Bank of America is offering short-term small-dollar loans for select clients - Business Insider

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ICYMI: BofA's short-term loans could help it garner favor with financial regulators, which have been pushing banks to provide alternatives to payday lenders

Offered as a program BofA calls "Balance Assistance," the loans will come in increments of $100 up to a maximum of $500 and carry a flat $5 fee. Clients will pay back the loans in three equal installments over the course of 90 days. BofA plans to use data gathered from applicants' checking accounts as well as outside credit information to determine eligibility.

The new offering could be particularly well received among customers affected by the coronavirus pandemic. The ability to get a quick infusion of cash—especially one that only carries a $5 flat fee—is likely more important now than ever. the economy, approximately 40% of US adults said they would struggle to pay for an unexpected $400 expense such as a car repair or a small medical bill, per a survey by the Federal Reserve and cited by American Banker.

Balance Assistance could also help BofA garner favor with financial regulators, which have been pushing banks to provide alternatives to payday lenders.

 

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