E LOAN INC
S-1/A, 1999-06-22
MORTGAGE BANKERS & LOAN CORRESPONDENTS
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<PAGE>   1


     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 22, 1999


                                                      REGISTRATION NO. 333-74945
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------


                                AMENDMENT NO. 3

                                       TO

                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------

                                  E-LOAN, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                            ------------------------

<TABLE>
<S>                                <C>                                <C>
             DELAWARE                             6162                            77-0460084
 (STATE OR OTHER JURISDICTION OF      (PRIMARY STANDARD INDUSTRIAL             (I.R.S. EMPLOYER
  INCORPORATION OR ORGANIZATION)      CLASSIFICATION CODE NUMBER)           IDENTIFICATION NUMBER)
</TABLE>

                          5875 ARNOLD ROAD, SUITE 100
                                DUBLIN, CA 94568
                                 (925) 241-2400
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                            ------------------------

                     CHRIS LARSEN, CHIEF EXECUTIVE OFFICER
                          JANINA PAWLOWSKI, PRESIDENT
                                  E-LOAN, INC.
                          5875 ARNOLD ROAD, SUITE 100
                                DUBLIN, CA 94568
                                 (925) 241-2400
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                             OF AGENT FOR SERVICE)
                            ------------------------

                  PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:

<TABLE>
<S>                                                 <C>
               MARIO M. ROSATI, ESQ.                            DONALD M. KELLER, JR., ESQ.
               ISSAC J. VAUGHN, ESQ.                               JON E. GAVENMAN, ESQ.
      WILSON SONSINI GOODRICH & ROSATI, P.C.                         VENTURE LAW GROUP
                650 PAGE MILL ROAD                              A PROFESSIONAL CORPORATION
                PALO ALTO, CA 94304                                 2800 SAND HILL ROAD
                  (650) 493-9300                                   MENLO PARK, CA 94025
                                                                      (650) 854-4488
</TABLE>

                            ------------------------

        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
                            ------------------------

    If the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), please check the following box.  [ ]

    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.  [ ]

    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.  [ ]

    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.  [ ]

    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.  [ ]

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>   2

The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.


                  SUBJECT TO COMPLETION. DATED JUNE 22, 1999.


                                3,500,000 Shares

                                  E-LOAN, INC.

                                  Common Stock
E-Loan Logo
                             ----------------------

     This is an initial public offering of shares of common stock of E-LOAN,
Inc. Of the 3,500,000 shares of common stock being offered, 3,495,000 shares are
being sold by E-LOAN and 5,000 shares are being sold by a selling stockholder,
the E-LOAN Foundation, a charitable foundation established by E-LOAN and
administered by the Community Foundation Silicon Valley. See "Principal and
Selling Stockholders". E-LOAN will not receive any of the proceeds from the sale
of the shares being sold by the selling stockholder.

     Immediately following and conditioned upon the closing of the initial
public offering, E-LOAN will sell to Forum Holdings, Inc. in a private placement
additional shares of common stock valued at $12,500,000 based on the initial
public offering price less the underwriting discount.

     At the request of E-LOAN, the underwriters have reserved, at the initial
public offering price, up to 300,000 shares of common stock for sale to
individuals designated by E-LOAN who have expressed an interest in purchasing
shares in the offering.

     Prior to the offering, there has been no market for the common stock. It is
currently estimated that the initial public offering price per share will be
between $9.00 and $11.00 per share. The shares of common stock have been
approved for quotation on the Nasdaq National Market under the symbol "EELN",
subject to official notice of issuance.

     SEE "RISK FACTORS" BEGINNING ON PAGE 4 TO READ ABOUT CERTAIN FACTORS YOU
SHOULD CONSIDER BEFORE BUYING SHARES OF THE COMMON STOCK.
                             ----------------------

     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
                             ----------------------

<TABLE>
<CAPTION>
                                                                Per
                                                               Share      Total
                                                              --------   --------
<S>                                                           <C>        <C>
Initial public offering price...............................  $          $
Underwriting discount.......................................  $          $
Proceeds, before expenses, to E-LOAN........................  $          $
Proceeds to selling stockholder.............................  $          $
</TABLE>

     The underwriters may, under the terms of the underwriting agreement,
purchase up to an additional 525,000 shares from E-LOAN at the initial public
offering price less the underwriting discount.

