A new line of personal loans is targeting people trying to pay off credit card debt. Goldman Sachs, one of the biggest banks in the United States, has named their new product “Marcus,” after their founder, and put out a series of advertisements on streaming services like YouTube, Pandora and Hulu.
Marcus aims to give folks another option for paying off a large credit card balance that they may be carrying at a high interest rate. “Debt happens,” says the commercial. “It’s how you get out that counts.”
Loans from Marcus range from $3,500 to $30,000 and carry an average annual percentage rate of 12-13%. They are being offered to folks with average credit or above, with applications sent to consumers whose credit scores were 660 or higher. The loans are unsecured and there is no fee to apply. Repayment terms vary from two months to six years.
Goldman Sachs traditionally focuses on a clientele that is wealthy and privileged, along with catering to corporations. But recently they have reached out to a different sort of client, launching an online savings account folks can open with just one dollar. The interest rate is 1.05%, which is higher than the industry average. With this new product, the behemoth bank looks to be trying to remove the stigma of being in credit card debt.
The more traditional method of paying down credit card debt quickly and with lower interest is to apply for a balance transfer credit card, which lets folks pay off a balance interest-free for an introductory period ranging from six months to two years, depending on the exact terms of the offer.
Balance transfer obstacles
One of the things that may keep some people from doing a balance transfer is the fact that credit card companies usually charge a small balance transfer fee for this service. Although the fee is usually small – on the order of three to five percent of the total transferred – folks may not want to pay it.
Another factor is creditworthiness. Some of the better balance transfer offers require that people have good or excellent credit to qualify. The new Goldman Sachs offering has a less stringent credit score requirement.