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What are some characteristics of a BillFloat loan?

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Quick Answer

BillFloat loans can be a convenient way to borrow money to pay monthly bills. Once approved and released, the funds from a BillFloat loan go directly to a biller. The borrower then typically has 30 days to repay the loan. Interest rates on these loans can be as high as 36 percent, according to SmartAsset.

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Full Answer

One of the major characteristics making a BillFloat loan a better option than a standard payday loan is the interest rate, explains SmartAsset. The maximum rate that a borrower can pay for a BillFloat loan, as of 2015, is 36 percent, a fraction of the 300 to 700 percent that most payday loan lenders can charge.

One drawback of the BillFloat loan is that it is only available for certain accounts. If the biller owed is not one of the companies that partners with BillFloat, it's not an option. However, an estimated 3,500 companies have agreements with BillFloat, reports GetOutOfDebt.org. It is important to note that while more expensive, payday loans can have more flexibility, as the money goes directly to the borrower and not the biller. A BillFloat loan has several attractive characteristics for when options such as a traditional line of credit from a bank or credit union are not available.

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