     The underwriters expect to deliver the shares against payment in New York,
New York on             , 1999.
                             ----------------------

GOLDMAN, SACHS & CO.
                           DONALDSON, LUFKIN & JENRETTE

                                                    HAMBRECHT & QUIST


E*TRADE SECURITIES, INC.                                          DLJDIRECT INC.

                             ----------------------
                  Prospectus dated                     , 1999.
<PAGE>   3

                             DESCRIPTION OF ARTWORK

     [Picture of three screen shots of E-LOAN's Internet home page and interior
pages with the heading, "Changing the Mortgage Process."]

     Text at the bottom of the page:

     Traditionally, getting a mortgage has been a frustrating experience for
many consumers. Now, E-LOAN envisions a better way. Founded by two mortgage
brokers, E-LOAN uses the Internet to provide access to thousands of loan
products and detailed comparisons, and to allow customers the convenience of
applying for and tracking their loans online. And, E-LOAN eliminates the loan
agent's commission to save customers money. E-LOAN believes that its technology
and customer service add up to a better way to get a loan. [E-LOAN LOGO]

     E-LOAN is a registered trademark of E-LOAN. All other brand names or
trademarks appearing in this prospectus are the property of their respective
holders.

     The gatefold includes a graphic illustrating the typical customer's path
through the E-LOAN loan process, from the initial search for interest rates
through analyzing and comparing loans, applying for a loan online, tracking the
loan online, closing the loan, and monitoring the loan to determine the optimum
time for refinancing. The graphic is overlaid on a screenshot of E-LOAN's home
page.

     Heading for the graphic: [E-LOAN logo] Changing the mortgage process.

     Text: E-LOAN's vision is to offer customers the best loans at the lowest
cost -- and to help them manage their mortgage as they do their investments. As
the largest part of most consumers' balance sheets, the home mortgage can be
leveraged to lower the overall cost of capital in an individual's portfolio.
E-LOAN's online tools allow customers to compare different types of loans,
forecast their performance in various interest rate scenarios, and create
personalized financial profiles that all combine to help them choose the right
loan. After the loan is closed, they can continue to track the market and
receive automatic notification of savings opportunities through refinancing.

     [The graphical representation begins with a screenshot of E-LOAN's home
page pointing to a screenshot of the Rate Watch function. Each specific function
in the loan process is represented by a screen shot, with captions describing
the functions, which flow around a counterclockwise circle representing the
entire consumer loan process through E-LOAN. The functions and associated
descriptions, aligned next to the screen shots around the circle, are as
follows]:

     Rate Watch: Customers can set up a customized account and be automatically
notified when the product they want is available. [Rate Watch then points to the
next screenshot representing Search for Rates, which marks the customer's entry
point into the circular loan process]:

     Search for Rates: Our rate search delivers the most competitive products
from over 50,000 in our database, in seconds. Or, we can recommend a loan based
on a customer's financial profile. [Search for rates then points to a set of
screen shots moving counterclockwise around the loan process circle]:

     Search Results- Review Costs-Compare Loans: Our web site offers access to
over 70 lenders through brokerage sourcing and direct loan sourcing from capital
markets. Detailed
<PAGE>   4

analyses show which loan is right for an individual's situation [round the
circle to Apply for Loan screenshot]:

     Apply for Loan: Customers complete our easy application entirely online
[around the circle to Lock Through E-Track screenshot]:

     Lock Through E-Track: Through an E-Track account, customers can review all
of their costs prior to closing [around the circle to Close Loan. In the
interior of the circle, connecting the Apply for Loan and Closed Loan screen
shots, is a curved line representing E-LOAN's internal processes. These are
bulleted and labeled in order: Automated Underwriting, Decision Within 24 Hours,
Document Collection/Verification, Appraisal, Funding.]

     [Also in the interior of the circle is a screen shot representing the
E-Track function and a photograph captioned, Julie O., Loan Consultant. The
caption text for this combined graphic reads as follows]: With a personal loan
consultant and a password protected E-Track account, customers can get
up-to-date status on their loan applications anytime.

