Since its launch in mid- 1997, E*Loan has consistently had one of the best online lending sites. Right now, it suffers from www.Amazon.com bloat with 6 major areas, 6 tabs across the top, rate tables down the right side, and half a dozen other sales messages tossed in the mix. But if you can get past the home page, each major tabbed area is a work of art.

 

The Company

E-Loan 355 employees $2.1 billion originated (‘00)* 5875 Arnold Road, Bldg. 300 Dublin, CA 94568 (925) 241-2400 www.eloan.com * $1.2 billion in mortgages, $860 million in auto loans; includes referrals

We have long admired E-Loan. Had we been giving out Best of the Web awards when it launched in mid-1997, it would have been a winner.  

Even though the company has been a first-mover and innovator for nearly four years, its anemic stock performance has cast a cloud over most of its accomplishments, another victim of the irrational exuberance of 1998 and 1999. Its stock has traded around the magic delisting value of $1 per share for the last six months, as the company posted losses of $73 million in 1999 and $92 million in 2000.

But E-Loan may have turned the corner financially. Although it reported a net loss of $16.4 million for in Q1 2001, on a pro-forma cash-flow basis, its loss was only $3.2 million, and the company is predicting a break-even (cash flow) quarter in Q4 2001. Thanks to the refi boon, E-Loan continues to grow its revenue, booking $36 million in 2000 vs. $22 million in 1999. On April 26, after announcing $16.4 million in Q1 2001 revenues, the company predicted revenues would nearly double in 2001 to a total of $67 million. During Q1 2001, the company closed 18,500 loans with a total volume of $890 million.

table 1

Gomez Scores: E-Loan vs. IndyMac

Spring 2001

Criteria	Score	Rank	IndyMac Score
Ease of Use	6.70	7	8.81
Customer Confidence	3.80	6	4.95
On-Site Resources	7.15	3	5.88
Relationship Services	3.64	11	8.35
Composite Scores
Overall	5.02	5	6.59
Rate Hunter	4.79	7	7.02
One-Stop Home Buyer	4.26	8	6.51
Novice Home Buyer	4.80	6	5.95

Source: Gomez Advisors, www.gomez.com , 5/15/01

 

table 2

E-Loan’s Best of the Web 2001 Features

Feature	Description
Refinance analysis	For the next few years at least, online mortgage lenders will live or die based on how effectively they sell mortgage refinances. The refinance calculator/worksheet is the starting point for many refinance shoppers; and E-Loan excels in this area with three different ways to start the analysis. Its tools are sophisticated and well integrated with its rate comparison and online application. Our only criticism is that the output is a bit too complicated for the average non-MBA shopper.
Personalized loan analysis, MyEloan	E-Loan is ahead of the pack in the way it makes users feel like they are getting a personalized, targeted rate/loan quote.
Free credit evaluation based on actual credit bureau report and score	E-Loan has been pushing the envelope, and credit bureau rules, for more than a year, as it worked to add credit bureau score analysis to its Web site; it finally succeeded earlier this year with a proprietary score that is free and relatively easy for users to understand. E-Loan also provides good advice for improving credit scores, such as moving balances to unused cards, so that no single card has more than 50% of its line utilized.
Frequent flyer mile tie-ins	As far as promotions go, it’s hard to beat frequent flyer miles. Airline brands are well recognized and free tickets are popular across just about every online demographic.
Email integration	Not only does the company do a good job handling rate surfers, it maintains its grip on the lookers by continuing to send personalized rate updates via email.
Express Loan option	E-Loan offers an abbreviated application for individuals with excellent credit.

 

table 3

E-Loan Originations by Type

Q1 2001 vs. Q4 2000

Source: E-Loan, 5/01                 *Excludes non-cash items         **HEQ revenue is included in the mortgage category

 

After registering, we now have a “personalized Web page,” the core of which is the rates section. After entering details of our current home value and mortgage-rate target, it shows current rates and whether our target is met. You can see that our 30-year mortgage target price has been met.

 

 
 

 

E-Loan does a great job keeping its toll-free help line visible throughout the process.

 

 

A pop-up window upon entering the Refinance area provides timely reinforcement for those considering a refi: an April 21 quote from the Washington Post plus copy that says, “Rates are near 30-month loans,” and “Is refinancing right for you?”

 

Refi shoppers can start in one of three ways depending on how confident they are in the process:

Goal:	Go to:
Beat my current rate		Refinance Review
Recommend the best loan for me		Recommendation
Search for a specific product		Search Rates

 

 

Results from refinance analysis. All the terms are clearly compiled and the savings highlighted in a different color. Users select links to learn why the loan is superior, what the closing costs are, and loan details. The top portion of the screen allows users to sign up for a rate alert with a choice of receiving it as frequently as daily or as infrequently of every 2 weeks.

