Need a loan to buy an iPhone? Goldman Sachs might offer one someday

The $999 price tag might be scaring potential iPhone buyers away. But Goldman Sachs might offer help for that one day.

Goldman Sachs is in talks with Apple to offer financing to shoppers buying iPhones, Apple Watches and other products at a lower interest rate than that of most credit cards, the Wall Street Journal reported Wednesday.

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The talks between the two companies are still early and can fall apart, according to the Wall Street Journal. But if successful, the financing offer can provide new lifelines for both companies.

In the past two years, Goldman Sachs has been pivoting to more consumer-based banking as its traditional investment banking has slumped. In 2016, Goldman Sachs launched its consumer division, Marcus, which allows consumers to refinance their credit card debt, and is working on ways to provide financing loans at the point of sale of a product.

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Whereas main credit cards may carry 20 percent interest with late fees, Marcus’s average interest rates hovered around 12 percent, according to the Journal. Still a growing division, Marcus — and Goldman Sachs — are looking to partner with big retailers such as Apple.

For Apple, Goldman Sachs’ financing deal may encourage iPhone users to upgrade to the iPhone X and its latest models in the future. IPhone users are holding onto their phones longer than in the past in certain markets including the United States, said Apple CEO Tim Cook during the company’s most recent earnings call last week.

Goldman Sachs might take over a part of Apple’s existing iPhone upgrade program, which allows iPhone users to upgrade every year with no interest by paying a monthly payment, according to the Journal. Through the upgrade program, a user currently pays $49.91 a month for a 64 gigabyte iPhone X with AppleCare+ coverage included.

The upgrade program is currently run through Citizens Financial Group, a Rhode Island-based bank. It is unclear what will happen to current outstanding loans made through the iPhone upgrade program should Goldman Sachs take over it, according to the Journal.

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