Bank of America Debt Consolidation Program - (2023)

Bank of America Preferred Rewards Tiers

Bank of America Debt Consolidation Loan

The Bank of America Preferred Rewards program offers five levels: Gold, Platinum, Platinum Honors, Diamond and Diamond Honors. Both the benefits members receive and the combined balance needed to qualify increase with each successive tier.

If your balances fall below the Preferred Rewards tier you reached, you will retain the higher tier level for an entire year. After one year plus a three-month grace period, you will be downgraded based on your current balances.

How do credit consolidation companies work?

The term "credit consolidation companies" covers a lot of ground in the debt relief industry. They range from giant national banks to small non-profit consulting agencies, with several stops in between, and offer many forms of .

For simplicity's sake, it's easiest to divide credit consolidation companies into two categories:

  • Those who consolidate debt with a loan based on their credit score
  • Those Who Consolidate Debt With No Loan And Don’t Use Credit Score

Banks, credit unions, online lenders and credit card companies belong to the first group. Do they offer debt consolidation loans orpersonal loansYou pay in monthly installments over a period of 3 to 5 years.

They start by looking at your income, expenses, and credit score to determine how credit worthy you are. Your credit score is the key number in this equation. The higher the better. Anything over 700 and you should be getting an affordable interest rate on your loan. Anything less than that and you'll either pay a much higher interest rate or possibly not qualify for a loan if your score drops below 620.

Companies in the second category that provide without a loan belong to non-profit credit counseling agencies such as InCharge Debt Solutions. InCharge's credit counselors look at your income and expenses, but don't take your credit score into account when evaluating your options.

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A FICO score/credit score is used to represent a person's creditworthiness and can be an indicator of the type of credit they are eligible for. However, the credit rating alone does not guarantee or imply the approval of any financial product.

The Bank of America Premium Rewards credit card is ideal for travel and dining purchases, earning 2 points for every dollar spent. You also earn 1.5 points on all other qualifying purchases and can enjoy travel benefits you won't find with other Bank of America cards, including up to $100 in incidental credits on your airline statement annually.

  • This card charges an annual fee of $95.
  • There are no introductory APR offers on purchases or balance transfers.
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  • This card charges a 3% foreign transaction fee.
  • There is no rewards program for the card, which reduces its long-term value.
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What is a Debt Management Plan?

A good credit counselor will spend time analyzing your specific financial situation and then offer personalized advice to help you manage your money. After this review, a counselor may recommend that you sign up for a debt management plan to help pay off your unsecured debts, such as credit cards, student loans, or medical debt.

But if a credit counselor says a debt management plan is your only option and says there isn't a detailed review of your finances, find a different counselor.

If you and your counselor decide that a debt management plan is best for your situation, it's a good idea to check with all of your creditors. You want to make sure they offer the types of modifications and options your credit counselor outlines for you.

This is how a debt management plan usually works:

  • The counselor develops a payment schedule with you and your creditors. Your creditors may agree to lower your interest rates or waive certain fees.
  • You deposit money each month with the credit counseling organization.
  • The counselor uses your deposits to pay off your unsecured debts like credit card bills, student loans and medical bills as per the payment plan.

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Bank of America Debt Consolidation Program - (1)

  • What we love about this card: Cardholders will earn on a wide variety of travel purchases. Your costs will also be kept lower by waiving an annual fee.
  • Who is this card good for?: travelers who value flexibility and versatility in their travel card. Earn rewards for purchases at art galleries, zoos and campgrounds with this card.
  • Alternatives: The Bank of America Travel Card offers flexibility in terms of what you can redeem for travel, but if flexibility for you means being able to redeem rewards for cash back, you might be better off using theDiscover it® miles.

Don't get lost:Will the credit card companies forgive debt?

Read too:How long does bankruptcy stay on your credit report?

What should I do after declaring bankruptcy?

You should take a debtor education course from a government-approved organization on things like developing a budget, managing money, and using credit wisely. To find a counseling organization, consult the list ofeducation providers for approved debtors. You must present a certificate to the bankruptcy court showing that you have taken the course.

Stay on track after consolidating your debts

Once you've consolidated your debt, it's important to create a monthly budget and keep track of your spending. "Don't add balances to your card again," says Lawler. “But don't close your cards right away either. Find out which route will help you reach your financial goals while building your credit score at the same time.”

If it makes sense to keep the cards open, use them sparingly and try not to have more than 30% of your limit debt on each card.

“Also, if possible, make more than the minimum payment on your loans,” says Lawler. "Even a little more each month can really reduce the amount of interest you'll pay."

Debt can weigh you down, but you can lessen the burden through consolidation. Remember to carefully research your options and calculate the total cost of all options to determine if debt consolidation is right for you.

Also check:Can you buy a house after bankruptcy?

