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Here’s What You Need about LendingTree

by Alan Daniel

If you haven’t heard of Lending Tree, it’s a business with an interesting story. To start, it’s not a lending business or financial firm. It’s more of a data company. See, Lending Tree came about because of an issue that an accountant, Lebda had as he sought to purchase his starter home.

But you know how finding a home is, it is far from easy. It can get even more difficult if you are quite selective in your home. But after you get over that hurdle, you have to deal with the financing of the property. That’s where Doug ran into a significant problem. He found that it was hard to obtain the right loan or mortgage to finance the house.

He went to various financial institutions, sought various offers, and talked with many representatives after filling out the paperwork. It wasn’t fun at all and took quite a bit of time. The crazy part was this was a financial accountant. If the process was that difficult for an account, how difficult could it be for other people with different types of professions?

Lebda had an idea that formed out of this suffering and miserable experience. He thought about how he could improve the process and increase the quality of life for potential customers. He realized that he could make it more simple by making a way to have banks trip over themselves to work with interested consumers. He wanted to make it to where banks and financial institutions cared for consumers and streamlined the process for customers. 

This new paradigm would make it to where customers didn’t have to spend quite a bit of time and money to obtain the right loan opportunity for their needs.

That is how he came up with LendingTree in mid 1996. At a time when the internet was becoming more interesting, he was able to capitalize on the growing trend, and present a solution that would provide value to many in the years to come.

Now, two years later, LendingTree, in 1998, would serve a national audience. The firm and its solutions aim to empower the consumer and provide them with options as they search for funding. Instead of running  from one place to the other, consumers could go to one place, enter their information and obtain deals that could work for them. All it would take was one simple form and a world of loan opportunity could open up.

LendingTree has worked with various borrowers and lenders to bring “consumers with choice, convenience and value.” Further, it could provide lenders with the ability to meet the needs of a select consumers.

Important Events in LendingTree History

A few years later in 2003, LendingTree LLC would find itself under the umbrella of IAC, under the watchful eye of Barry Diller and his management team. The firm would be among many other businesses that ranged from Ask.com to Match.com.

The firm outgrew the IAC stable and became a part of Tree.com which offered several similar services. Then in 2014, it reverted back to LendingTree and had several product loan options.

Many lenders are now on the LendingTree platform. These lenders range from the regional, the local, and others. These various lenders that are a part of the network enabled LendingTree to provide diverse options to obtain various financial solutions.

That means that consumers can take advantage of home loans, personal loans, financial deposit accounts, other consumer credit, and even insurance products among various other financial options. The organization seeks to add more products to its hub regularly.

How does LendingTree make money?

LendingTree earns money by enabling various businesses to stay on its network to provide their business. LendingTree aggregates the information, provides it to institutions, facilitates the deal, allowing users to get the right offer. 

For a portion of its product matchmaking, ranging from consumer credit (cards) to financial accounts (deposits) the firm earns when a user makes a purchase or becomes a customer of a service.

As such, LendingTree operates free to the consumer. It charges no fees to consumers and will not add costs.

LendingTree’s revenues have increased from $617 million to $1.1B before declining to $909.9M in 2020. The firm also lost $48M in 2020.

LendingTree Complaints and Competitors

The firm has competition that ranges from individual banking organizations, to modern lenders that range from QuickenLoans, Zillow in mortgages, to Rocket Mortgage, Parlend, and other services.

But complaints around LendingTree focus in on the fact that it may absorb consumer information and sell it to all lenders, As such, the consumer may continue to receive calls from bankers and lending institutions for quite a while for offers that do not meet their needs.

Is that always, the case? It can’t be, the firm would not be able to last if it had poor consumer experiences en masse.

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