     [The Close Loan screenshot leads around the circle to a Monitor Mortgage
screenshot, which leads to the final screenshot in the circle, Refinance. The
caption for Refinance is as follows]:

     To help manage a customer's mortgage, E-LOAN automatically notifies them of
opportunities to save money on refinancing. [The circle forms into an arrow
leading from the Refinance screenshot into the Search for Rates screenshot,
indicating that when it is time to refinance, the customer begins a new rate
search and starts around the circle again].
<PAGE>   5

                               PROSPECTUS SUMMARY

     This summary may not contain all of the information that you should
consider before investing in our common stock. You should read the following
summary together with the more detailed information regarding E-LOAN and the
common stock being sold in this offering and our financial statements and notes
to those statements appearing elsewhere in this prospectus. Except as described
in the financial statements or as otherwise specified in this prospectus, all
information in this prospectus: (1) assumes no exercise of the underwriters'
over-allotment option; (2) reflects a three-for-one split of the outstanding
shares of common stock completed in May 1999; (3) reflects the conversion of all
of our outstanding preferred stock into common stock upon the effectiveness of
the registration statement related to this offering; and (4) reflects the
issuance of 1,250,000 shares of common stock in a private placement to close at
the same time as this offering at an assumed public offering price of $10.00.
See "Description of Capital Stock" and "Underwriting".

                                  E-LOAN, INC.

     E-LOAN is a leading online provider of mortgages, offering consumers the
ability to obtain the most suitable mortgages from a wide array of lenders at
substantial savings. E-LOAN's easy-to-use website enables borrowers to search
through over 50,000 products provided by over 70 lending sources to find the
most competitively priced loans that match the borrowers' criteria. Borrowers
can analyze and compare loans online as well as receive unbiased loan
recommendations based on their personal criteria and financial characteristics.
E-LOAN offers origination cost savings of over 50% compared to obtaining a
mortgage through traditional mortgage brokers or single source lenders. E-LOAN
achieves these savings primarily by eliminating the commissioned loan agent, who
typically charges an origination fee of 1.25% to 1.5% of the loan amount. By
contrast, E-LOAN's origination fee is 0.625% of the loan amount. E-LOAN provides
complete transaction fulfillment and a high level of service through customer
service representatives assigned to each borrower and the proprietary E-Track
loan monitoring service. E-LOAN is the exclusive mortgage provider for loan
centers that E-LOAN has established with leading websites including Yahoo!,
E*Trade, DLJdirect,Telebank and CBS MarketWatch. In 1998 and the first quarter
of 1999, E-LOAN was the leader in the online mortgage market with approximately
$1 billion and $490 million in closed loans originated, respectively, including
E-LOAN's estimate of closed loan volume from referrals. During these periods,
E-LOAN incurred losses of $11.2 million and $11.4 million, respectively.

                         THE E-LOAN MARKET OPPORTUNITY

     E-LOAN believes that the traditional mortgage origination process is highly
inefficient, which is the result of a fragmented, broker-dominated industry,
paper-intensive processes and a baffling array of mortgage products. This
inefficient process has made obtaining a mortgage a time-consuming, expensive,
inconvenient and unpleasant experience for many consumers. E-LOAN believes an
Internet-based distribution model reduces or eliminates many of these
shortcomings and provides a significant opportunity for an open, centralized and
easy-to-use service with a compelling consumer value proposition. Forrester
Research projects the market for online mortgage originations will grow from
$18.7 billion in 1999 to over $91.2 billion in 2003, representing an increase in
online penetration of the existing market from 1.5% in 1999 to 9.6% in 2003.

     E-LOAN's website enables customers to efficiently search, analyze and
compare mortgage products offered by multiple lenders and apply for, qualify for
and obtain the mortgage that is most compatible with their individual financial
characteristics and borrowing requirements. By offering a large selection of
products from leading lenders, eliminating agent commissions and passing those
savings on to customers, and providing personalized customer service, E-LOAN
provides customers a more streamlined and efficient way to get a home loan.
E-LOAN plans to
                                        1
<PAGE>   6

execute on its strategy of becoming the leading Internet-based provider of
mortgages and debt management services for customers by continuing to build
brand awareness, using technology to bring borrowers and capital markets closer
together and helping customers monitor and manage their debt.

                               E-LOAN FOUNDATION

     In May 1999, E-LOAN established the E-LOAN Foundation, a charitable fund
which is administered by the Community Foundation Silicon Valley. The Community
Foundation Silicon Valley is a third party organization not affiliated with
E-LOAN and no officers or directors of E-LOAN will be involved in the
administration of the E-LOAN Foundation. To capitalize the E-LOAN Foundation,
E-LOAN donated 75,000 shares of common stock to the Community Foundation Silicon
Valley on behalf of the E-LOAN Foundation. All decisions with respect to the
voting of these shares shall be made by the Community Foundation Silicon Valley.
The estimated value of the shares at the time they were donated to the E-LOAN
Foundation was $900,000. E-LOAN has made no other charitable donations. The
E-LOAN Foundation is selling 5,000 shares of common stock in this offering.
Through the Community Foundation Silicon Valley, the E-LOAN Foundation will make
grants to charitable organizations.

