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Susan Tompor: There Are Lots Of Options For Quick-Cash Fixes

By Susan Tompor
Detroit Free Press

WWR Article Summary (tl;dr) Online personal loans are marketed by a variety of outfits, from upstart lenders, such as the Lending Club and Prosper, to traditional players, such as PNC Bank and others.

Detroit Free Press

When big names in the financial services industry, including Detroit-based mortgage lender Quicken Loans and New York-based investment bank Goldman Sachs, enter a niche market for online personal loans, it’s fair to say that consumers can bank on more buzz for simple, quick-cash fixes.

Marcus by Goldman Sachs had a limited rollout in October and now is marketing a plan for Americans nationwide to get out of credit card debt. Marcus, yes, the name of one of the firm’s founders, Marcus Goldman, is offering no-fee personal loans of $3,500 to $30,000. The loans are a product of Goldman Sachs Bank USA.

RocketLoans, which is part of the Quicken Loans family of companies, launched a year ago by offering unsecured personal loans of $2,000 to $35,000.

Online personal loans are pitched as a way to help consumers consolidate high-interest credit card debt or as a strategy for financing expenses, such as major car repairs or a child’s braces.

“Tens of millions of families feel like they’re drowning financially, and many are steering clear of credit cards,” said Rohit Chopra, senior fellow at the Consumer Federation of America.

But these loans aren’t a low-cost, quick fix for everyone. Often, you’d need good to excellent credit to qualify, say, starting with a credit score of 640, and the rates could be in the single digits or double digits, depending on your credit profile and other factors.

“These are not being peddled to anyone with a pulse, at least not yet,” Chopra said.

Even so, some creditworthy consumers may find these loans attractive. They could appeal to consumers who are financing a one-time major purchase, for example. Instead of putting an engagement ring on a credit card, Chopra said, maybe you’d take out a personal loan.

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