General Reasons to Consolidate Debts

People choose debt consolidation for many reasons, but the most popular ones include:

  • Lower interest rates: Mortgage interest rates are generally lower than other types of debt.
  • Lower monthly rates: By spreading a loan over a longer period of time, you end up paying lower monthly payments.
  • Improve Credit Score – If you have outstanding debts, they are certainly taking a toll on your credit score. A debt consolidation loan is a great way to improve a bad score by paying off expensive loans.

What happens if my debt is old?

How to Pay Off Credit Card Debt with Bank of America (BofA)

Debt usually doesn't go away, but debt collectors have a limited amount of time to process you to collect a debt. This period of time is called a statute of limitations and it typically starts when you fall behind in debt. After the statute of limitations expires, your unpaid debt is considered time-barred. This means that the collector can no longer sue you or threaten to sue you to pay the debt.because it's been so long. It is against the law for a debt collector to sue you for not paying an overdue debt. If you are sued for statute of limitations, tell the judge that the statute of limitations has expired.

The duration of the statute of limitations depends on the type of debt and the law of your state or the state specified in your credit agreement or contract creating the debt.

Under the laws of some states, if you make a payment or even acknowledge in writing that you owe the debt, the debt will no longer lapse. The clock is reset and a new statute of limitations begins.

Also check:What Happens If You Declare Personal Bankruptcy?

Compare offers to find the best loan

When looking for a personal loan, it can be helpful to compare several different offers to find the best interest rate and repayment terms for your needs. With this comparison tool, just answer a few questions and Even Financial will determine the best deals for you. The service is free, secure and does not affect your .

This tool is provided and developed by Even Financial, a search and comparison engine that matches you with third-party lenders. Any information you provide is provided directly to Even Financial and it may use this information in accordance with its ownprivacy policiesyService Terms. By submitting your information, you agree to receive emails from Even. Select does not control and is not responsible for the policies or practices of third parties, nor does Select have access to any data you provide. Select can receive an affiliate commission from partner offers on the Even Financial tool. The commission does not influence the order selection of offers.

Consolidation of Private Student Loans

*Bank of America student finance products are changing due to recent changes in the way student loans are issued. The following is provided for historical reference and describes a program that may have changed.Bank of America Student Centerprovides up-to-date information about BOA student services.

Students who need assistance beyond federal loans and scholarships look to private student loans. The Bank of America Student Program Consolidation Loan offers borrowers the flexibility to convert multiple private education loans into a single consolidation loan. Eligible loans include those used for expenses such as textbooks and computers.

A single consolidated monthly payment offers relief fromhigh interest ratesand reduces administration costs on multiple loans. The minimum consolidation loan is valued at $10,000. Borrowers with 48 consecutive spot payments earn a 0.78% interest rate reduction and an additional 0.25% discount when participants enroll in an automatic cash-out payment program. use theseten tips for paying off student loans.

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What should I do if I'm having trouble paying my mortgage?

Contact your creditor not wait, or a lender may foreclose on your home. Most creditors will work with you if they believe you are acting in good faith and your situation is temporary.

Your lender may be willing to

  • reduce or suspend your payments for a short period of time
  • extend your payment period to reduce your monthly payments

Before agreeing to a new payment plan, find out about any additional fees or other consequences. If you are unable to work out a plan with your lender, contact a non-profit housing counseling organization. Contact a free HUD-certified counselor at 800-569-4287. Also, contact yourlocal office of the Department of Housing and Urban Developmentor the housing authority in your state, city or county. You don't have to pay a private company for these services.

Some companies promise to make changes to your home loan or take other steps to save your home, but they don't. They are scammers. Never prepay a company for promises to help you get mortgage payment relief. learn theSigns of a Mortgage Assistance Scamand how to avoid them.

balance transfer credit card

Bank of America Debt Consolidation Program - (2)

Commonbalance transfer card, you swap your credit card debt for a new credit card with a 0% introductory rate. The purpose of a balance transfer card is to pay off your balance before the introductory rate expires so that you save money on interest. When youcalculate potential economy, be sure to factor in balance transfer fees.

Keep in mind that paying off existing credit card debt with a balance transfer to another credit card is unlikely to lower your credit utilization rate as a debt consolidation loan would.

A debt consolidation loan will also offer higher loan limits, allowing you to pay off more debt, as well as fixed monthly payments, which will make it easier to budget and discipline yourself in paying off debt.

Who is best suited for:Borrowers who can pay off existing debt quickly.

Balance Transfer Credit Card vs. Debt Consolidation Loan:Balance transfer cards are generally the best option for borrowers who have the means to pay off their debt within 18 months, which is a standard 0% APR period. If you need more time to pay off your debt or if you have a lot of debt, a debt consolidation loan is your best option.

Recommended reading:US Debt Watch Organization

How is the rate of my personal loan decided?

When looking for a low-interest loan or credit card, remember that banks are looking for reliable borrowers who make their payments on time. Financial institutions will look at your credit score, income, payment history and, in some cases, cash reserves when deciding which APR to give you.

