Monday, August 12, 2013

LendingTree jumps into consumer loans

LendingTree has created a new platform to serve up personal loan offers to customers coming to its website, hoping to tap into the burgeoning sector as families become more willing to take on more non-mortgage debt.

The company, which is the best-known part of Charlotte-based, primarily is a lead-generation company for mortgage lenders. Customers visit the website, plug in some financial details, and then receive loan offers from several different banks.

Personal loans are not secured by any collateral and are typically used from anything from debt consolidations or vacations. Interest rates are generally above 10 percent, according to Fed data.

They're growing more popular for both banks and consumers, LendingTree says.

"We see significant growth in the personal loan space as financial institutions are increasing their appetite for risk on uncollateralized loans and peer-to-peer lending fuels a new kind of investor," Chief Product Officer Nikul Patel said in a statement

To the latter part, the peer-to-peer lender getting perhaps the most press lately is Lending Club, the San Francisco-based online lender that counts former Treasury secretary Larry Summers among its directors. The company took less than a year to grow from $1 billion to $2 billion in volume, and Google took a small stake in the company in May.


Genny said...

Debtors prefer personal loans since it's easier to apply for and be approved. At the same time, it has lower interest rates. This can be very helpful if they want to get a good credit score, or pay their loans in a short period. Through personal loans, they can easily gather enough funds to buy their new house. They can also avoid long term payments of mortgages.

Genny Stutesman