Loan Comparison Savings
Recent Study Finds Comparing Multiple Loan Offers Can Save Borrowers Significant Money
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Borrowers who shop around for loans can save significantly over time, according to a recent LendingTree study. The research found that comparing multiple lenders' rates and fees helps borrowers avoid overpaying. Interest rates vary from a low of 5.93% to a high of 6.72% across lenders, creating substantial savings opportunities for those who do their homework.
The Power of Comparison Shopping
Shopping around isn't just smart—it's essential. LendingTree's study shows that the difference between the lowest and highest interest rates is 0.79 percentage points. Over a 30-year loan, this gap translates to thousands of dollars in extra payments. Most borrowers accept the first offer they get without checking alternatives.
Checking rates and fees from multiple lenders takes a few hours but pays off big. Borrowers who compare just three to five offers typically find better terms than those who use one lender. LendingTree recommends getting quotes from banks, credit unions, and online lenders for the best results.
Hawaii Homeowners See the Biggest Savings Potential
Savings vary dramatically by state, according to LendingTree's analysis. Hawaii leads the nation, followed by New Jersey and California. These states show the widest gaps between top and bottom rates, meaning borrowers there have the most to gain from shopping around.
On the flip side, New York offers the least savings potential, with West Virginia and Mississippi close behind. This doesn't mean borrowers in these states should skip shopping—it means they need to be even more diligent to find the best deals available.
How to Shop Smarter for Loans
Start by checking your credit score. Better credit typically unlocks lower rates. Then request quotes from at least three different lenders. LendingTree recommends getting quotes within a two-week window so your credit inquiries count as one check rather than multiple hits.
Compare more than just the interest rate. Look at fees, loan terms, and total cost over the life of the loan. A lower rate with high fees might cost more than a slightly higher rate with minimal fees. Use online calculators to compare total payments across different offers.
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