To be approved for any type of credit product, you will first need to submit an application and agree to allow the lender to withdraw your credit. This helps creditors understand how much debt you have, what your current monthly payments are, and how much additional debt you have the capacity to take on.

After submitting your application, you can be approved for a variety of loan options. Each will have a different period of time to repay the loan and a different interest rate. Your interest rate will be decided based on your credit score, credit history and income, as well as other factors such as loan amount and term. In general, loans with longer terms have higher interest rates than loans that are paid off over a shorter period of time.

selectnow you have a widget where you can put your personal information andbe matched with personal loan offerswithout hurting your credit score.

Apply for a bank loan

After researching quotes from different lenders and finding the right offer for you, you can complete the application process. If approved, you can sign the loan agreement. You will need to provide some personal information and bank account details for debt consolidation loans; it may be possible to provide the lender's information for the lender to send the funds.

Some companies will disburse your loan funds the same day or the next day, while others may take several business days. Typically, you will be provided with an online dashboard where you can view your payment schedule, make payments, and manage your loan.

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Bank of America Debt Relief Plans

Bank of America also works with credit counseling agencies and debt consolidation professionals to help clients negotiate agreements andpay your debtsat an opportune moment. If you can't negotiate a deal directly with the company over the phone, this is probably the next step in the process.

If you're having trouble making your minimum payment each month, the interest rate on your outstanding balances is probably quite high. While every case is different, past Bank of America debt consolidation clients have cut an average of nine percentage points off their old interest rate. If you're paying penalty interest rates of 25% or more, you can save even more than that. Remember, lowering your interest rate by a single percentage point will save you $100 a year.

Lowering the average interest rate on your outstanding balances can help, but it's often not enough. Cutting the annual interest rate on a $20,000 balance from 20% to 10% will save you $2,000 a year, which is no small amount.

Bank of America customers trading asettlement of your outstanding debts, however, you can save many times that. If you complete your settlement process, you can expect to reduce your debt by more than 50% on average. Fill out the free form or call today to connect with a debt settlement professional and get the most out of your Bank of America debt consolidation!

Remove Bofa charges from your credit report

Bank of America: How to Reduce Your Debt | 2022

If Bank of America contacted you about debt you owed and you noticed a negative mark on your credit report, try sending aDebt Validation Letter. The Fair Debt Collection Practices Act protects consumers from abusive and manipulative debt collection tactics. You might feel like you've experienced such tactics with Bank of America. If that's the case, sending a Debt Validation Letter can protect you from further harassment.

When Bank of America contacts you about a debt you owe, you must verify the debt within 5 days of initial contact. You must submit a Debt Validation Letter within 30 days of initial contact, especially if you suspect the debt is fraudulent or time-barred. BofA must validate the debt or stop contacting you after receiving the debt validation request. If BofA continues to try to contact you about the debt without validating it, this is a clear violation of the FDCPA.

Bank of America must include the following information to validate the debt:

To learn more about how to write and send a Debt Validation Letter, watch this video:

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How the 2022 Federal Reserve Rate Hike Affects Debt Consolidation Loans

In an effort to combat rising inflation, the Federal Open Market Committee raised interest rates by three-quarters of a percentage point in June, July, September and November. These rate increases caused interest rates on personal loans to rise.

Most personal loans have fixed rates, which means that borrowers who already have a personal debt consolidation loan need not worry. However, those looking to get a new loan may face higher rates.

If you're in the market for a debt consolidation loan and want to make sure you get the best possible rate, here are some steps you can take:

  • Pre-qualify if possible
  • Check your credit score before applying
  • Apply with a co-lender
  • Search and compare prices


Why is it so hard to consolidate debt? ›

As already discussed, there are three major reasons why people are denied debt consolidation loans. They don't make enough money to keep up with the payments; they have too much debt to get the loan, or their credit score was too low to qualify.

Can I settle debt with Bank of America? ›

You can attempt to negotiate a repayment agreement, consolidate your debt, or settle it. Bank of America itself is known for its wide variety of financial services.

What do you need to qualify for debt consolidation? ›

Debt consolidation qualifications
  1. Proof of income – this is one of the most important debt consolidation qualifications. ...
  2. Credit history – lenders will check your payment history and credit report.
  3. Financial stability – lenders want to know that you're a good financial risk.

How much debt do you need for debt consolidation? ›

There is no set amount of debt you need to have to consolidate because lenders do not have any such requirement. But for the best chance of consolidation success, your debt payments, along with your rent or mortgage payments, should not exceed 50% of your monthly gross income.

What is the downside of consolidation? ›

You may pay a higher rate

Your debt consolidation loan could come at a higher rate than what you currently pay on your debts. This can happen for a variety of reasons, including your current credit score. If it's on the lower end, the risk of default is higher and you'll likely pay more for credit.

Does everyone get approved for debt consolidation? ›

Even with debt consolidation loans for bad credit, approval isn't guaranteed. Lenders typically look at multiple factors when evaluating a loan application.


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