Marcus Personal Loans 2021 Review: Low Rates and No Fees, But Minimum Credit Score Requirements Are Unclear

An image to accompany a review of Marcus personal loans Illustration/NextAdvisor

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Marcus is a relatively new brand launched by the investment bank and financial services company Goldman Sachs in 2016. The brand offers several financial products, including savings accounts and CDs, investment accounts, and personal loans. Marcus also offers MarcusPay, which allows you to pay for large purchases in multiple installments, similar to a personal loan. Customers can access all their financial accounts through Marcus’ mobile app.

For creditworthy borrowers, Marcus can be an excellent lender to work with since it has competitive interest rates, a 0.25% rate discount if you enroll in AutoPay, and no fees. Marcus does not charge origination fees, prepayment fees, or late fees (though late payments may still have other consequences). A unique perk Marcus offers is an on-time payment reward, where customers who pay their loan on time and in full every month for 12 consecutive months are allowed to defer their payment for one month, if they so choose. Interest will not accrue during this time, and Marcus will simply extend the loan by one month. 

While Marcus is a great option for borrowers with good or excellent credit, those with lower credit scores are unlikely to qualify for a loan and may have a better chance of getting approved by a lender on our best personal loans for bad credit list. 

What to Know Before Getting a Personal Loan

Personal loan lenders allow you to borrow thousands and get the money disbursed into your bank account within days. Unlike other types of loans, like mortgages or auto loans, personal loans have fewer limitations on their uses. They can be secured or unsecured, and you can use a personal loan to consolidate debt, pay medical bills, or finance a major purchase. 

However, you should think twice about using personal loans for non-essential spending. Some personal loans have high interest rates, and lenders may charge origination and late fees, adding to your loan cost. It’s wise to shop around and compare personal loan rates and terms to find the best deal. Once your loan is issued, make sure you make all of your payments on time to avoid costly late fees or damage to your credit score. 

Alternatives to Personal Loans

While personal loans can provide you with quick access to cash for emergencies or major projects, it’s not the only financing option available to you. Here are some alternatives to personal loans that might be better suited for your needs: 

  • A home equity line of credit (HELOC), home equity loan, or cash-out refinance. If you’re a homeowner and have built equity in your home, you can borrow against that equity using your home as collateral. HELOCs, home equity loans, and cash-out refinance loans can be convenient ways to pay for renovations or repairs, but you risk the bank foreclosing on your home if you fall behind on your payments. 
  • A balance transfer credit card. If you have good credit, you may qualify for a credit card with a 0% annual percentage rate (APR) promotional offer for balance transfers. Depending on the card, you could have up to 18 months to pay off the balance before the regular APR begins. Just make sure you pay off the balance within the promotional period; otherwise, you’ll pay a high interest rate on the remaining balance. 
  • Savings strategy. If you have an upcoming expense that isn’t an emergency, such as a vacation or wedding, another option is to open a separate savings account. You can pay cash and save money on interest charges by setting aside money every payday for your goal. 
  • Buy now, pay later services. If you have a big purchase in mind, like a computer or exercise equipment, you can use a buy now, pay later service to spread the cost over several months. Some companies won’t charge interest for this service(although they may charge a one-time or monthly fee), and you can pay for the purchase in weekly or monthly installments. 
  • Pay advance: If you have an emergency but don’t have an emergency fund, you may need cash right away. Before turning to a personal loan or expensive payday loan, consider asking your employer for an advance on your next paycheck. Although not all employers allow this, you may be able to receive a portion of your pay early and have the amount deducted from your next paycheck. Note that this is different from cash advance services offered by a third party. 
  • Free credit counseling: If you’re struggling to create a budget and repay your debt, contacting a non-profit credit counseling agency can help you get your finances back on track. They won’t give you a loan, but they can give you the tools and skills you need to manage your money. You can find a reputable credit counselor by searching through the United States Trustee Program database of credit counseling agencies

Pros and Cons of Marcus Personal Loans

Pros

  • No origination or late fees

  • On-time payment rewards

  • Adjustable payment due dates

  • Available in all 50 states

  • Prequalification tool available with a soft credit check

  • 0.25% AutoPay discount

Cons

  • Five days for loan disbursement after approval

  • Cosigners not accepted

  • Unknown credit score and income requirements

Marcus Compared to Other Lenders

Marcus by Goldman SachsSoFiLightStream
Current APR6.99% to 19.99% ( 0.25% AutoPay discount available)4.99% to 19.63%2.49% to 20.49%
Loan Term Range36 to 72 months24 to 84 months1 to 12 years, depending on loan’s purpose
Loan Amount$3,500 to $40,000$5,000 to $100,000$5,000 to $100,000, depending on loan’s purpose
Credit Score NeededNot specified680660
Prepayment PenaltyNoneNoneNone
Origination FeeNoneNoneNone
Unsecured or Secured DebtUnsecuredUnsecuredUnsecured

The above rates and loan information is accurate as of Aug. 12, 2021. The NextAdvisor editorial team updates this information regularly, though it is possible APRs and other information has changed since it was last updated. Some of the lowest advertised rates might be for secured loans, which require collateral such as your home, car, or other asset. Also, some loan offerings may be specific to where you live.