                             CORPORATE INFORMATION

     We were incorporated in California in August 1996 and we reincorporated in
Delaware in March 1999. Our principal executive offices are located at 5875
Arnold Road, Suite 100, Dublin, California 94568 and our phone number is (925)
241-2400. Our Internet address is www.eloan.com. The information on our website
is not part of this prospectus.

                                  THE OFFERING

<TABLE>
<S>                                       <C>
Common stock offered by E-LOAN..........  3,495,000 shares
Common stock offered by the selling
  stockholder on behalf of the E-LOAN
  Foundation............................  5,000 shares
Common stock offered in a private
  placement to be closed at the same
  time as this offering.................  1,250,000 shares
Common stock to be outstanding after
  this offering.........................  38,482,403 shares
Use of proceeds.........................  Working capital and general corporate purposes,
                                          including capital expenditures. See "Use of
                                          Proceeds".
Proposed Nasdaq National Market
  symbol................................  "EELN"
</TABLE>

     In addition to the 38,482,403 shares of common stock to be outstanding
after the offering, as of the date of this prospectus, E-LOAN has authorized the
issuance of 11,384,994 additional shares of common stock under its 1997 Stock
Option Plan and 1999 Employee Stock Purchase Plan.

RECENT SALES OF SECURITIES

     Pursuant to a private transaction with 25 of our stockholders on March 23,
1999, Softbank America Inc. purchased an aggregate of 972,732 shares of common
and preferred stock at a per share price of $16.00.

                                        2
<PAGE>   7

                             SUMMARY FINANCIAL DATA
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                         YEAR ENDED
                                        DECEMBER 31,                            THREE MONTHS ENDED (UNAUDITED)
                                  -------------------------   -------------------------------------------------------------------
                                                               MAR. 31,      JUNE 30,      SEPT. 30,     DEC. 31,      MAR. 31,
                                     1997          1998          1998          1998          1998          1998          1999
                                  -----------   -----------   -----------   -----------   -----------   -----------   -----------
<S>                               <C>           <C>           <C>           <C>           <C>           <C>           <C>
Revenues........................  $     1,043   $     6,832   $       527   $     1,233   $     2,051   $     3,021   $     4,802
Operating expenses(1):
  Operations....................        1,319         7,626           779         1,077         2,127         3,643         4,104
  Sales and marketing...........          470         5,642           513           874         2,174         2,081         3,657
  Technology....................          102         1,248           163           371           284           430           481
  General and
    administrative..............          524         2,410           379           436           711           884         1,423
  Amortization of unearned
    compensation................           --         1,251            44           211           296           700         6,554
                                  -----------   -----------   -----------   -----------   -----------   -----------   -----------
    Total operating expenses....        2,415        18,177         1,878         2,969         5,592         7,738        16,219
                                  -----------   -----------   -----------   -----------   -----------   -----------   -----------
Loss from operations............       (1,372)      (11,345)       (1,351)       (1,736)       (3,541)       (4,717)      (11,417)
                                  -----------   -----------   -----------   -----------   -----------   -----------   -----------
Other income, net...............           (2)          173            20            29            26            98            36
Net loss........................  $    (1,374)  $   (11,172)  $    (1,331)  $    (1,707)  $    (3,515)  $    (4,619)  $   (11,381)
                                  ===========   ===========   ===========   ===========   ===========   ===========   ===========
Net loss per share(2):
  Basic and diluted.............  $     (0.12)  $     (0.98)  $     (0.12)  $     (0.15)  $     (0.30)  $     (0.41)  $     (0.94)
                                  ===========   ===========   ===========   ===========   ===========   ===========   ===========
Weighted average number of
  shares outstanding -- basic
  and diluted...................   12,262,032    12,400,284    12,323,258    12,367,871    12,421,801    12,485,599    12,598,378
                                  ===========   ===========   ===========   ===========   ===========   ===========   ===========
Pro forma net loss per
  share(3)......................                $     (0.41)  $     (0.06)  $     (0.07)  $     (0.12)  $     (0.14)  $     (0.36)
Pro forma weighted average
  number of shares
  outstanding(3)................                 27,153,122    22,743,817    23,314,274    29,035,490    33,021,508    33,100,579
</TABLE>



