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Marcus by Goldman Sachs Review: GS Bank Takes on Online Savings, CDs, and Personal Loans

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Marcus by Goldman Sachs savings account

Its interest rate and no fees make this a competitive savings account.

APY

Minimum Balance Amount

0.50%

None

  • Minimum opening deposit: None. However, you’ll need to deposit at least $1.00 if you want to earn any interest
  • Monthly account maintenance fee: None
  • ATM fee: N/A
  • ATM fee refund: N/A
  • Overdraft fee: None

This is a great account for almost anyone. However, before you click that “Learn More” button below, there are a couple of things to know.

No ATMs. First, Marcus by Goldman Sachs doesn’t offer ATM access to your savings account. You’ll either need to deposit or withdraw money by sending in a physical check, setting up direct deposits, or by moving the money to and from your other bank accounts via ACH or wire transfer.

No checking account. Second, Marcus does’t offer a corresponding checking account. That means you can only use this account as an external place to park your cash from your everyday money flow.

Keeping a separate savings account does have its benefits. For example, it’s harder to tempt yourself to withdraw the cash if you’re a chronic over-spender. But, it also means that there might be a delay of a few days if you need to transfer the money out of your Goldman Sachs online savings account and into your other checking account.

How to open a Goldman Sachs online savings account

It’s really easy to open an online savings account with Marcus by Goldman Sachs. You can do it online or over the phone as long as you’re 18 years or older, have a physical street address, and a Social Security Number or Individual Taxpayer Identification Number.

You’ll be required to sign a form which you can do online, or by mail if you’re opening the account over the phone.

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How their online savings account compares

Marcus’ online savings account can easily be described with one word: outstanding.

You’ll get a relatively high interest rate with this account, which is among the best online savings account rates you’ll find today. In fact, these rates are currently over seven times higher than the average savings account interest rate.

Even better, this account won’t charge you any fees for the privilege of keeping your money stashed there. It’s a tall order to find another bank that offers these high interest rates with terms this good.

Marcus by Goldman Sachs CD rates

Competitive CD rates, but watch out for early withdrawal limitations.

Term

APY

Minimum Deposit Amount

6 months

0.25%

$500

9 months

0.35%

$500

12 months

0.65%

$500

18 months

0.65%

$500

24 months

0.65%

$500

3 years

0.65%

$500

4 years

0.65%

$500

5 years

0.70%

$500

6 years

0.70%

$500

  • Minimum opening deposit: $500
  • Minimum balance amount to earn APY: $500
  • Early withdrawal penalty:
    • For CDs under 12 months, 90 days’ worth of interest
    • For CDs of 12 months to 5 years, 270 days’ worth of interest
    • For CDs of 5 years or over, 365 days’ worth of interest

Marcus’ CDs work a little differently from other CDs. Rather than having to set up and fund your account all at once, Goldman Sachs will give you 30 days to fully fund your account.

Once open, your interest will be tallied up and credited to your CD account each month. You can withdraw the interest earned at any time without paying an early withdrawal penalty, but heads up: If you withdraw the interest, your returns will be lower than the stated APY when you opened your account.

If you need to withdraw the money from your CD, you can only do so by pulling out the entire CD balance and paying the required early withdrawal penalty. There is no option for partial withdrawals of your cash.

Finally, once your CD has fully matured, you’ll have a 10-day grace period to withdraw the money, add more funds, and/or switch to a different CD term. If you don’t do anything, Marcus will automatically roll over your CD into another one of the same type, but with the current interest rate of the day.

How to open a Goldman Sachs CD

Marcus has made it super simple to open up a CD. First, you’ll need to be at least 18 years old, and have either a Social Security Number or an Individual Taxpayer Identification Number.

You can open an account easily online, or call them up by phone. You’ll need to sign an account opening form, which you can do online or via a hard-copy mailed form. Then, simply fund your CD account within 30 days, and you’re all set.

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How their CDs compare

The interest rates that Marcus offers on their CDs are top-notch. In fact, a few of their CD terms are among the current contenders for the best CD rates.

