NEW YORK (AP) — Goldman Sachs unveiled a long-awaited online consumer lending service Thursday, the investment bank's latest push to retail banking.
Eligible customers will be able borrow up to $30,000 as fixed-rate, no-fee, unsecured personal loans, with terms from two to six years. The service will be called Marcus, after one of the firm's founders, Marcus Goldman.
It's only the second foray into consumer finance for the venerable investment bank, which is better known as a power-player on Wall Street catering to wealthy investors, corporations and institutions. Earlier this year, it began offering online savings accounts and CDs.
Goldman Sachs is entering into a crowded industry. Online lenders like Prosper, Lending Club, Sofi and Avant are among the bigger names in the online lending market.
And there are plenty of personal loan offerings from traditional retail banks like JPMorgan Chase, Bank of America, or U.S. Bank. Most of these loans are aimed at customers with high credit scores looking to refinance credit card debt.
"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," Harit Talwar, head of Marcus, said in a prepared statement.
Initially, potential Marcus customers will be limited to those who receive mailers with a code to invite them to apply for a loan. Goldman said it plans on expanding the potential audience for personal loans in the coming months. The bank plans to offer loans with flexible payment dates and amounts, features that companies like Prosper and SoFi do not offer.
Goldman Sachs has seen consumer banking as a way to expand its business without large amounts of risk. It bought the online deposits of GE Capital earlier this year and used that to launch GSBank, its own online savings platform. Its online lending service was long expected. Goldman had said it was exploring getting into the service and announced key hires to help launch it.
Unlike Prosper or Lending Club, Goldman will be using its own deposits to fund the loans, which will give the bank an advantage because it will not have to meet the whims of outside investors.
Ken Sweet covers banks and consumer financial issues for The Associated Press. Follow him on Twitter at @kensweet.