RealTime IT News

E-Loan Out To Claim Market Share in Australia

The online home loan mortgage broking operation E-Loan has launched in Sydney, promising to be a single point for Australians to compare and apply for loans without ever contacting the lending institution.

The site has been developed to allow consumers to make a more informed decision about the home loan they agree to. It offers 140 different products from 11 lenders, from which users can compare loans according to their specific requirements.

Users can browse E-Loan anonymously and for free with its E-Match search engine, which drills into the site's product database according to the field entries. They can then compare aspects such as interest rates, terms and fees.

E-Match has been audited by PricewaterhouseCoopers to ensure its sorting process is independent and unbiased, said E-Loan chief executive John McGee.

If the user wants more information on a loan or wants to apply, they can submit personal information such as name, age and marital and employment status via an online form in a secure page on the site.

The site has also developed calculators to estimate loan-related costs such as stamp duty, and more are set to launch this year. Users can monitor application processing with the online progress report tool E-Track, and with a customised email news and alert service called E-Watch.

E-Loan retains the application data it collects in eXtensible Markup Language (XML) format using Style Sheets. Currently lender application forms and supporting documents are collected and retained in hard copy, however the company intends to change this so that it stores documents in Portable Document Format (PDF).

To maintain user privacy, the site does not issue cookies, and destroys application information it has when the application process is complete, McGee said.

While E-Loan represents only one quarter of Australian lenders, McGee said that these lenders account for around half of all loans signed in Australia.

"Around one percent of all home loans in Australia are transacted online," McGee said. "Australians have taken to basic financial transactions on the Internet with online banking and stock trading. It's a small leap of faith to take larger transactions online."

Mr McGee was guarded about E-Loan's consumer and revenue targets, however he expected the site to have 10 percent market penetration over the next four to five years.

This growth will be driven by a marketing campaign that will promote the E-Loan brand on television, in print, on billboards and other outdoor advertising spaces, and online.

While users pay nothing to browse the site, they still pay the usual fees to the lender they select. E-Loan draws revenue from fees it charges lenders for including their products.

E-Loan is a joint venture between four-year-old US parent company E-Loan and eVentures, which was formed by e-commerce venture capital firm SOFTBANK and the News Corporation Internet company epartners.

Although E-Loan Australia has been established to independently deal with the domestic market, its business model has been shaped after that of the US E-Loan, which now has 2.5 million users.

The E-Loan format has also recently been launched in the United Kingdom, and is set to launch in New Zealand.