What is ‘BOGO Loan’

A BOGO loan stands for buy-one, get-one. Just like at the grocery store, lenders sometimes offer a mortgage loans or car loans at the regular prevailing interest rate, then half the normal rate for a second loan on, say, a boat or recreational vehicle.

BOGO loan involve either a new loan, a mortgage refinancing, or both.


BOGO loans sometimes involve clever marketing on the part of local banks and credit unions, which compete against international and national banks, as well as large direct lenders. BOGO marketing helps spur additional lending when borrowers know they can get a discounted rate on an additional loan. Typically, lenders offer BOGOs for a limited time, either seasonally or every so often when banks are struggling to drum up new business. Sometimes, lenders set a minimum interest rate on the second loan. For instance, it’s either half off the normal rate or 3%, whichever is greater. Some also offer a dollar limit on the second loan; perhaps it’s only good for loans up to $10,000.

In addition, some BOGO promotions allow lenders to take out a second loan at a discounted rate within a set period, say…