CHARLOTTE, N.C., March 24, 2015 /PRNewswire/ -- LendingTree,
the nation's leading online loan marketplace, has launched an
ongoing study to track the range of Annual Percentage Rates (APRs)
on personal loans offered to prospective borrowers on its
marketplace, highlighting the money-saving benefits of comparison
shopping for loan products. In February
2015, borrowers with a credit score of over 700, seeking a
$10,000, 36-month personal loan who
received offers from at least two lenders experienced an average
interest rate differential of 5.70 percentage points, or 570 basis
points, between the highest and lowest offers presented to them in
their My LendingTree accounts.
"Lenders often have their own proprietary methods of evaluating
a borrower's credit risk, resulting in varied loan pricing for any
individual," said Doug Lebda,
founder and CEO of LendingTree. "This risk-based pricing is most
evident in the personal loan market. While a person's credit
score may weigh heavily in one lender's rate, income or outstanding
debt may be a primary criteria for another lender. For
consumers, it's important to know that there is variability in
interest rates from one lender to the next and even more important
to comparison shop for loans. Otherwise, you could be paying
thousands of dollars more in interest over the life of the
loan."
According to LendingTree, borrowers with good credit in search
of a $10,000, 36-month personal loan
received a variety of offers from peer-to-peer and traditional
lenders on the network, some with APRs as low as 6.63%. The average
of the lowest APRs offered to borrowers within this segment was
11.739%, and the average of the highest APRs offered was 17.443%,
which translates into an average potential savings of $1,002.17 over the life of the loan.
To illustrate the potential savings of loan comparison shopping,
the following offer data was presented to an actual LendingTree
customer in February 2015:
Offered Loan Amount: $10,000
Credit Score: 722
APR Offer A: 8.13%
APR Offer B: 13.84%
APR Differential: 5.71 percentage points
The chart below shows the monthly payments for each option, the
annual cost and the total interest paid over the life of each
loan.
$10,000 Loan
Amount
|
Offer
1:
8.13%
APR
|
Offer
2:
13.84%
APR
|
Difference:
5.71
points
|
Monthly
payment
|
$313.96/mo.
|
$341.00/mo.
|
$22.30/mo.
|
Annual
Cost
|
$3,767.52/yr.
|
$4,092.00/yr.
|
$267.60/yr.
|
Total borrowing
cost
over 36 months
|
$11,302.56
|
$12,276.00
|
$973.44
|
In this example, the 5.71 percentage point difference in APRs
offered translates into a potential savings of $973.44 over the 36 month life of the loan.
By completing the online form, consumers are able to gain access
to LendingTree's personal loan marketplace and the growing network
of personal loan lenders, including both peer-to-peer and
traditional lenders. In addition, the all-new My LendingTree
experience provides borrowers with completely free credit scores
updated monthly, along with analysis and insights into their
personal credit and borrowing profiles that impact the offers
available to them from lenders. Because personal loan rates
offered to borrowers can vary greatly among lenders, sometimes by
more than 10 percentage points, there are opportunities to
save significantly by comparison shopping and receiving multiple
loan offers.
For more information, tools and resources, all completely free
of charge to consumers, please visit
http://www.lendingtree.com/personal-loans-index.
About LendingTree, LLC
LendingTree, LLC is the nation's leading online loan marketplace,
empowering consumers as they comparison-shop across a full suite of
loan and credit-based offerings. LendingTree provides an
online marketplace which connects consumers with multiple lenders
that compete for their business, as well as an array of online
tools and information to help consumers find the best loan. Since
inception, LendingTree has facilitated more than 32 million loan
requests. LendingTree provides access to lenders offering home
loans, personal loans home equity loans/lines of credit, auto loans
and more. LendingTree, LLC is a subsidiary of Tree.com,
Inc. For more information go
to www.lendingtree.com , dial 800-555-TREE, join
our Facebook page and/or follow us on
Twitter @LendingTree .
MEDIA CONTACT:
Megan
Greuling
(704) 943-8208
Megan.Greuling@tree.com
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SOURCE LendingTree