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Comment by ryandrake | Hacker News Reader

> So I had a brief negotiation with First Republic, where I asked for (and got) a $100,000 credit line “for cash management purposes.” My recollection is that this took less than two hours total, inclusive of time to write the loan application.

Fascinating look at a world that I just kind of assumed was only for the ultra-wealthy. Who knew one could simply stroll into a bank, and two hours later and a couple of signatures and handshakes, simply walk out with a $100K unsecured line of credit! Mind blown. I always just assumed that you had to show $millions in net worth or be some kind of Investment Banking super-partner to the bank in order to get such generous treatment. Or at least secure the credit with something. Wow.

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Unfortunately, your intuition is largely correct. The First Republic product was unique, and basically a marketing tool (as the article does explain). Typical unsecured rates for loans to individuals are floating, calculated as (libor/sofor) + some market rate, or maybe just prime+. The market rate can be quite high.

Depending on prevailing circumstances (basically how long has it been since there’s been a financial crisis, or how frothy are the markets currently?), it can be a pretty common product. Like Patrick wrote, smaller lenders and private bank divisions of the big banks (used to?) love to give these to people with highly probable future income and wealth generation potential (doctors, lawyers, etc.)

Though, am I wrong, or wouldn’t it be pretty straightforward for someone with what I assume would be average comp for an HN reader to take out several credit cards and get a similar amount of unsecured credit? Obviously a different loan product (higher interest rate, non-amortizing) but isn’t that a fairly accessible path to six figures of unsecured debt?

Sure one can use credit cards, but the *below market*, and *fixed* rate on *unsecured* debt is fairly unique. In fact, I don't think there is anything even remotely like it available today. But do let me know. I too gorged on that First Republic Product and I miss the good old days.

For high-net worth individuals it's pretty easy to access significantly sized pledged asset lines of credit, portfolio margin loans, and the like but that's secured debt, often (but not always) variable rate, and the rates are not great.

When interest rates were zero-ish, you could get low margin rates, but again, not fixed and secured.

Sorry for the late response - if you see this, I think Citi private bank still has some pretty cheap unsecured loan products.

Agreed, credit cards are a different beast and not as borrower favorable as those lines of credit, but probably with 10 years of responsible credit usage and a decent job could put enough on credit cards to bootstrap a startup with $0 outside equity. And there’s always the Argentina put if it doesn’t pan out.

Thanks for any response!

I talked to my citi private bank rep. He was quoting ~8% rates on asset backed loans. Seemed a bad deal to me. I find that citi is a bit negotiable, so if you are getting quoted significantly better rates let me know!

He already had 100k in other accounts, and not just retirement savings. He was a safe bet.

There was nothing stopping Patrick from clearing out his other accounts, spending his line of credit on hookers and blow, and returning to Japan before the bank started knocking on his door.

That's why people who have good credit ratings get better terms.

Nothing stopping you to do something does not mean it is a likely event to happen ;)

As you can see, the product selection of users and ongoing results shows that really well.

What banks offer low interest lines of credit now that Chase ended FRB’s incentive

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