One cannot discuss loan products without thinking about rates. It’s often the focus of loan advertisements and is usually the first question out of the mouth of prospective borrowers. On the Web, the majority of credit come-ons, especially for credit cards, feature single-digit teaser rates (see buttons above). This is understandable considering that the primary loan-related use of the Web is to research rates.

But the borrower’s decision is usually more complex than determining who has the lowest rate, especially with more complex products such as mortgages and home equity loans, to see how one bank moves the focus away from rates). Forrester found that among online researchers, rate mattered more than brand, brick-and-mortar presence, and speed of approval. But even among online shoppers, the loan rate didn’t overshadow other items as much as one might think. Rate came in about 33% more influential than each of the other three items. In other words, rate is very important, but it’s just one of many factors most consumers consider. Also important are line size, turnaround time, reputation of the lender, and other intangibles. The banners above represent some of the other benefits touted online.

To gain perspective, stop for a moment and think like a consumer. For the sake of discussion, pretend you are 28, newly married, and thinking about buying a house within the next few years. Other than a credit card or two and a dealer-financed car loan, you have little knowledge of the loan process. Table 1 below outlines the decision process you would face as you tried to get your arms around the daunting process of purchasing your first home.

Table 1

The Mortgage Application Experience

Source: Online Banking Report, 11/000