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Is the First Solution Loan Program from First National Bank of Omaha a Good Idea?

“Dear Steve,

I am trying to get out of debt and at the sametime trying to figure out what will be a better way.

I have about $9.9k in credit cards debt, 2 car loans (~$19k) and a personal loan with $4200 left. I am making all my payments on time and always paying my cards more than the minimum, most of the times 3-4 times more on some cards. My credit score is about 689 at the moment and never had any issues getting any credits approved. Also never had any late payments, late bills or any collections.

My question will be – is it worth to get a $15K Solution Loan and pay all my CC and the personal loan. I tried the Prosper and they denied it (most likely) because of the amount of debt owed. Now I just got an offer from First National Bank of Omaha – First Solution loan program (are you familiar with this bank and any business they do?). They are offering a credit line between $5-25k at 7.99-14.99 APR. So I was thinking if I take $15k for 48 Months ($380) a month that may get me out of the many CC debt situation.

But I need a smarter advice from an experienced person.

Thank you in advance and looking forward for your reply!

Alexandru”

Don’t miss our free Get Out of Debt – β€œHow To” Guide Series on a number of topics, for loads of practical advice, tips, and help to beat back debt. – Click Here

The Answer

Dear Alexandru,

I took a look at the First National Bank of Omaha website and I see they do offer something called the First Creditline loan program but their current interest rate in 18%. They are also offering an unsecured loan for between 5.99% – 17.45%. – Source

A debt consolidation loan can be a smart way to get out of debt as long as you don’t fall back into debt while you are repaying the previous loan. Additionally, remember to NOT close the credit cards you pay off. You will want to at least keep the three oldest cards open to help boost your credit score with your long relationship with those cards.

I suspect the offer you got in the mail is just an offer and not an approval for the loan. This will leave you in the same boat as you were in with Prosper. It might be a good idea to call the bank and explain your situation before applying. They might be able to share with you what there approval criteria is for debt to income ratio and save you some angst and grief.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

Is the First Solution Loan Program from First National Bank of Omaha a Good Idea?
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Ben There

    Don’t use this!!! They jump up the interest on your account very quickly after you obtain anything from them. Stay away from First National Bank of Omaha. The company is out to get the working person.

  • Rob

    Does participation in a program like this hurt one’s credit score?

    • Jason

      It depends. A lot has to do with how you have handled the existing debts and will handle them in the future. A good way to help figure this out is to use creditkarma.com as it gives you a good idea of how much an account weighs against your score. A good example would be if you are recently starting to struggle with payments and you fall 30 days on one or two, the age of those accounts greatly influences how hard that missed payment affects your score. Basically, the older the account, the less impact it has. So if you have a short history and then proceed to transfer the balance to a loan, hence paying off this card, you can actually hurt more than help your score. Does that make sense?

      On the other hand, it could be a VERY good move if you are transferring balances from store cards and closing those, regardless of their payment history. I can tell you that those only seem to hurt more than help to the point that in out situation, my wife’s store cards negatively affected her score, to the point that regardless of the fact that she rarely paid late, a bankruptcy had only pushed her score down another 30 points, and according to the credit tool on creditkarma, the score will pretty much bounce right up to where it was when those debts finally show as discharged/closed.

  • Janice Poss

    I received this offer also. Here’s what I would do: I would look at all your outstanding balances and calculate the interest you pay overall and see if that matches the interest rates they are paying. Then I would negotiate with them to get a better rate then what you have now paying all the cards separately.
    What they are doing in paying off your credit cards for you is that they are negotiating a new amount with those lenders for you which you could do yourself if you called each one individually. They base what interest rate they will charge you on what they negotiate with those companies and then tack on another percentage amount so they then make money off of you. So let’s say you are paying $470.00/month for 36 months on $20,000 @7.99% APR; they’ve probably paid those companies only 5 or 6% on that amount or they are paying prime (currently 3.25%) because of the assets they hold they have, the more you have the lower the rate!! So I would hardnose them into something lower than what they offer you or forget it because they are making alot of money off of us!!

  • Marc Butterfield

    Dear Steve,

    Our goal is to make the process simple for the customer, so we handle as much of the First Solution Loan transaction via phone as we can. So far, most of our customers have given us positive feedback on that experience. We have dedicated, trained Loan Specialists to work with the customer on the phone customizing a loan specifically for his/her needs. Then we pay off the customer’s existing creditors.

    While we strive to make it simple, it is a complex financial transaction that requires a lot of information. We do provide the loan agreement in advance (it comes with the direct mail solicitation), and we also allow the applicant a few days to review their final loan terms before they make their final decision.

    I hope this helps clarify the process.

    In addition, anyone receiving an offer can call the toll-free number listed on the solicitation to ask any questions they may have without applying for the product.

    Thanks and have a great day!

    Sincerely,

    Marc Butterfield
    Director of Personal Loans, First National Bank of Omaha

  • John

    As someone who knows first hand about First National Bank of Omaha and this loan product, the best thing to do would be to call in and ask questions to the representatives and you will get straightforward answers!

    • http://GetOutOfDebt.org Steve Rhode

      Checking out the terms and conditions in detail is always a good thing to do.

  • Catherine Trossbach

    Hello Steve, I also recieved the offer in the mail from First Solution loan program with First National Bank of Omaha. I am a little skeptical about this offer. It sounds like a really good offer. But I want will the APR or monthly payment change at anytime if I consider going with this. A few years ago I was into a different one of these type of loans and got burned bad. I ended up having to pay more money than what I borrowed. It took me several years to finally get out of it and I do not want to get in that situation again. If I was to borrow say $15,000 is the interest calculated in the monthly payment or is that extra. I will probably call the number provided and talk to a representative to find out more about this program. Thanks for your assistence.

    • http://GetOutOfDebt.org Steve Rhode

      The devil is in the details. Ask for a copy of the agreement or terms and conditions before you sign anything. Read through them and that should clarify the program for you.

      • Urs

        I did call- and they want all of your information& then they will pay your creditors for you- ALL WITH ONLY AN ELECTRONIC SIGNATURE& NO PAPERWORK TO GUARANTY ANYTHING OR WITH THE TERMS ALL WRITTEN OUT OF WHO THEY ARE PAYING WHAT TO

      • Urs

        and then they want your bank acct info to start autodraft of your payment- WHAT??? with NOTHING IN WRITING- NO WAY!!! i actually called back thru the bank number& found out it is a division of thier credit card services& only people in THAT AREA KNOW THE DETAILS- as in i asked other loan officers if this was standard procedure& he said not is his division but wasnt sure how that program worked- SO BEWARE UNLESS YOU WANT TO GIVE ALL YOUR ACCT NUMBERS& ALL YOUR BANK INFO OVER PHONE& ONLY GIVE VOICE SIGNATURE

      • http://GetOutOfDebt.org Steve Rhode

        That would concern me as well.

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