One-stop loan shopping: some rate-shopping sites are a tease. These can save you time

Kiplinger's Personal Finance Magazine, Sept, 1998 by Joan Goldwasser

When you want to find a low-cost loan without talking to a dozen loan officers, fire up your modem. Rate-shopping sites on the Internet may not pinpoint the rock-bottom deal in town, but the best of them will quickly steer you to local lenders with low rates.

We scouted for auto loans and home-equity lines of credit at four comprehensive rate-shopping sites, all of which are free and quote rates on many kinds of loans, including credit cards and mortgages. Our favorite is RateNet (www.rate.net), which surveys 11,000 lenders--including banks, credit unions and brokers--in 175 markets.

For each locale, RateNet shows you the ten best rates and how each rate ranks among all similar loans nationwide. In South Carolina, for example, the lowest rate in July on a four-year new-car loan (6.9%) was the 15th-best rate for that kind of loan in the country. You can also view the ten lowest rates nationwide (Gesa Credit Union, in Richland, Wash., offered the country's lowest-cost car loan at 6.35%). Each listing includes a financial, strength rating for the lender, plus a phone number and sometimes a link to an online application.

We also like Bank Rate Monitor's site (www. bankrate.com), which surveys 2,500 lenders in 125 markets for rates on auto loans, home-equity loans and lines of credit and personal loans. (Bank Rate Monitor provides the rates for our tables, at right, and for Kiplinger Online.) In most locations you'll see ten or more rate quotes, though in a few cases we found as few as three. The lowest quoted rate on a four-year new-car loan in South Carolina was 7.25%, still well below the 8.63% national average on the day we shopped.

The other rate services we visited were less helpful. BanxQuote (www.banxquote.com) featured rates from its advertisers most prominently, along with a small sampling of rates from big lenders such as Wells Fargo and First Union. And GetSmart (www.getsmart.com) was little more than a lead generator for lenders. To get information on home-equity rates, for instance, you must first provide your name, address, annual income and other financial details. For automobile loans, you must enter your driver's-license and social security numbers. Even then, you get only the name of a recommended lender--and a promise that a salesperson will call with details. That's hardly an improvement over shopping by phone.

RELATED ARTICLE: Best Deals in Credit Cards

Low-interest gold cards Best if you carry a balance

                                                     CASH-ADVANCE
ISSUER                    RATE    INDEX/MARGIN       RATE/FEE(C)

Pulaski Bank & Trust      7.99%   discount rate(*)
                                  + 2.99             7.99%/none
Huntington National       9.5     prime + 1            9.5/2%
Simmons First National    9.9     discount rate(*)
                                  + 4.9               9.9/none
Central Carolina (Ga.)   11       prime + 2.5          11/2
AFBA Industrial          11       prime + 2.5          11/2

                         ANNUAL     TELEPHONE
ISSUER                    FEE         NUMBER

Pulaski Bank & Trust     $50      800-980-2265
Huntington National       49      800-480-2265
Simmons First National    50      800-636-5151
Central Carolina (Ga.)    20      800-672-2539
AFBA Industrial           35      800-776-2265

No-fee gold cards Best if you usually pay the balance each month

                       INTRO                 INTRO RATE
ISSUER                 RATE    FULL RATE        LASTS

AFBA Industrial         8.5%   prime + 2.9   six months
Huntington National     9.5    prime + 4.9   six months
Pullman Bank & Trust   11.5    prime + 3         -
USAA Savings           12.4    prime + 3.9       -
Amalgamated            13      prime + 4.5       -

                       CASH-ADVANCE   GRACE       TELEPHONE
ISSUER                 RATE/FEE(c)    PERIOD       NUMBER

AFBA Industrial        11.4%/2%       25 days   800-776-2265
Huntington National     13.4/2        25 days   800-480-2265
Pullman Bank & Trust    11.5/2        25 days   800-785-5626
USAA Savings           12.4/none      25 days   800-922-9092
Amalgamated               13/2        25 days   800-723-0303

(c) Cash advances frequently have no grace period; additional fees may be charged.

(*) 5% as of July 17

Source for Loan Rates and Credit Cards: Bank Rate Monitor, N. Palm Beach, Fla.