 

Why this loan is better” shows 3  sets of tables/graphs:

• Forecast rate comparisons
• Periodic payments, points, and closing costs
• Present value payments, points, and closing costs

 

 

Results from rate search (top half of page). Note the box with the following rotating text:

No lender fees. Nothing hidden. Just a great rate!

 

 

 

Results from rate search (bottom half of page). Note the money back guarantee.

 

Credit Score (page 1): It took just 3.5 minutes to set up a new account, be authenticated, and see my credit score.

 

Note to your Webmaster

This is how to handle one of the most sensitive items submitted over the Web, social security number. Mask the number with asterisks in the same way you do for passwords. And do something E-Loan neglected, have users enter it twice for accuracy. This is a simple usability improvement that will pay for itself a thousand times over with a higher application-completion rate.

 

Credit Score (page 2): Account authentication requires the user to input two account numbers which must match those found in their credit bureau file.

 

 

 

 

 
 

Credit Score Results (page 1): A numerical credit score is provided, along with a graphical representation and percentile rank against the U.S. population. The score is NOT from one of the three major bureaus, but rather a similar one derived by CreditXpert using a proprietary algorithm.

 

 

Credit Score Results (page 2a):
E-Loan also provides a detailed explanation of why your score was less than perfect, and useful advice on how to improve it. In our case, we received the very actionable suggestion to pay down or transfer balances from one of our credit cards that was more than 49% utilized.

 

Credit Score Results (page 2b):
E-Loan details factors that caused your score to be higher or lower.

 

 

 

E-Loan uses third parties to handle credit card and commercial financing. LiveCapital handles business credit needs and Providian has the credit card relationship.

 

E-Loan offers two incentives on purchase mortgages (not applicable to refinances):

• United Airlines miles, 1,250 miles per $10,000 borrowed; that amounts to a free ticket for each $200,000 borrowed.
• Appraisal fee rebate (up to $500 value, credited at closing). This discount is designed to motivate prospects to stop rate shopping and move forward. Applicants only earn the rebate if they order an appraisal within 3 days of applying (also must pay by credit card).

 

Like E*Trade Mortgage, E-Loan offers home value reports, although the service wasn’t working when we tried (5/29/01).

 

 

E-Loan provides an Express Loan option for those with exceptional credit. But it’s not particularly well integrated into the loan process. We missed it the first few times through the Web site. The option was introduced in Q2 2001, and accounted for 20% of applications during that first quarter.

 

 

E-Loan’s Email Rate Update

 

Date: Sun, 8 Jul 2001 11:28:46 -0700 (PDT)
From: E-LOAN  mortgagemonitor@eloan.com
To: jim@netbanker.com
Subject: E-LOAN Alert: We can save you $26421 on your mortgage.

On May 23 2001, you asked E-LOAN to monitor the mortgage market to find a loan that would save you at least $1000 over the next 10 years. A loan that meets this criteria is now available. Here’s what our database of hundreds of products showed as of Jul 8 2001 for your loan amount of $350,000.

Loan Type           Rate           Points/(Rebate)          APR

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5 Year Fixed     6.250%         1.811                    6.390%   

5 Year Fixed     6.625%         0.708                    6.625%   

5 Year Fixed     7.000%         -0.159                   7.000%   

5 Year Fixed     5.625%         3.978                    6.319%   

3 Year ARM      5.500%         2.085                    6.169%   

3 Year ARM      5.625%         1.841                    6.178%   

7 Year Fixed     6.750%         1.543                    6.750%   

7 Year Fixed     6.250%         3.699                    6.567%   

7 Year Fixed     7.000%         0.737                    7.000%   

 

To take advantage of this great loan, go to www.eloan.com , search for todays up to the minute rates and complete the streamlined online application. Your personal loan consultant will call you with a credit decision and give you the opportunity to lock the interest rate at that time. Your loan consultant will then be your single point of contact throughout the loan process.  And of course you can monitor your loan’ progress at your convenience through your password-protected E-Track account, available online any time.

To change your Mortgage Monitor settings or to unsubscribe from this

email, please visit www.eloan.com/cgi-bin/monitorinput.  From there you

can re-submit your loan comparison information or use the delete function to be unsubscribed from this email.

E-LOAN: A better way to get a home loan.

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Please note that interest rates may change daily and that today’s rates are subject to change at any time in response to market fluctuations.

This is not an offer to enter into an interest lock-in agreement.

E-LOAN is an Equal Housing Lender

Source: E-Loan, 7/8/01