Bank of America Balance Assist Small Loan Review

Balance Assist pros

Balance Assist cons

To apply for Balance Assist, you must have a Bank of America checking account that’s at least one year old, or two and a half years old if you don’t have a credit score. You should also have a positive balance in all Bank of America checking accounts that you own or co-own and a history of regular monthly deposits.

You can apply for a Balance Assist loan through Bank of America’s website or mobile app. Approval is based on your relationship with the bank and credit-based factors. This likely includes your credit score and credit history, though Bank of America doesn’t disclose a minimum credit score requirement for Balance Assist.

You can take out one Balance Assist loan at a time, but you cannot take out more than six Balance Assist loans in a 12-month period.

As part of the application, Bank of America will conduct a hard credit inquiry, which is standard for most loan approvals. This can lower your credit score by a few points and stay on your credit report for about two years.

According to the lender, applicants should have the money in their account within minutes of being approved. If your request is denied, you’ll receive an email within two business days that explains why your application was rejected.

Bank of America Balance Assist loan costs

The Balance Assist loan carries a $5 fee, no matter how much you borrow. This means the annual percentage rate will vary based on the loan amount.

For example, if you borrow the minimum of $100, the loan will carry a 29.76% APR. If you borrow the full $500, it will carry a 5.99% APR.

Balance Assist is a significantly cheaper option than a payday loan, which can carry an average APR of almost 400%. The three-month repayment term is also longer than the two-week repayment term offered by most payday lenders.

There are no fees for paying off your loan early or late fees for missing a payment. The lender also adjusts the overdraft setting on whatever checking account is tied to your Balance Assist loan so you avoid accidental overdraft fees. However, missed payments will be reported to the credit bureaus (Experian, Equifax and TransUnion), which could hurt your credit score.

Loan example: A $400 loan with an APR of 7.5% repaid over three months would carry:

How Bank of America Balance Assist loan compares

Even with a $100 loan, Balance Assist rates don't exceed 36%, which most consumer advocates consider to be the maximum limit for a loan to be affordable.

Several other major banks offer short-term, small-dollar loans to existing clients for a flat fee. For example, U.S. Bank Simple Loans are available in amounts ranging from $100 to $1,000.

Other options for small-dollar loans include personal loans from credit unions, which may be especially affordable for borrowers with fair or bad credit scores. Credit unions tend to offer lower interest rates, flexible terms and more lenient criteria for applicants, and many have a small minimum loan amount. You will need to become a member before applying.

Some online lenders cater specifically to applicants with bad credit or no credit history, but the loans will likely carry a higher APR than Balance Assist. These loan amounts tend to start at $1,000, and many offer same- or next-day funding.

» COMPARE: Best bad-credit online loans

Bank of America Balance Assist isn't a good idea if:

Alternatives to Bank of America Balance Assist

Here are some more alternatives that may be cheaper than Balance Assist.