For may Washington area residents, the April "loan sale" sponsored by the American Security Bank yesterday -- where people could borrow money with the ease of buying linen in January -- was just what the doctor ordered. Not to mention the landlord or the telephone company or the tax collector.
In some cases within minutes, applicants walked into one of 16 American Security bank branches, filled out a form and walked out with a personal loan approved for up to $10,000, at a 9 per cent interest rate. Some loans were tentatively approved without so much as employment verification, bank officials said.
Tim Holland, a senior vice president at American Security, said the loan sale was held in April because "this is the time of year when people are borrowing a lot of money. They are emerging from winter and things needs fixing. people are interested in buying boats and going on vacations. It's also income tax time." he said.
Holland added, "We are in competition with other banks, but our primary focus is to take a harder look at consumer needs and deal with them."
By offering personal and home improbement loans with an 18 per cent reduction in interest rates -- from 11.5 per cent to 9 per cent -- American Security hopes to attract new checking and savings accounts. Holland said he believes this is the first time such a "loan sale" has been held in Washington.
Elliott Steele, a 34-year-old elemtary school teacher who lives in Alexandria, was one of those who applied for a loan yesterday. He said he had read about the reduced rate loans in a local newspaper. The two-day sale had been heavily advertised on radio, in newspapers and by bank teilers.
"Well, the rent is past due for one thing." said Steele. explaining why he applied. "We could have put that off for a while but with a deal like this we figured we could do pretty good. My wife and I teach and we have some time off coming up and we want to travel, so."
Roger Warin, 32, a lawyer, said, "It's a good idea." While filling out an application at the bank's Dupont Circle branch he said, "I'm happy to see what appears to be competition among the banks."
Warin said he really didn't need the money. "But it allows me to do some repairs at home and make some investments. It's also good to help establish a credit rating." he said.
Bank officials said it appears that most of the estimated 300 or so applicants already did business with American Security, but they will not know for certain until sometime Wednesday when all of the applications are expected to be processed.
Many of the applicants were heavily in debt, Holland said, and had to settle for some free counseling. Loans for home repairs, automobile purchases, boats and vacations. however, outnumbered those for debt consolidation, he said. Holland refused to disclose how much money was lent yesterday.
Holland said that consumer borrowing was up compared with last year, although the number of applications approved appeared to be about the same. "So far we feel the response has been excellent. Clearly the rate reduction and the fact that we did this on a Saturday had a lot to do with it." Holland said. "We couldn't do this all the time, but we feel we can make up for the loses in profits through new accounts we expect to generate."