<TABLE>
<CAPTION>
        OPERATING DATA:
<S>                               <C>           <C>           <C>           <C>           <C>           <C>           <C>
Closed loan volume (dollars)
  E-LOAN closed..............................   $   835,318   $   104,943   $   172,108   $   219,232   $   339,035   $   469,817
  Referral closed(4).........................       146,880           135        37,530        56,565        52,650        19,710
                                                -----------   -----------   -----------   -----------   -----------   -----------
  Total......................................   $   982,198   $   105,078   $   209,638   $   275,797   $   391,685   $   489,527
                                                ===========   ===========   ===========   ===========   ===========   ===========
Closed loan volume (loans)
  E-LOAN closed..............................         3,865           447           779         1,004         1,635         2,371
  Referral closed(4).........................         1,086             1           278           418           389           146
                                                -----------   -----------   -----------   -----------   -----------   -----------
  Total......................................         4,951           448         1,057         1,422         2,024         2,517
                                                ===========   ===========   ===========   ===========   ===========   ===========
</TABLE>


     The following table provides a summary of our balance sheet as of March 31,
1999. The pro forma column gives effect to the conversion of all outstanding
shares of preferred stock into 20,493,921 shares of common stock and the
exercise and conversion of a warrant for 53,996 shares of Series D preferred
stock into 161,988 shares of common stock upon the closing of this offering. The
as-adjusted column reflects the issuance of 75,000 shares of common stock to the
selling stockholder, the issuance of 1,250,000 shares of common stock in a
private placement to be closed at the same time as this offering, and the sale
of 3,495,000 shares of common stock in this offering by E-LOAN at an assumed
initial public offering price of $10.00 per share, after deducting the estimated
underwriting discount and offering expenses payable by E-LOAN. See "Use of
Proceeds" and "Capitalization".

<TABLE>
<CAPTION>
                                                                        MARCH 31, 1999 (UNAUDITED)
                                                                ------------------------------------------
                                                                                              PRO FORMA
                                                                 ACTUAL      PRO FORMA       AS ADJUSTED
                                                                --------    ------------    --------------
<S>                                                             <C>         <C>             <C>
BALANCE SHEET DATA:
Mortgage loans held-for-sale (pledged)......................    $ 63,729      $63,729          $ 63,729
Cash and cash equivalents...................................       3,565        4,065            46,974
Total assets................................................      72,962       73,462           116,191
Warehouse lines payable.....................................      60,256       60,256            60,256
Long term obligations.......................................       1,301        1,301             1,301
Mandatorily redeemable preferred stock......................      22,760           --                --
Total stockholders' equity (deficit)........................     (16,505)       6,755            49,484
</TABLE>

- ---------------

(1) For an alternative presentation of operating expenses, see Note 14 of Notes
    to Financial Statements.



(2) Net loss per share includes the accretion for the Series C and Series D
    mandatorily redeemable convertible preferred stock.



(3) Pro forma net loss per share has been computed by dividing net loss by the
    pro forma weighted average number of shares outstanding. The pro forma
    weighted average number of shares outstanding includes the pro forma effects
    of the automatic conversion on a weighted average basis of E-LOAN's
    preferred stock, and the exercise and conversion of a warrant for 53,996
    shares of Series D preferred stock into 161,988 shares of common stock as if
    the conversion occurred on January 1, 1998 or at the date of issuance, if
    later.



(4) Computed based on E-LOAN's estimate of the percentage of referred loans
    closed.


                                        3
<PAGE>   8

                                  RISK FACTORS

     You should carefully consider the risks described below before making a
decision to buy our common stock. The risks and uncertainties described below
are not the only ones we face. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also impair our business
operations.

     If any of the following risks actually occur, our business, financial
condition or results of operations could be adversely affected, the trading
price of our common stock could decline, and you could lose all or part of your
investment. You should also refer to the other information set forth in this
prospectus, including our financial statements and the related notes.

WE HAVE A HISTORY OF LOSSES, WE EXPECT LOSSES TO CONTINUE AND WE MAY NOT ACHIEVE
OR MAINTAIN PROFITABILITY

     We have not achieved profitability and expect to continue to incur
operating losses for the foreseeable future. We incurred net losses of $11.2
million for the year ended December 31, 1998. As of March 31, 1999, our
accumulated deficit was $24.0 million. Given that we expect to continue to incur
significant sales and marketing expenses, we will need to generate significant
revenues to achieve and maintain profitability. Although our revenues have grown
in recent quarters, we may not achieve sufficient revenues for profitability.
Even if we achieve profitability, we may not sustain or increase profitability
on a quarterly or annual basis in the future. If revenues grow slower than we
anticipate, or if operating expenses exceed our expectations or cannot be
adjusted accordingly, our business, results of operations and financial
condition will be adversely affected. See "Selected Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations".

