Goldman Sachs has taken another step to boost its presence in the consumer lending market by marketing home improvement loans to its customers.
According to American Banker, the New York investment bank also recently raised the maximum loan size from $30,000 to $40,000.
Last October, Goldman launched Marcus by Goldman Sachs, an online platform offering unsecured personal loans to consumers. At the time, the company said credit-worthy borrowers could apply for fixed-rate, no-fee personal loans of up to $30,000 for periods of two to six years.
“For many who manage debt payments on high-interest rate credit cards, a straightforward personal loan is a better solution,” Harit Talwar, head of Marcus by Goldman Sachs, said in a press release. “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.”
Marcus has already lent out more than $2 billion, and in November, Goldman revealed that it can reach $13 billion in new consumer loans in the next three years through Marcus. Talwar also voiced concerns over the fact that the bank is getting deeper into the lending market at a time when consumer credit conditions could be declining.
“We’re aware the credit cycle won’t remain as benign as it had been,” he said. “We are very vigilant, and we are not growing as fast as demand is … We are declining a lot more (loans) because we want to build the business in a measured pace.”
Now Goldman is competing with online lenders LendingClub and Prosper Marketplace for borrowers who want to make home improvements, but don’t qualify for a lower-cost home equity line of credit.
Aside from home improvement and debt consolidation, consumers can select from several uses when applying for a loan through Marcus, including making a major purchase and paying for a vacation.
“By expanding the ways our customers can use our products to fit their needs, we look to continue to help them make smart financial management decisions,” said Abhinav Anand, the head of lending in Goldman’s consumer banking unit.