Due to launch in mid-December, the new service will let borrowers name the interest rate, down payment, term of loan, and loan fees they're willing to pay after they provide some basic personal financial information. Lenders can then accept the terms or pass, with an answer promised by Priceline within 48 hours.
In addition to its airline business, which the company says is now running at an annual rate of $60 million, Priceline is testing an online car-buying service in the New York will expand its offerings for hotel rooms to 50 cities, including new vacation resorts.
"Our customers see Priceline as another way to buy," said Paul Breitenbach, senior vice president of marketing. "They couldn't do it without the Internet, but people look at us as alternative." He said Priceline's success in airline tickets indicates that consumers will give up something--in that case, certainty--for a better price.
The mortgage service, being done in cooperation with online lending site Lending Tree, initially will offer first mortgages, refinancing, and home equity lines of credit. Would-be borrowers make a $200 good-faith deposit when they make an offer, with that sum credited toward closing costs. Personal loans are planned later.
Priceline has made a big splash with a pricey national radio ad campaign, which started in the spring, paused over the summer, and then revved up again in September. This week the company announced a $10 million radio and print campaign with actor William Shatner as Priceline's spokesman.
For the airline service, users name the days they want to travel between two cities and how much they're willing to pay, guaranteeing the result with a credit card. Through Priceline's patented technology, airlines must respond within an hour to accept an offer.
Offers that are accepted are generally 20 to 30 percent under the airline's best published rate for advanced purchase, but that varies widely depending on the season or specific travel destinations.
The hotel program, launched last month, booked 1,600 room-nights in its first week. In January, 35 new U.S. cities and resorts will be added to the current 26 cities where consumers can bid for beds.
Future items that Priceline is exploring for its service include consumer electronic devices, long-distance services, rental cars, vacation packages and cruises, insurance, and diamond