WE HAVE A LIMITED OPERATING HISTORY AND CONSEQUENTLY FACE SIGNIFICANT RISKS AND
UNCERTAINTIES

     We were incorporated in August 1996 and initiated our online mortgage
operations in June 1997. As a result of our limited operating history and our
recent growth, it will be necessary to implement new and expanded operational,
financial and administrative systems and control procedures to enable us to
expand, train and manage our employees and coordinate the efforts of our
underwriting, accounting, finance, marketing, and operations departments. In the
past, we have experienced difficulties summarizing and preparing accurate
financial information on a timely basis. If we experience these difficulties in
the future, we may be unable to produce accurate and timely financial
statements, which could limit our ability to conduct loan origination and sale
operations and adversely affect the liquidity and price of our common stock. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Overview".

OUR QUARTERLY FINANCIAL RESULTS ARE VULNERABLE TO SIGNIFICANT FLUCTUATIONS AND
SEASONALITY BECAUSE OF MANY FACTORS, ANY OF WHICH COULD ADVERSELY AFFECT OUR
STOCK PRICE

     Due to rising interest rates and other factors, we expect our revenues in
the quarter ended June 30, 1999 to be flat or below the prior quarter's revenue.
It is possible that in some future periods our operating results may be below
the expectations of public market analysts and investors. In this event, the
price of our common stock may fall. Our revenues and operating results may vary
significantly from quarter to quarter due to a number of factors. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for detailed information on our quarterly operating results. As a
result, we believe that quarter-to-quarter comparisons of our operating results
are not a good indication of our future performance.

                                        4
<PAGE>   9

INTEREST RATE FLUCTUATIONS COULD ADVERSELY AFFECT OUR BUSINESS

     A high percentage of our customers use our services to refinance existing
mortgages and are motivated to do so primarily when interest rates fall below
the rates of their existing mortgages. In the event interest rates significantly
increase, consumers' incentive to refinance will be greatly reduced and the
number of loans that we originate could significantly decline. For example, we
believe our loan volume will decline in the quarter ended June 30, 1999 below
the prior quarter's volume, partly based on a recent increase in interest rates.
Our failure to successfully reduce this dependence on refinancings and increase
the volume of our business derived from home purchases could have an adverse
effect on our business.

     Our ability to engage in profitable secondary sales of loans may also be
adversely affected by increases in interest rates. The mortgage loan purchase
commitments we obtain are contingent upon our delivery of the relevant loans to
the purchasers within specified periods. To the extent that we are unable to
deliver the loans within the specified periods and interest rates increase, we
may experience no gain or even a loss on the sale of these loans. In addition,
any increase in interest rates will increase the cost of maintaining our
warehouse and repurchase lines of credit which we depend on to fund the loans we
originate. We currently do not use derivative financial instruments to hedge
these risks and are therefore exposed to losses caused by fluctuations in
interest rates.

     A sharp decrease in interest rates over a short period may cause customers
who have interest rates on mortgages committed through E-LOAN to either delay
closing their loans or refinance with another lender. If this occurs in
significant numbers, it may have an adverse effect on our business or quarterly
results of operations.

UNCERTAINTY WITH RESPECT TO THE TIME IT TAKES TO CLOSE LOANS CAN LEAD TO
UNPREDICTABLE REVENUE AND PROFITABILITY

     The time between the date an application is received from a customer on our
website and the date the loan closes has typically been lengthy and
unpredictable. For instance, in April 1999 approximately 9.5% of our loans were
funded after the loan commitment period had expired. The loan application and
approval process is often delayed due to factors over which we have little or no
control, including the timing of the customer's decision to commit to an
available interest rate, the close of escrow date for purchase loans, the
timeliness of appraisals and the adequacy of the customer's own disclosure
documentation. This uncertain timetable can have a direct impact on our revenue
and profitability for any given period. We may expend substantial funds and
management resources supporting the loan completion process and never generate
revenue from closed loans. Therefore, our results of operations for a particular
period may be adversely affected if the loans applied for during that period do
not close in a timely manner or at all. For example, we have experienced a
significant increase in purchase loan applications during the current quarter
ending June 30, 1999. Purchase loan applications generally take longer to close
than refinancing applications as they are tied to the close of escrow date. We
expect our loan volumes will decline in the quarter ended June 30, 1999 below
the prior quarter's volume, partly based on the extended time it takes to close
a purchase loan.