If you’re interested in pursuing a CD ladder approach, Marcus is one of our top picks because each of their CD terms offer above-average rates. This means you can rest easy that you’ll get the best rates for your CD ladder without having to complicate things by spreading out all of your CDs among a handful of different banks.

The only downside to these CDs compared with many other banks is that you can’t withdraw a portion of your cash if you need it. It’s either all-in, or all-out. However, once out, you’re still free to open a new CD with the surplus cash, as long as it’s at least the $500 minimum deposit size.

Marcus by Goldman Sachs personal loan

Personal loans offered by Marcus have low APRs, flexible terms, and no fees.

Terms

APR

Credit Required

Fees

Max Loan Amount

36 to 72 months

6.99%-19.99%

Not specified

None

$40,000

Marcus by Goldman Sachs® personal loans can be used for just about anything, from consolidating debt to financing a large home improvement project. They offer some of the best rates available, with APRs as low as 6.99%, and you’ll not only be able to choose between a range of loan terms, but you can also choose the specific day of the month when you want to make your loan payments.

While there are no specific credit requirements to get a loan through Marcus, the company does try to target those that have “prime” credit, which is usually those with a FICO score higher than 660. Even with a less than excellent credit score, you may be able to qualify for a personal loan from Marcus, though, those that have recent, negative marks on their credit report, such as missed payments, will likely be rejected.

Applicants must be over 18 (19 in Alabama and Nebraska, 21 in Mississippi and Puerto Rico) and have a valid U.S. bank account. You are also required to have a Social Security or Individual Tax I.D. Number.

No fees. Marcus charges no extra fees for their personal loans. There is No origination fee associated with getting a loan, but there are also no late fees associated with missing payments. Those missed payments simply accrue more interest and your loan will be extended.

Defer payments. Once you have made on-time payments for a full year, you will have the ability to defer a payment. This means that if an unexpected expense or lost job hurts your budget one month, you can push that payment back by a month without negatively impacting your credit report.

How to apply for a Marcus personal loan

Marcus by Goldman Sachs offers a process that is completely online, allowing you to apply, choose the loan you want, submit all of your documents, and get approved without having to leave home. Here are the steps that you will complete to get a personal loan from Marcus:

  1. Fill out the information that is required in the online application, including your basic personal and financial information, as well as how much you would like to borrow and what you will use the money for.
  2. After a soft pull on your credit, and if you qualify, you will be presented a list of different loan options that may include different rates and terms.
  3. Once you have chosen the loan you want, you will need to provide additional information to verify your identity. You may also be asked for information that can be used to verify your income and you will need to provide your bank account information so that the money can be distributed.
  4. Many Marcus customers receive funds in as little as 5 days.

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How their personal loans compare

Marcus offers low APRs and flexible terms with their personal loans, but their main feature is that they have no fees. If you are looking for a straightforward lending experience with no hidden fees or costs, Marcus will be perfect for you since you won’t even have to worry about late fees if you happen to miss a payment.

While Marcus offers some great perks, you may be able to get a lower rate if you choose to go with another lender, such as LightStream or SoFi. Both of these lenders offer lower APR ranges and they don’t charge origination fees, though, LightStream will do a hard pull on your credit to preapprove you.

LendingClub and Peerform both have lower credit requirements than Marcus, but they also charge origination fees and, being P2P lending platforms, you will need to wait for your loan to be funded and you run the risk that other users might not fund your loan.

Overall review of Marcus by Goldman Sachs‘ products

Marcus has really hit it out of the park with their personal loans, online savings, and CD accounts. Each of these accounts offers some of the best features available on the market, while shrinking the fees down to a minuscule, or even nonexistent, amount. Their website is also slick and easy to use for online-savvy people.

The only thing we can find to complain about with Marcus is that they don’t offer an equally-awesome checking account to accompany their other deposit products. Indeed, it seems like Marcus has turned their former hoity-toity image around: Today, they’re a bank that we’d recommend to anyone, even blue-collar folks.

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What Is a Perfect Credit Score, and Why Does It Matter?

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A perfect credit score is 850 — specifically, that’s the highest FICO score. FICO is the scoring model most commonly used to determine, in part, how trustworthy you are as a borrower and what kinds of terms lenders could extend to you.

