Chase Manhattan Bank has become the latest institution to join Lending Tree, a fast-growing Internet-based loan service.

Thirty-two lenders now solicit applications through Lending Tree's Web site, which matches applicants with as many as four loan offers. The Charlotte, N.C., Internet company, which will be a year old in July, expects another 14 lenders to join this month.

Chase and other Lending Tree participants-including Citigroup, Bank One Corp., and PNC Bank Corp.-are vying for pieces of a rapidly growing market.

Forrester Research of Cambridge, Mass., recently estimated that 10% of all mortgages would be captured on-line by 2002. It also predicted that 8.9 million consumer loans and credit card accounts would be granted over the Internet by 2003, totaling more than $167 billion of receivables.

Chase initially is offering an unsecured personal line of credit through the Web site, with the aim of increasing the product's visibility, said John M. Collins, a Chase vice president. "The Internet offers significant opportunities to sell consumer loan products," he said.

Some observers fret that Internet loan networks such as Lending Tree could reduce relationships with customers to nothing more than a price war.

James P. Punishill, an on-line financial services analyst at Forrester, said Internet lending services will cut out price inefficiencies in the long run. "As the technology matures, the service will move from a standard product to a customized product and then it won't be about the pricing," he said.

Lending Tree got more than 1,000 applications a day in February, or demand of about $2.2 billion for the month, said Douglas R. Lebda, the company's founder and chief executive officer.

Applications also are beginning to flow through Internet gateway sites with which Lending Tree has established relationships.

Last week, Bloomberg.com, which has 3.8 million users, joined Snap.com, an NBC subsidiary, in setting up a cobranded loan center with Lending Tree. Mitchell York, Lending Tree's president, said the company is looking to establish similar centers with other portals.

Mr. Lebda contended that banks can process loans more cheaply through Lending Tree. Lenders pay a nominal fee for Internet delivery of their offers. When a loan closes, they pay another fee, ranging from the tens of dollars up to a few hundred dollars, Mr. Lebda said.

Lending Tree can absorb much of a lender's direct marketing costs, he said. The company plans to spend more than $10 million on advertising this year.

About 30% of mortgages applied for through Lending Tree are funded, as are about 65% of personal and home equity loans, Mr. Lebda said. Credit cards have close to a 100% approval rate.

Forrester is urging that lenders jump aboard the on-line bandwagon. Latecomers probably will find themselves spending more to enter the market but achieve lower returns, the firm said.

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