How to Qualify for a Marcus Personal Loan

To be eligible for a Marcus personal loan, you must:

  • Be over 18 years of age (19 in Alabama, 21 in Mississippi and Puerto Rico)
  • Have a valid U.S. bank account
  • Have valid Social Security or Individual Tax I.D. Number

Marcus doesn’t specify a minimum credit score requirement on their website. When we reached out for more information, a company representative said that Marcus looks at “numerous credit history factors, including the customer’s FICO score” when evaluating loan applications. However, you’ll likely need good or excellent credit to qualify for a Marcus loan. And the better your credit, the better your chances of securing a low interest rate.

Marcus also doesn’t specify a minimum income requirement, but it does require applicants to submit proof of income on their application. Acceptable documents include pay stubs, recent bank statements, W-2s, and tax returns. A company representative said that Marcus looks at “the customer’s debt obligations and income to assess the affordability of the monthly payments for their Marcus Loan.”  

It’s worth noting that Marcus does not allow co-signers or joint applications, so a friend or family member won’t be able to help you out if you can’t qualify for a Marcus loan. 

Who Should Get a Marcus Personal Loan

Marcus personal loans are best for borrowers with good to excellent credit and stable income who need cash for a non-emergency expense. You can borrow up to $40,000 without worrying about origination fees, late fees, or prepayment penalties. 

Since it can take up to five business days to receive your money from Marcus, it’s best for planned expenses, such as:

  • Debt consolidation
  • Home renovations
  • Property repairs
  • Upcoming medical bills
  • Veterinary bills
  • Adoption financing

Marcus allows you to use the money however you wish, with a few exceptions: you cannot use your personal loan to repay student loans or for education expenses, and you can’t use it to repay an existing Marcus loan.

Although Marcus personal loans offer many perks, those who have poor or fair credit scores may not be able to qualify for one. If your credit score is less-than-stellar, you may want to check out our best personal loans for bad credit list instead.

How to Apply for a Marcus Personal Loan

If you’ve decided a Marcus personal loan is the right choice for you, here’s how to apply for a loan. 

  1. Check your loan options. By using Marcus’ “Review Your Options” loan prequalification tool, you can see what rates and terms you may qualify for without affecting your credit score. 
  2. Select the loan terms that best fit your needs. Marcus will provide you with multiple loan options with different repayment periods, monthly payments, and interest rates. Once you find the one that matches your needs, select that loan and proceed to the application section. 
  3. Fill out the application. Marcus’ application will ask for your personal information, including your name, birth date, Social Security number, and mailing address. You will also have to provide your intended use for the loan, monthly housing expense, and employment or income information. When you formally apply for the loan, Marcus will perform a hard credit inquiry, which could affect your credit score.
  4. Review your loan agreement. If you submit the application and Marcus approves you for the loan, the lender will send you a loan agreement to review and sign. The agreement will list the loan amount, APR, repayment period, and other terms. Check all of the information to make sure it’s correct and that you’re comfortable with it before signing. 
  5. Complete the verification process. Before Marcus can issue the funds to you, you must verify your identity and bank information. You’ll usually have to submit a copy of a photo ID, such as a driver’s license, and your bank routing and account numbers. 
  6. Receive your loan. Once your information is verified, Marcus will disburse the loan. Depending on when the loan was approved, you’ll typically receive the money within five business days. 

Marcus Personal Loans FAQs

Is Marcus by Goldman Sachs good for personal loans?

A personal loan from Marcus may be a good option for you if you have good to excellent credit and don’t need the money for an immediate expense. If you can wait a few days until the money arrives, you can borrow up to $40,000 through Marcus without collateral.  Plus, Marcus doesn’t charge origination fees, late fees, or prepayment penalties. If you make 12 consecutive payments on time, you can take advantage of its on-time payment reward benefit and skip a payment without interest accruing.

What credit score do you need for a Marcus loan?

Marcus doesn’t specify a minimum credit score, but you’ll likely need good or excellent credit to qualify for a loan. And the best rates are typically only available to those with the highest credit scores.

Can I get a Marcus personal loan with bad credit?

If you have fair poor poor credit, you may have a hard time qualifying for a Marcus loan. Marcus doesn’t allow applicants to add cosigners to their applications, so borrowers with bad credit will have to work with another lender that has lower credit requirements or allows cosigners on personal loan applications.

Does a Marcus loan hurt your credit?

Applying for a loan from Marcus or any personal loan lender can affect your credit score in different ways. Whenever a new credit inquiry appears on your credit report, it can impact your score. According to myFICO, a new credit inquiry will lower most people’s scores by less than five points. However, adding an installment loan to your credit report can improve your credit mix. And, making all of your loan payments on time will positively affect your payment history and boost your credit.