FICO credit scores range from 300 to 850, and your score is based on information in your credit reports. Think of it as your financial report card: The higher your credit score, the more liable you are to find lenders willing to work with you and offer you lower fees. This is true across all kinds of loans, from mortgages to auto loans, credit cards and more.

FICO credit score range: Where do you fall?

The average FICO credit score is 703, according to Experian’s 2019 Consumer Credit Review. The average bottomed at 686 during the housing crisis in 2009, when there was a sharp increase in foreclosures, but since then, the average has steadily risen.

To see where you stand, consider FICO’s credit score range:

FICO score chart
Credit score rangeRating
800-850Exceptional
740-799Very good
670-739Good
580-669Fair
300-579Very poor

Factors that affect your credit score

Your credit score is determined by a number of factors, from your payment history to the types of credit accounts you have open. Here’s a closer look:

  • Payment history (35%): Your track record for making on-time and in-full payments on credit affects a large chunk of your credit score. Late payments, delinquent accounts and debt in collections can adversely affect your credit.
  • Amounts owed (30%): How much money you owe on credit accounts can negatively affect your credit if it appears that your finances are stretched thin. Maxed-out credit cards, for example, can hurt your credit score.
  • Length of credit history (15%): A long credit history can positively affect your credit. On the flip side, a short credit history could be harmful, as there’s less evidence that you can manage credit for long periods of time. Factors assessed for this part of the score include the average ages of all accounts and how long it’s been since you’ve used them.
  • Credit mix (10%): Showing an ability to manage different types of credit products can have a positive influence on your credit score.
  • New credit (10%): Opening several credit accounts at once can be a red flag.

Benefits of a strong credit score

Lower interest rates

If you’ve got strong credit, you may qualify for competitive offers from a wide variety of lenders, whether you need a personal loan, auto loan or a line of credit. In general, a lower interest rate translates to a lower cost of borrowing. Over time, low interest rates can save you hundreds, if not thousands, of dollars on a loan.

Higher loan amounts and credit limits

You may also be able to borrow larger amounts of money compared to borrowers with poor credit. For example, you may be able to get a credit card with a $30,000 credit limit versus a $10,000 limit. You may also qualify for credit cards with low-APR introductory offers and rewards.

Better housing opportunities

Mortgage lenders and landlords want to know that you’re going to be responsible and honor your financial obligations. When it comes to a mortgage, your credit — among other factors — will affect your eligibility as well as the terms you receive.

For renters, many landlords run credit checks to see if you’re current on your accounts and have a positive rental and payment history. A good credit score could land you the rental you want and help you avoid needing to go the extra mile to prove you’d be a reliable renter.

Lower insurance premiums

The higher your credit score, the better chance for lower premiums on insurance, for items like your car or home. That’s because higher credit scores may be associated with a lower rate of filed claims. Insurance providers, meanwhile, may see lower credit scores as representing a higher risk and potential for more filed claims.

Better cell phone deals

Whether you’re hoping to snag the latest cell phone, sign up for a new cell phone plan or score special financing on a gadget, your credit score can affect your eligibility. In general, premium offers may be reserved for those with stronger credit.

Don’t fret if you don’t have the highest credit score

Credit scores are not fixed — they’re constantly fluctuating with everyday actions. Making purchases with your credit card and paying down your credit card balance, for example, affect your credit. Your score is also affected by things you can’t control, such as the age of your accounts.

That said, if you reach that perfect 850 credit score, you may not remain there long. But lenders don’t particularly care whether your score is 850 or 790, noted credit expert John Ulzheimer, who describes a score of 760 or above as “the sweet spot for credit.”

Your credit isn’t the only factor that affects your eligibility for credit. Your income and whether you own your home can also influence your eligibility, for example.

How to get an 850 credit score — or get closer to one

Pay your bills on time

Consumers with pristine credit never miss a payment. They consistently pay their bills on time, while the average American, according to analysis by LendingTree, has about six late payments in their credit history. If you need help paying bills on time, consider setting up autopay or some other system that can work for you.

Reduce your credit card balance

Most experts recommend keeping your credit utilization rate below 30% — though those with at or near-perfect credit scores typically keep that utilization rate below 7%, according to Ulzheimer. So, consider chipping away at those credit card balances and minimizing how much you charge if you want to work toward higher credit.

