A little over a month ago, I interviewed FirstAgain CEO Gary Miller about a unique product: unsecured loans only for people with excellent credit. FirstAgain recently contacted me with some myths that they are in the process of debunking:
- Reputable lenders don’t offer unsecured loans.
- Unsecured loans are mainly for those with bad credit and few (or no) assets.
- Unsecured loans are only for small amounts of money.
- Significantly higher interest rates are a hallmark of unsecured loans.
- It can be difficult to get an unsecured loan.
I think that most of these myths are true only for those with poor credit. Those with good credit can actually get decent interest rates (that are only a little higher than secured debt) and higher loan amounts. Indeed, reputable lending institutions like Wells Fargo and KeyBank are offering unsecured loan amounts of $10,000 or more. FirstAgain offers even higher amounts to those with excellent credit.
To me, the biggest advantage of unsecured debt is that it is…unsecured. You aren’t putting an asset (usually on your home) on the line.
Disclosure: I have not been paid by FirstAgain, and I have yet to actually get a loan through the company. However, I really like the idea of rewarding those with excellent credit with a loan that works for them.