Marcus personal loan review: Direct payments for debt consolidation

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In a Nutshell

Investment-banking giant Goldman Sachs offers personal loans through its online brand, Marcus. Marcus personal loans have no application, origination, prepayment-penalty or late fees, and you can even defer one payment without penalty after making 12 consecutive payments on time and in full. But qualifying may be difficult unless you have solid credit.

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Pros Cons
No application, origination, prepayment-penalty or late fees Solid credit scores typically required for competitive rates
On-time payment rewards No joint applications
Direct payments for debt consolidation  

What you need to know about a Marcus personal loan

Investment bank Goldman Sachs began offering personal loans through its Marcus online brand in 2016. Named after the company’s founder, Marcus Goldman, the online-lending platform is particularly aimed at helping people consolidate debt through its Direct Payment program.

Other popular uses for a Marcus personal loan include home improvement, moving, weddings and vacations.

Marcus offers fixed-rate unsecured personal loans ranging from $3,500 to $40,000 for terms that can last from three to six years.

Direct payments for debt consolidation

Marcus promises to make paying down your credit card debt simple. If you’re approved for a debt consolidation loan, the company will send the funds directly to your credit card companies. You may use direct payment for up to 10 credit cards and you won’t have to pay a fee.

Just remember to continue making payments on your credit card debt until you verify that it’s been paid off.

No application, origination, prepayment-penalty or late fees

Marcus personal loans don’t come with any application, origination, late or annual fees. This helps differentiate Marcus from competitors that charge late fees if you miss a payment or origination fees that they’ll deduct from your loan proceeds.

Marcus doesn’t charge a prepayment penalty either, so you won’t be penalized for paying off your loan early. If you’re searching for a lender that doesn’t nickel and dime you with fees, Marcus may be a good option for you.

Relatively high eligibility requirements

Marcus caters to borrowers with pretty stellar credit. To qualify for a loan with Marcus at the most-competitive rates, you’ll probably need to be seen as very creditworthy by the lender.

In fact, 85% of people approved for a Marcus loan have FICO® credit scores of at least 660, according to Goldman Sachs’ 2019 annual report.

Since Marcus doesn’t accept joint applications, you may want to look elsewhere for a personal loan if your credit scores are below that threshold.

On-time payment reward

To reward borrowers for making their payments on time, Marcus offers an on-time payment reward. After you make 12 or more consecutive full monthly payments on time, you may defer one payment.

You won’t have to pay any extra interest during your deferral and you can extend your loan by one month — just note that during the extra month, any interest on the loan will accrue like normal. After the deferral, you’ll resume your regular payments. But if you ever make a late payment or miss a payment, this feature won’t be available to you for the rest of your loan term.

Who is a Marcus personal loan good for?

If you have a strong credit history, you may be able to qualify for a favorable interest rate and terms with a Marcus personal loan. Marcus interest rates are competitive compared to other lenders, and you may pay less in interest if you have excellent credit.

If you’d like to consolidate high-interest credit card debt, a personal loan through Marcus may be a good option for you to receive a fixed rate and get direct payments to pay off up to 10 credit cards.

A Marcus personal loan may also be a good option if you’d like to take out a loan that doesn’t charge origination, late or prepayment fees.

How to apply for a Marcus personal loan

To apply for a personal loan with Marcus, you can visit the lender’s website. You’ll be able to view your potential loan options after you provide some basic information. You can also check your loan options and rates without lowering your credit scores since Marcus uses a soft credit inquiry. Just remember that a hard inquiry may be required if you move forward with the application process, which could temporarily drop your credit scores by a few points.

If you decide to move forward, you’ll be directed to the official application process. As long as you have all of your information nearby, the process should only take a few minutes.

The loan application will ask you for the following information:

  • Full name and address
  • Date of birth
  • Email address
  • Total annual income
  • Monthly housing payment
  • Intended use of the loan
  • Proof of income
  • Social Security number, individual tax ID or photo ID

You can also call Marcus to request a paper application. If you’re approved for a loan, your funds will typically be deposited into your bank account in one to four business days.

Not sure Marcus is right for you? Consider these alternatives.

Here are a few alternatives you might want to consider if you’re not sure a Marcus loan is a good fit.

  • Discover: If you want another option for a lender that can send direct payments to creditors to consolidate your debt, Discover personal loans are worth a look.
  • Avant: An Avant personal loan may make sense for you if you have less-than-perfect credit.

About the author: Anna Baluch is a freelance personal finance writer from Cleveland, Ohio. You can find her work on sites like The Balance, Freedom Debt Relief, LendingTree and RateGenius. Anna has an MBA… Read more.