Apply for credit strategically

You should only apply for credit when it makes financial sense to do so. Opening a bunch of new accounts, especially within a short period of time, may suggest that you’re financially squeezed and taking on more debt than you can handle — a credit score no-no.

Keep unused credit cards open

Keeping old credit cards open — as long as they’re not costing you money in annual fees — is a smart strategy, as closing an account may increase your credit utilization ratio. Owing the same amount but having fewer open accounts may lower your credit score.

However, credit card issuers may close old, unused accounts, so you should periodically make a small purchase on old accounts you want to keep open — just remember to pay them off to avoid interest.

Dispute any inaccuracies in your credit reports

Be sure to check your credit reports regularly at the three major credit bureaus: Experian, Equifax and TransUnion. Inaccuracies and mistakes can — and do — occur, perhaps more often than you realize. If you see errors, dispute the information as soon as possible as they could be dragging down your credit score.

Monitor your credit regularly

Consider credit monitoring to make sure your efforts to achieve credit score perfection are accurately reflected. Credit monitoring services can help you spot inaccuracies, and even possible identity theft. My LendingTree is one service that offers credit monitoring, and can also help you shop for loans.

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How to Get Out of Payday Loan Debt

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Payday loans come with high interest rates and fees, on top of short repayment terms of a few weeks. If you’ve failed to pay off a payday loan debt, you’ve likely rolled the balance into a new payday loan with additional fees. Once you’ve entered a debt cycle – where you use new debt to pay for old debt – it can feel impossible to get out.

There are several strategies to escape payday loan debt, such as debt consolidation and debt counseling. Here’s what you should know about them.

9 ways to get out of payday loan debt

1. Ask for an extended payment plan

Check if your payday lender is a member of the Community Financial Services Association of America (CFSA). If so, they are required by law to offer you an extended payment plan at no cost if you are unable to repay your loan in a single payment. However, you can only apply for an extension once a year, and the length of your extension varies depending on the state where you get the loan.

The benefit of an extended payment plan is getting more time to pay off your loan without racking up additional fees or service charges or ending up dealing with a collections agency.

2. Start a debt avalanche

A debt avalanche is a repayment strategy where you make additional payments on your highest-interest debt. In the meantime, you’ll only make minimum monthly payments on your other debts. The quicker you pay off high interest debts, the less you will pay in interest over time.

3. Sign up for a debt management plan with a nonprofit credit counseling agency

Signing up for free credit counseling services from a nonprofit agency that can help you put together a reasonable plan to pay off debt. You’ll work with a credit counselor who is well-versed in assessing a financial situation and coming up with helpful, clear steps for paying down your debt. Your credit counselor may even recommend a debt management plan.

With a debt management plan, your credit counselor will negotiate with creditors on your behalf to potentially reduce fees and interest rates on your debt, as well as your monthly payments. They can stop collection calls and help you repay your debt, in full, over time. These services, including workshops and educational materials, can come with a monthly fee but may be free depending on your circumstances.

You can look for reputable nonprofit credit counseling agencies through places like your local financial institution or credit union, consumer protection agency, universities, military bases or housing authorities. You can also search by your state of residence on a list of agencies approved by the United States Trustee Program.

4. Refinance your payday loan with a payday alternative loan

Federal credit unions are nonprofit alternatives to banks that could offer a great exit strategy, called a payday alternative loan, or PAL. These loans typically offer amounts between $200 and $1,000, with repayment terms of one to six months. Fees are capped at $20 and interest rates cannot exceed 28%, which is a stark contrast to what you could pay for predatory payday loans.

To get a PAL, you must have been a member of the federal credit union for at least one month. Some offer free financial counseling to their members, as well. You can search for credit unions near you at MyCreditUnion.gov.

5. Refinance with a personal loan

Traditional personal loans are unsecured, meaning they don’t require collateral, and are a common way to refinance or consolidate debt. They are offered by banks, credit unions and online lenders.

If you qualify for a personal loan, it could enable you to pay off your debt at a lower interest rate than what’s on your payday loan. Because personal loans come with longer repayment terms, usually from 12 to 60 months, you’ll also have more time to pay off your debt.

