CHARLOTTE, N.C., April 14, 2014 /PRNewswire/ -- LendingTree, the nation's leading online source for competitive loan now provides consumers a more competitive marketplace for personal loans. Continuing to grow its network of personal loan providers, LendingTree is able to provide consumers with customized, real-time quotes from multiple lenders.
In 2013, the total annual market for personal loans was roughly $11 billion and in Q1 2014, the space has experienced a 13% growth. As profits from mortgage originations decline, it is expected that personal loans will gain popularity, especially among non-traditional lending institutions.
In February, 2014, consumer borrowing increased to a seasonally adjusted annual rate of $16.5 billion, up from $13.8 billion according to the Federal Reserve. Consumer debt has risen every month since August 2011, showing consumers are having the confidence to borrow again after the financial crisis.
"As banks abandon the unsecured consumer credit space because of business priorities and regulations, new platforms are on the rise to fill the void," said Doug Lebda, founder and CEO of LendingTree. "Credit was virtually frozen at the height of the recession but increased money supply has expanded credit rapidly over the past few years. Consumers are finding uncollateralized personal loans to pay off revolving debt like credit cards at lower interest rates in this credit expansion cycle. LendingTree's personal loan marketplace provides consumers more competition and more options from both peer-to-peer and more traditional lenders."
Personal loans enable borrowers with varying credit to quickly gain access to cash, usually in less than one week. In the first quarter of 2014, almost 40% of LendingTree's personal loan customers intended to use the personal loan for debt consolidation, followed by 10.7% for credit card balance transfers and 6.1% for home improvements. Additional loan purposes include a major purchase (5.1%), moving and relocation (3.7%), car financing (3.1%), and 22.1% stating loan purposes fall into the 'other' category.
"Consumers are becoming increasingly aware of alternative methods to obtain uncollateralized loans, and are flocking to internet sites for lower rates and quick turnaround times," said Nikul Patel, Chief Product Officer at LendingTree. "We've been seeing tremendous interest from our customers in the personal loan space to get offers from multiple lenders, including peer-to-peer lending marketplaces. As lenders are competing to gain business, we see downward pressure on interest rates offered in most of the credit categories."
Personal loan interest rates can vary from 6% to 35% depending on credit, loan amount , term, financial institution and other factors. The chart below shows median personal loan rates offered to LendingTree customers in the first quarter.
About LendingTree, LLC LendingTree, LLC is the nation's leading online source for competitive home loan offers, empowering consumers during the mortgage, refinance or auto loan process. 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 30 million loan requests and $214 billion in closed loan transactions. LendingTree provides access to lenders offering mortgages and refinance loans, home equity loans/lines of credit, and more. LendingTree, LLC is a subsidiary of Tree.com, Inc. (NASDAQ: TREE). For more information go to www.lendingtree.com, dial 800-555-TREE, join our Facebook page and/or follow us on Twitter @LendingTree.