Marcus Debt Consolidation Review

Goldman Sachs, the financial services company, has been around since 1869.

Marcus by Goldman Sachs is a relatively new player in the online debt consolidation loan game, but may not be in it much longer.

Marcus in early 2023 sold off many of its low-performing personal loans and is only taking loan applications from consumers who get an invitation code by mail or email. The company doesn’t disclose who qualifies to get an invitation, but don’t expect one if your credit score is below 730.

The invitation code allows you to apply for a Marcus debt consolidation loan, but doesn’t guarantee you will be approved. The company considers credit history, income, and other undisclosed financial factors in making a loan decision.

If you’re not invited to apply for a Marcus personal loan, there are plenty of other options available for debt consolidation.

Marcus debt consolidation loans are from $3,500-$40,000, with loan terms 36-72 months. There are no late or prepayment fees. Borrowers who enroll in autopay get a 0.25% discount, and those who make 12 on-time payments in a row can skip a payment. All loans and deposit products are provided or issued by Goldman Sachs Bank USA, Salt Lake City branch.

Marcus by Goldman Sachs online consumer products division was launched by Goldman Sachs Bank USA in 2016. Besides personal loans, it offered high-interest deposit accounts and a luxury-oriented credit card. Marcus started off well, but hit roadblocks caused by fast advances in technology, the COVID-19 pandemic and heavy competition in the online consumer loan industry. Between December 2020 and December 2022, the new products lost more than $3 billion for the bank, spurring a restructuring.

Even if you are invited to apply for a loan from Marcus, it doesn’t necessarily mean you’ll be approved, or that it’s the right option for you. Let’s take a closer look at Marcus debt consolidation loans.

Snapshot:

• Type of Debt Relief – Debt consolidation loan
• Eligibility and requirements – Invitation code, 730 credit score
• Interest and Fees – APR 8.99%-29.99%; no fees
• Credit score impact – Minimal
• Consumer reviews – Mixed

How Marcus Debt Consolidation Loans Work

To apply for a Marcus debt consolidation loan, you must get an invitation in the mail or by email.

If you get a code, you can apply for a loan between $3,500 and $40,000 with terms ranging from 36-72 months. The loan terms you choose may affect your interest rate, which is falls between 8.99%-29.99%.

You can choose to receive the money and pay off your creditors yourself, or you can have Marcus pay your creditors directly. Marcus will pay up to 10 creditors. There’s no fee for the service, but there are some stipulations:

• Your credit card issuer must accept electronic payments.
• If you are trying to pay down a retail card or personal loan, your creditor must accept payment through a bill pay network.
• You cannot pay down debts owed to Goldman Sachs Bank USA, including another Marcus personal loan, Apple card or GM card.
• You can’t use it to pay student or education loans, or secured loans (mortgages, auto loans).
• It doesn’t support disbursements to all creditors, including Navy Federal Credit Union cards and personal loans, Sears National Bank card, First Bank and Trust card, Lending Club or Prosper personal loans.

Creditors will get the money within four business days, but Marcus doesn’t control how or when a creditor applies the money to a balance, so borrowers should keep making payments until they know the Marcus money has been applied.

How to Apply for a Marcus Debt Consolidation Loan

The first step is to receive an invitation code in the mail or by email. If you don’t, you can’t apply.

If you do, go to the Marcus by Goldman Sachs website, marcus.com, and plug the invitation code into the space provided.

You will fill out an online application form and be asked to provide documents to verify income (pay stubs, tax forms, employment contacts) as well as identity (Social Security number, driver’s license, etc.).

Once you’re approved, you e-sign your loan documents and connect your bank account, and money is deposited, or creditors are paid, within four business days of when the account is verified.

If your application is not approved, you’ll get an explanation in the mail within 10 days.

Plugging in the invitation code and seeing what is offered won’t affect your credit score, but once you start the application process, it will be a hard hit on your credit and could drop your score, depending on how many other hard credit pulls you’ve had in the last few years. Marcus notifies you when you get to the part of the application process that affects your score.

If the company continues to sell off loans and yours is one of them, you are still required to pay it. By law, the terms of the loan can’t be changed.

Marcus Debt Consolidation Loan Eligibility and Requirements

You need an invitation code to apply for a Marcus debt consolidation loan. If you don’t have a credit score of at least 730, don’t sit by your mailbox waiting for the invite. The company is offloading most of its loans, particularly lower-performing ones, so only borrowers who have stellar credit histories and the income to make on-time, in-full payments are asked to apply.

Fees for Marcus Debt Consolidation Services

Marcus debt consolidation loans have no fees, and that includes late payment fees. If you pay late, you accrue more interest, so it will still cost you money, even without the fee.

APRS are 8.99-29.99%, about average for what’s offered in the online loan industry.

