This Major Bank Will Stop Making Personal Loans. Here's Why

One personal loan option may no longer be on the table for you.

There's a reason personal loans are popular among consumers. Not only do they tend to come with competitive interest rates -- at least compared to credit cards -- but they're also very flexible.

When you take out a personal loan, you can use your proceeds for any purpose. Other loans, such as mortgages, restrict you to buying a specific asset, like a home.

But personal loans can be risky for lenders. That's because these loans are unsecured -- they're not tied to a specific asset that can be used as collateral in case a borrower falls behind on their payments. And also, in some cases, they may not be very profitable. 

Meanwhile, recently, investment banking giant Goldman Sachs announced it's going to stop the practice of offering personal loans to consumers through its Marcus brand. This is part of the banking giant's decision to cut back on consumer-facing products. 

Given these uncertain economic times, this news isn't so surprising. But that doesn't mean all lenders are about to pull out of the personal loan space. 

You can still get a personal loan elsewhere

Losing a big player in the personal loan space could be a blow to consumers, because the more borrowing options there are, the easier it might be to secure an affordable rate. But if you need a personal loan, don't stress out over the fact that Goldman Sachs is pulling the plug on them. There are still plenty of lenders you can apply with. 

In fact, a good bet is to shop around for a personal loan, since each lender ultimately sets its own rate. You should also know that the higher your credit score, the more likely you are to snag a competitive interest rate on a personal loan. But there are plenty of personal loans out there for people with poor credit. If you have a need for money, it pays to do some research and see what options you have.

That said, before you take out a personal loan through a new lender, it could pay to see if an existing lender you have a relationship with offers them. Your bank, for example, might offer personal loans. And if they've had your business for many years, that could work to your advantage. So while it's a good idea to shop around for a personal loan, starting off with an institution you're familiar with could be a good bet.

What to do if you have a personal loan through Marcus by Goldman Sachs

Going forward, you may not be able to take out a personal loan through Marcus by Goldman Sachs. But what if you have one already? Rest assured that despite the wrap-up of the bank's personal loan business, your balance isn't going to be magically forgiven. You should expect to still have to make good on that loan. However, whether your loan is sold or transferred elsewhere is yet to be determined.

The best thing you can do is wait to hear from your lender. They'll tell you what to do in light of this change.