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Goldman Sachs' new online lending platform for Main Street has launched

REUTERS/Brendan McDermid

Investment banking giant Goldman Sachs (GS) is now giving loans to Main Street.

On Thursday, Goldman announced the official launch of its new online consumer lending arm called “Marcus.”

Named after one of the bank’s original business partners Marcus Goldman—who started the firm 147 years ago with Samuel Sachs—the new retail platform allows credit-worthy borrowers to apply for fixed-rate, no-fee loans of up to $30,000 for periods of two to six years.

“For many who manage debt payments on high-interest rate credit cards, a straight- forward personal loan is a better solution,” Harit Talwar, head of Marcus by Goldman Sachs, said in a statement.

He added: “Marcus offers an option for consumers who are searching for a simpler alternative to credit card borrowing, where rates can change and multiple fees can be charged.”

Talwar, a former head of Discover Financial Services’ US credit-card business, joined Goldman as a partner last year to help lead the firm’s online lending efforts.

Marcus

Traditionally, Goldman’s clients have included corporations, financial institutions, governments, and high-net-worth individuals.

During the 2008 financial crisis, Goldman was required to convert from a broker-dealer to a bank holding company to gain access to the discount window at the Federal Reserve. Since that time, there have been internal discussions on how to grow the consumer side of the business.

Earlier this year, Goldman’s GS Bank acquired GE Capital’s online deposit platform and assumed approximately $16 billion in deposits.

Marcus was the other big project. For the endeavor, the team spoke to thousands of consumers to learn about their experiences of managing personal debt.

“This feedback was central to the design of the Marcus personal loan product and the customer experience,” the bank said in its release.

Consumers are tired of hidden fees. Marcus has no fees. Consumers are stressed by unexpected changes in interest rates on credit cards. Marcus offers fixed rates throughout the term of the loan. Consumers are disgruntled by pre-assigned payment dates and limited payment options. Marcus enables customers to choose their monthly payment date and a payment option designed to fit their budget. Consumers are frustrated with automated machines instead of being able to speak to someone directly when they need assistance. Marcus has U.S.-based, dedicated loan specialists who deliver live, personalized support.”

Goldman’s Marcus will compete with other online-only lending startups such as LendingClub (LC) and Prosper.


Julia La Roche is a finance reporter at Yahoo Finance.

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