Goldman Sachs Enters the Debt Consolidation Market
Investment banking and trading giant Goldman Sachs has raised eyebrows in recent months with its efforts to expand beyond its established clientele to orient itself towards consumer banking services. With the introduction in October of the company’s new personal lending platform Marcus, the bank announced its entry into the retail banking sector.
Known for catering its investment and banking services to big-money customers including major corporations and governments, Goldman Sachs has moved into the personal banking sector as many of its usual revenue streams remain dormant or severely dampened. In a major pivot, the banking giant saw an opportunity after its purchase of GE Bank, an online-only banking solution.
With Marcus, Goldman Sachs is offering consumers the opportunity not only to take a personal loan, but to consolidate their existing debt as well. With incredibly low rates and a consumer-friendly approach to lending, Marcus might be the new best way to get out of debt quickly and securely without worrying about hidden costs and seedy lenders.
Entering the Market Late
Despite being known as a bank for the wealthy and powerful, Goldman Sachs is working on revamping its image with a new wave of consumer-oriented services. The bank hopes its new offerings will put it on the same playing field as retail banking giants such as Bank of America Merrill Lynch or Wells Fargo. The result has been a strong push to enter the personal lending industry and more specifically, the debt consolidation market.
Its entrance could not be better timed, as well, since the industry is facing real questions about its sustainability over the long-term. While many smaller online and marketplace lenders have grown the industry—which some estimate is worth as much as $1 trillion today—there are real concerns about whether some of the players can actually turn a profit and hold enough capital to make it a worthwhile model.
Goldman Sachs Aims to Disrupt
Thanks to the backing of a major bank’s coffers, as well as the expertise of a crack team of financial technology experts, Marcus is looking to disrupt the debt consolidation market. While the online lending platform is still in a beta phase—clients can only access by invitation—there are already hints that it might offer one of the best alternatives to pay down credit card debt.
Goldman Sachs is offering loans of up to $30,000, with payment terms ranging from a single year to six full years. While those numbers might seem industry-standard, the bank’s other offerings might push it head and shoulders above some competitors. For those looking to rein in spiraling debt and high interest rates, Marcus will offer excellent consolidation rates that range from 6.00% to 23.00% APR. Besides providing a much better rate than standard credit cards, Marcus will go a step further by completely eliminating hidden fees as well as prepayment and termination fees.
With More Competition, Consumers Win
The introduction of Goldman Sachs’ debt consolidation services threaten to disrupt an industry known for its lightning paced growth. While most industry members grew out of a rejection of traditional banks, these major institutions now have the power to turn the tables. While smaller competitors flare out and offer things they cannot deliver, Goldman Sachs’ decades of experience and immense capital backing make it a perfect candidate to be the latest market disruptor. In the end, the winner of the incredible new offers are consumers looking to consolidate their loans without breaking their backs.