What you need to know about a Bread loan ?
Bread is a financing platform that allows you to make online purchases with participating retailers and pay for those purchases over time. Bread is not a direct lender though — when you finance a purchase through Bread, you’re actually applying for a short-term installment loan from Cross River Bank.
Fixed monthly payments and rates
If you want to finance an online purchase, a Bread loan may help you budget by splitting the cost into equal monthly payments with a fixed interest rate. This way you’ll know exactly how much you’ll need to pay each month, and you’ll have a set timeline for when the loan will be paid off.
You may prefer that to a credit card, where you only have to make a minimum monthly payment, but you’ll likely pay interest on any outstanding balance and you won’t have a fixed end date for your debt. If you only make the minimum payments on your credit card, it will likely take you longer to pay off debt — and you likely end up paying more in interest, too.
Interest rates are competitive
Bread loans come with competitive interest rates — in some cases, you may be able to get a no-interest loan with Bread. But your interest rate depends on your credit profile and other factors, so you may not be offered the lowest rates if you have rough credit or no credit history.
How it works?
Loan terms will vary depending on the retailer but may range from three months to 36 months.
Interest paid won’t be refunded with a return
While you can return an item you bought with a Bread loan, you won’t get back any of the interest you’ve already paid on it. This can cost you if you wait awhile return your purchase.
Loan payments with a credit card aren’t accepted
You can make payments on a Bread loan with a check, debit card or your bank account. Since you won’t be able to pay with a credit card, you’ll need the cash to pay for your loan every month. That’s not necessarily a bad thing, though, since you may be less likely to be tempted by a purchase you can’t afford.
Check your potential rate before you commit
Check your potential rate before you commit
You can see if you prequalify for a Bread loan and preview possible terms directly on a participating retailer’s website before you decide to make a purchase.
Checking your potential rate won’t hurt your credit scores
Just remember that a preapproval isn’t the same as a final loan approval, and if you formally apply and are approved, your terms could change.