Marcus also offers some perks:

• A 0.25% discount if you enroll in autopay upon applying (which means your payments are automatically taken from your bank account).
• The on-time payment reward allows you to defer a payment if you’ve made 12 on time and in full. No interest will be accrued during the deferral period. The deferred payment, or payments, is tacked onto the end of the term. If you miss a payment or are late on one, you no longer get the benefit.

Pros and Cons of Debt Consolidation with Marcus

Consumers with very good credit looking for a debt consolidation loan who get a Marcus invitation code in the mail may want to consider applying for a no-fee loan. Keep in mind, though, that your loan may be sold off if Marcus continues to unload its portfolio.

Pros of Marcus

• No fees
• .025% autopay discount
• On-time payment reward

Cons of Marcus

• Need invitation code to apply
• Credit history and finances must be stellar
• Some types of unsecured debt won’t be accepted
• If Goldman Sachs continues to restructure, your loan may be sold off

Marcus Reputation and Consumer Reviews

Marcus by Goldman Sachs has an A-plus rating by the Better Business Bureau, where it was accredited in 2018. In 2022, Marcus personal loans were the highest rated in overall customer satisfaction in J.D. Power’s annual U.S. consumer lending survey.

Still, Marcus by Goldman Sachs debt consolidation loans are on shaky ground, given the fact the company is restructuring the program and possibly getting out of the personal loan business. The U.S. Federal Reserve is also investigating whether proper consumer protections were put in place when Marcus was launched in 2016. The Consumer Financial Protection Bureau is looking into whether Marcus credit cards discriminate, which doesn’t affect the loans but may be an indication of how Marcus does business.

Reviews of Marcus in independent online review forums are largely negative, with customer service a big complaint. Loan customers are also unhappy with the strict qualifying requirements. While the review platform Yelp only has 16 Marcus reviews (about personal loans, as well as other products), all of them are one star.

One Yelp reviewer with a debt consolidation loan, paid her loan off successfully and early, with no late payments, aiming to boost her credit score, only to find that Goldman Sachs only reports to one of the three credit reporting agencies. She said her requests to the company to add the other two were declined with no explanation.

Is a Marcus Debt Consolidation Loan Right for Me?

The initial decision on whether a Marcus debt consolidation loan is right for you is made by Marcus.

If you receive an invitation code, have solid finances, and are looking to unload unsecured debt, you may want to consider it. Be sure that the debts you’re consolidating are ones the company allows, or it won’t be worth it.

Only apply if you are certain you can make payments on time, so you can take advantage of the reward and also not accrue extra interest. And, of course, if you default on your debt consolidation loan, it goes on your credit report for seven years and you’ll also be hounded by collectors.

Alternatives to Marcus Debt Consolidation Loans

If you’re not invited to apply for a Marcus debt consolidation loan, or if you decide it’s not a good fit for you, there are options to get a loan with bad credit.

Some other online loan options are:

• LightStream is a good option for borrowers who have good credit but don’t get a Marcus invitation code. Lightstream offers debt consolidation loans up to $100,000 for borrowers with a minimum score of 680, and caps interest at 20.49%. It also looks favorably at assets like savings and retirement accounts. There is no prequalification option, though, so checking it out means a hard credit pull.
• Avant is a good option for borrowers who have less-than-good credit, with scores as low as 580 accepted to apply. Loans range from $2,000 to $35,000, with APRs of 9.95-35.99% for terms of 12 to 60 months. Fees include an “administrative fee” of up to 4.75% when the loan is approved, and a $25 late payment fee.
• Discover has APRs from 6.99%-24.99% on loans from $2,500-$40,000. Repayment terms are 36-84 months. There is an income minimum requirement of $25,000, and it takes a holistic approach to who qualifies, with credit history, credit score and income all playing a part.
• Lending Club is one of the nation’s biggest online banks, and offers loans from $1,000-$40,000, with terms of either 36 or 60 months. Applicants can have a credit score as low as 600, but they’ll pay higher rates. There’s a 3%-6% origin fee and interest is 9.57%-36%.

Debt Management as an Alternative to Debt Consolidation Loans

A debt management plan pulls your debt together just like a debt consolidation loan, but it’s not a loan, so it means you’re not borrowing money, but tackling debt head-on. You can apply no matter what your credit score is.

The nonprofit credit counseling agencies that offer DMPs have agreements with credit card companies to reduce interest rates on your balances, so that means lower your monthly payments. You pay the nonprofit credit counseling agency a monthly fixed payment, and they pay your creditors. Fixed payments mean you’ll likely pay a lot less for the life of the balances. DPMs take 3-5 years to eliminate your debt, and on-time payments and debt reduction means your credit score will improve over the life of the plan.