Personal loan lenders typically require fair or better credit to qualify, however. If you don’t qualify – or you’re only seeing high interest rates – you could seek out a secured loan like a secured personal loan or home equity loan. Securing a loan with a tangible asset could get you lower interest rates, saving you money in the long term. However, it can also be riskier as you could lose the asset that you provide as collateral if you default on the loan.

6. Get financial help from family and friends

Asking for help from loved ones can sometimes be difficult. However, if you can’t qualify for a loan from a lender, consider asking a friend or family member for any cash they can spare.

Even if they do decide to charge you interest, their terms could be much more reasonable than what the payday lender is currently charging you. You could pay them back in small amounts and take the time you need to fully relieve your debt without additional penalties.

Remember, though, that borrowing money from friends and family can sour the relationship if you don’t follow through on the terms you set. A February 2020 survey from LendingTree found that about 1 out of 3 family or friend lenders hadn’t been paid back, and another third of respondents said the lending arrangement had negative consequences.

7. Get a side hustle

Consider increasing your income and your ability to pay off your debt more quickly by turning free time into extra cash – at least temporarily. You might get a side hustle that won’t cut into your regular work schedule, such as:

  • Driving or delivering for Uber or a similar ride-sharing service
  • Monetizing valuable skills on Fiverr
  • Running errands on TaskRabbit

Another option is to tap into the sharing economy by renting out your assets online, whether it’s your parking spot or a spare room in your home.

8. Consider debt settlement

Debt settlement could take place in one of two ways. One option is to hire a third-party debt settlement company to negotiate with your creditor and reduce the amount you owe the creditor.

The typical debt settlement process starts with you stopping payments on your existing debts and instead making monthly payments to an account the settlement company creates for you. After anywhere from 90 to 180 days, the debt settlement company will negotiate with your creditors. If there’s an agreement for a payoff amount, the settlement company uses the money in your account to pay.

This method carries significant risks, such as having to pay hefty fees to the settlement company and not reaching a solution with the creditor. In the meantime, you could incur significant damage to your credit rating or even be taken to court. Also, the IRS may consider some of the savings from your settlement as taxable income.

Another way is to try negotiating with your creditor yourself. Explaining your situation won’t cost you anything, but it could help you work out a more manageable repayment plan. You could be pleasantly surprised at your creditor’s willingness to negotiate with you.

9. File for bankruptcy

Although bankruptcy is a way to escape payday loans and other unsecured debts, it should be your last resort. Bankruptcy is a long and arduous process that will damage your credit and should only be sought after in dire circumstances.
If you choose this option, you will first have to get pre-bankruptcy credit counseling to determine whether you need to file for Chapter 7 or Chapter 13.

  • In Chapter 7 bankruptcy, some of your assets may be seized and sold to pay back your creditors. Other assets may be considered safe from liquidation, but this depends on your state.
  • With Chapter 13 bankruptcy, you must agree to pay back your creditors over three to five years with a court-approved repayment plan.

Both types of bankruptcy will fully discharge your debts once the process is completed.

FAQ: Payday loans

In some cases, your lender may be willing to negotiate your repayment terms. Some lenders might offer you an extended repayment plan that could break your loan up into smaller payments.

You cannot simply stop paying a debt to which you have committed, without facing legal consequences. The lender could pass your debt to a collections agency or sue you and demand wage garnishment.

However, you can stop electronic debits from your bank account if you want to change your payment method in one of the following ways:

  • Call the lender to tell them you revoke your authorization to allow them to withdraw from your account.
  • Call your bank and let them know you’ve revoked authorization for the withdrawals.
  • Ask your bank to make a stop payment on the lender’s withdrawal at least three days before the payment date.
  • Keep an eye on your account to make sure the payment doesn’t go through. If it does, contact your bank.

The federal government does not provide payday loan relief. However, the Federal Trade Commission (FTC) could take legal action against payday lenders that employ illegal lending tactics.

If you feel your payday lender has done something illegal, get in touch with your state attorney general and the Consumer Financial Protection Bureau (CFPB) for advice.