Marcus is the personal lending service offered by Goldman Sachs. Unlike some of its competitors, Marcus is only for customers with “prime” credit scores (approximately 660 or above) and who have jobs.
Marcus offers credit and debt consolidation up to $30,000 with an APR anywhere from 5.99-22.99% based on the borrower and debt. There are no fees, and rates are fixed for the duration of the loan. That means no origination fees, and no late fees (but if you’re late with a payment your interest rate rises, the life of the loan expands, and your credit score of course suffers).
The scoop: Marcus is a low-cost, no-fee service that can be a great option for customers who qualify. However, Marcus isn’t always the lowest APR option (LightStream often comes in cheaper) so it’s important to shop around first.
Lending Club has become perhaps the most dominant player in the online personal loans business. The minimum required credit score is 600, and the maximum debt-to-income ratio allowed is 40%. A typical APR can range from 4.99-35.89%. The lowest rate is only available to customers with “excellent” credit scores, although the exact number to meet that criterion is not defined.
Lending Club does offer several special features that its competitors don’t, including a joint loan application and a “hardship plan” that allows borrowers who are struggling to pay their bills to make interest-only payments for up to three months.
The scoop: Lending Club’s typical APR is not the lowest of its competitors, and its origination fee of 1-6% of the loan may push some potential customers away. However, the various features offered by Lending Club for those in times of financial hardship combined with its potentially low APR for “excellent” credit scores make it compelling for borrowers on either the very high-end or low-end of credit worthiness, but less so for those in the middle.
BestEgg is a service that focuses on debt consolidation, and its minimum required credit score comes in the middle-to-high-end of the pack, at 640. With a typical APR range of 5.99-29.99% (average is 15%) , it doesn’t particularly stand out in either direction.
However, the main perk of BestEgg comes from its ultra-fast time to funding (generally under 1 day), whereas many other services can take days or even weeks before a borrower gets his or her money.
The scoop: BestEgg doesn’t offer the most competitive rates, nor does it offer some “extras” that its competitors do such as hardship plans and fee exemptions. However, for borrowers with good credit it provides a fast way to receive smaller loans from a trusted service that does not charge prepayment fees.
LightStream is a product of SunTrust bank, and its debt consolidation is a service reserved for only the top borrowers, who have a credit score over 660, several years of credit history and a co-signer. Because of the service’s exclusivity, it offers the lowest typical APR of its competitors, in the range of 2.29-17.49% with autopay. Generally, getting loans at such low rates would require collateral.
LightStream also has a “rate beat” policy in which it guarantees it will beat any competitors rate by 0.10% given the same amount borrowed and term if you show proof of approval. On top of that rate, LightStream has no origination, prepayment or late fees.
The scoop: Combining its low APR with its 0 fee policy, LightStream is generally the most affordable option for borrowers with excellent credit. However, the high exclusivity of the service makes it inaccessible to many potential borrowers.
Prosper is not a traditional credit card consolidation service and doesn’t loan its own money. Rather, it is a “matchmaking” service that matches borrowers with investors who are willing to fund the payment of their loans. The average Prosper borrower has annual income and a credit score well above those of most of its competitors–at $86,000 and 710 respectively. Its average APR ranges from 5.99-36%.
Because of its structure, Prosper tends to provide borrowers less flexibility on payment schedules, and charges fairly steep late fees for failed payments.
The scoop: While Prosper’s service is a unique proposition, its rigid payment structure, high fees and relatively high APR makes it a relatively expensive choice for many borrowers. However, Prosper is one of the oldest lenders in the industry and is viewed by many as a safe, trustworthy choice.
Payoff is another service with steep requirements, including a credit score over 60% and multiple years of credit history. With a typical APR of 8-25%, it won’t always be the cheapest option, but it generally won’t be the most expensive option for borrowers who barely meet their requirements either.
Payoff offers more personalization than other services, providing borrowers with a range of tools and resources based on questions they answer about their own financial situation and goals. Additionally, Payoff offers live customer support during business hours.
The scoop: For borrowers who just barely meet its credit requirements, the fact that Payoff caps its APR around 25% can make it a relatively attractive service. Additionally, its live advice and personalization options make the service well-suited to new borrowers and those who may have additional questions about debt consolidation specifically and personal finance generally.