WE HAVE ONLY OPERATED DURING PERIODS OF GROWTH IN THE HOME MORTGAGE MARKET AND
CONSEQUENTLY FACE SIGNIFICANT RISKS AND UNCERTAINTIES

     All of our operations have occurred during a period in which the home
mortgage market has experienced rapid growth. Since we began our online mortgage
operations, we have never operated during a downturn in the mortgage business
and we cannot assure you that we will be able to operate successfully if a
downturn occurs. We have generated limited revenues and have never operated
profitably.

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<PAGE>   10

WE HAVE EXPERIENCED SIGNIFICANT GROWTH IN OUR BUSINESS IN RECENT PERIODS, AND IF
WE ARE UNABLE TO MANAGE THIS GROWTH, OUR BUSINESS WILL BE ADVERSELY AFFECTED

     We have experienced periods of significant growth, which have placed a
strain on our resources and will continue to do so in the future. If we do not
manage this growth effectively, it could adversely affect our business. We may
not be successful in managing or expanding our operations or maintaining
adequate management, financial and operating systems and controls. Our headcount
has grown substantially. At December 31, 1997, we had a total of 40 full-time
employees and at March 31, 1999, we had a total of 237 full-time employees.

     Several members of our senior management joined us within the last eight
months, including Frank Siskowski, Chief Financial Officer; Harold "Pete"
Bonnikson, Senior Vice President of Operations; and Joseph Kennedy, Senior Vice
President of Marketing and Business Development. These individuals have not
previously worked together and they may not work together effectively.

IF ONLINE MORTGAGES AND OUR SERVICE OFFERINGS DO NOT ACHIEVE WIDESPREAD CONSUMER
ACCEPTANCE, OUR BUSINESS WILL BE ADVERSELY AFFECTED

     Our success will depend in large part on widespread consumer acceptance of
purchasing mortgages online. The development of an online market for mortgage
loans has only recently begun, is rapidly evolving and likely will be
characterized by an increasing number of market entrants. Our future growth, if
any, will depend on the following critical factors:

     - the growth of the Internet as a commerce medium generally, and as a
       market for consumer financial products and services specifically;

     - our ability to successfully and cost-effectively market our services to a
       sufficiently large number of customers; and

     - our ability to overcome a perception among many real estate market
       participants that obtaining mortgages online is risky for consumers.

     There can be no assurance that the market for our services will develop,
that our services will be adopted or that consumers will significantly increase
their use of the Internet for obtaining mortgage loans. If the online market for
mortgage loans fails to develop, or develops more slowly than expected, or if
our services do not achieve widespread market acceptance, our business, results
of operations and financial condition would be adversely affected.

BECAUSE A HIGH CONCENTRATION OF OUR BUSINESS IS IN CALIFORNIA, WE ARE
PARTICULARLY VULNERABLE TO ECONOMIC AND OTHER FACTORS AFFECTING CALIFORNIA

     Approximately 84% and 69% of the loans we closed in the year ended December
31, 1998 and the quarter ended March 31, 1999, respectively, were from borrowers
located in California. No other state generated more than 10% of our closed
loans during these periods. We are more likely to originate a significant amount
of our loans in California for the foreseeable future because we are located
there, we have advertised more heavily in California than in other states to
date, and we believe that California consumers are more likely to be comfortable
with using the Internet to purchase mortgages. There have been times in the
past, most recently in 1991 - 1992, when the California economy has suffered a
recession disproportionate with the rest of the country. Should a similar
recession happen again in California, our business would be adversely affected.

     In addition, California historically has been vulnerable to natural
disasters, including earthquakes and mudslides, which are not typically covered
by standard hazard insurance policies maintained by borrowers. Uninsured
disasters may adversely impact borrowers' ability to repay mortgage loans we
originate and any sustained period of increased delinquencies or defaults could
adversely affect the pricing of our future secondary loan sales and our overall

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<PAGE>   11

ability to sell loans. The occurrence of natural disasters in California could
have an adverse effect on our business, results of operations and financial
condition.

