest rates and you should enquire from your bank if the interest will be adjusted. It is your responsibility to find out how long the interest will be charged on your credit.
What To Avoid
Before you choose to take out a consolidation loan from a banking institution, you should look at your financial status. Compare your income against your expenses to get an idea of how much interest rate you can afford. If you fail to pay your loan on time and are unable to find a plan with your bank, then you may be subject to the collection process. Nobody wants to experience a collection process and you should try as much as possible to avoid it. The process usually follows the following steps:
- Many of your creditors will attempt to call you or send emails in an effort to contact you before they refer the matter to collection offices.
- Your creditors will attempt to use all available ways to collect the debt before they sell the debt to collection agencies.
- The collection agencies will try to make an appointment with you to strategize the right way of handling the debt. Some creditors will pay close attention to your account activities before they pursue any legal action on the matter.
- You should look for a loan that you can manage to avoid the banks and other conventional lending institutions from selling your property to recover the debt.
When looking for a consolidation loan from Bank of America, it is imperative that you consider all the features of the loan before signing the papers. This can be disastrous especially if the interest rate on the loan is variable. You may have to seek help from professional debt relief organization or credit counseling to help you make better financial decisions. Choosing the right strategy is crucial in overcoming debt cycle. With this, you can plan your spending and budget to avoid further financial mistakes that may derail your effort to clear your debts.
Bank of America Credit Counseling and Debt Consolidation
As a borrower, if you decide to enroll in credit counseling from Bank of America, then you will have a debt management plan offered by the bank. Some of the features include:
- A monthly payment of up to 1.98% of current account balance
- A monthly payment not less than $15
Bank of America has set its interest rates for accounts of people seeking credit counseling from it. Your account is set at an interest rate irrespective of the type of account that you are enrolling. Bank of America looks at the financial status of each customer and devise the right plan for the customer. The average interest rate reduction is 9%, however, when you are on a debt management plan, the interest may increase up to 14.9%. If your current interest rate on loans is lower than that offered by the bank, then you should continue with your plan or look for a lender to consolidate your loans. On the other hand, it is easier to choose debt settlement or loan consolidation if you are facing tough financial times.
The bank will negotiate with your creditors for the best rate to consolidate your loans. Based on the audit taken on your account, your lender will calculate an interest rate to suit your needs. While an individual may negotiate settlements from creditors, many people opt to use an experienced company to deal with such activities. It is essential that you find a settlement firm that does not charge you any upfront fees and follows the lending rules and regulations of your state. According to statistics, Bank of America is one of the most aggressive creditors when it comes to legal action against delinquent debtors.The bank waits for nine months before forwarding the list of delinquents for legal action. The firm reviews the amount on your account, state collection laws and the employment history of the borrower before moving on to recollection agencies.
Once you received the money, make it a point to clear all your debts to avoid further complication with your lender. It is also important that you formulate a financial plan that will help you make healthy choices when it comes to your finances and spending. Evaluate your financial position and make a plan on how you can improve your finances. Consider the annual rate percentage of the loan to this will determine the amount of money you will pay in the end. You should negotiate with your lender on the best loan rate that will not only allow you to repay the debt but also live comfortably without affecting your daily routine. Bank loans are complicated and you should be ready to face any challenges that may arise when you choose to merge your loans with Bank of America.