The home improvement loans will be given as unsecured personal loans with interest rates that are usually lower than credit cards. The interest isn’t quite as low compared to a home equity line of credit (HELOC, but they are easy to access, whereas applying for a HELOC can take several months.
Borrowers have a number of options when they sign up for a loan through the Marcus platform; in addition to home improvement loans, they can also opt for debt consolidation or finance a vacation.
Many Marcus borrowers were already financing home improvement projects through credit cards and then applying for a loan to help pay down the balance. Goldman Sachs decided to simplify this process and begin offering home improvement loans. Borrowers can take out a loan between $3,500 and $40,000 and can receive the funds in as little as five days.
Harit Talwar, who is head of consumer banking at Goldman Sachs, said that the company chose to offer these loans because they realized there were few options available to consumers looking to finance a home improvement project. “We realized that our Marcus loans are well positioned for home improvements,” Talwar added.
Goldman Sachs has traditionally operated as an investment bank that serviced wealthy customers, traded stocks and bonds, and acted as an advisor to large companies. But after recognizing the benefits of consumer lending, they launched the Marcus platform in October 2016. At the time, consumers could apply for a no-fee, fixed-rate unsecured personal loan up to $30,000.
Since its inception, Marcus has reached over $2 billion in loans and last November, the company announced that it expects to reach $13 billion in consumer loans over the next three years. Marty Chavez, the Chief Financial Officer at Goldman Sachs, revealed at an investor conference that the typical Marcus borrower pays around 12 percent in interest.
However, the Marcus platform is just a fraction of the company’s overall business; Goldman Sachs currently manages more than $930 billion in total assets.
In his role at LendEDU, Mike uses data, usually from surveys and publicly-available resources, to identify emerging personal finance trends and tell unique stories. Mike’s work, featured in major outlets like The Wall Street Journal and The Washington Post, provides consumers with a personal finance measuring stick and can help them make informed finance decisions.