THE LOSS OF ONE OR MORE OF OUR SIGNIFICANT DISTRIBUTION PARTNERS WOULD ADVERSELY
AFFECT OUR BUSINESS

     We rely on Internet distribution partners to direct a significant number of
our prospective customers to our website. If we lose any of our significant
distribution partners, we will likely fail to meet our growth objectives, both
in terms of additional borrowers and increased brand awareness. We consider our
distribution partnerships with Yahoo!, E*Trade and DLJdirect to be the most
critical to our success. During the year ended December 1998, approximately 13%
of our closed loans were derived from a website that we operate with Yahoo!, and
during the first quarter of 1999, approximately 14%, 2% and 1% of our closed
loans were derived from the websites we operate with Yahoo!, E*Trade and
DLJdirect, respectively. In the aggregate, approximately 18% and 22% of our
closed loans were derived from the websites of our distribution partners in 1998
and the first quarter of 1999. Our agreements with our distribution partners are
typically short-term, from one to three years in length, and can be terminated
for any reason upon 30 to 60 days prior written notice. We cannot assure you
that any or all of these agreements will not be terminated or will be renewed or
extended past their current expiration dates. If any of these agreements were to
be terminated or were to lapse without extension, we could lose a considerable
number of loan applications and our business would be adversely affected.

THE TERMINATION OF ONE OR MORE OF OUR FUNDING PARTNERSHIPS WOULD ADVERSELY
AFFECT OUR BUSINESS

     We depend on GE Capital Mortgage Services, Inc. and Bank United to finance
our internal loan funding activities through the warehouse credit facilities
provided by each of these lenders. We also depend on Greenwich Capital Financial
Products, Inc. to finance portions of our mortgage loan inventory pending
ultimate sale to mortgage loan purchasers. If either of our warehouse credit
facilities becomes unavailable or our relationship with Greenwich Capital is
terminated, our business would be adversely affected. Under our agreements with
each of these partners, we make extensive representations, warranties and
various operating and financial covenants. A material breach of these
representations, warranties or covenants could result in the termination of our
agreements and an obligation to repay all amounts outstanding at the time of
termination. In the past, we have had to obtain waivers from Greenwich Capital
and GE Capital as a result of our failure to comply with covenants regarding the
issuance of capital stock, excess asset purchases and the breach of financial
ratios.

     Our agreement with Greenwich Capital expires in April 2000, our agreement
with GE Capital expires in April 2000 and our agreement with Bank United expires
in February 2000. Our agreement with GE Capital can be terminated at any time on
120 days prior written notice. We are continually seeking to obtain additional
warehouse lending resources, but we may not be successful in this regard.

WE DEPEND ON THE TIMELY AND COMPETENT SERVICES OF VARIOUS COMPANIES INVOLVED IN
THE MORTGAGE PROCESS; IF THESE COMPANIES FAIL TO TIMELY AND COMPETENTLY DELIVER
THESE SERVICES, OUR BUSINESS AND REPUTATION WILL BE DIRECTLY AND ADVERSELY
AFFECTED

     We rely on other companies to perform services related to the loan
underwriting process, including appraisals, credit reporting and title searches.
Any interruptions or delays in the provision of these services may cause delays
in the processing and closing of loans for our customers. If we are unsuccessful
in managing the timely delivery of these services we will likely experience
increased customer dissatisfaction and our business could be adversely affected.

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<PAGE>   12

WE DEPEND ON OUR AGREEMENTS WITH THIRD PARTIES TO FUND MORTGAGE LOANS OR FULFILL
LOAN TRANSACTION PROCESSING IN 16 STATES; IF THESE AGREEMENTS ARE TERMINATED,
OUR BUSINESS COULD BE ADVERSELY AFFECTED

     E-LOAN licenses its mortgage loan origination systems and proprietary marks
to NetB@nk to enable NetB@nk to fund mortgage loans under the E-LOAN brand in
eleven states, and has agreements with PHH Mortgage Services Corporation and
Prism Mortgage Company relating to the fulfillment of all aspects of loan
transaction processing following origination in five states. Each of these
agreements may be terminated by either party upon 30 days prior written notice.
The termination of any or all of these agreements could have a material adverse
effect on our business.

THE LOSS OF OUR RELATIONSHIP WITH FANNIE MAE OR ANY OTHER SIGNIFICANT PROVIDER
OF AUTOMATED UNDERWRITING WOULD HAVE AN ADVERSE AFFECT ON OUR BUSINESS

     We expect to depend on automated underwriting and other services offered by
government sponsored and other mortgage investors, including Fannie Mae and
Freddie Mac, to help ensure that our mortgage services can be offered
efficiently and on a timely basis. We currently have an agreement with Fannie
Mae that authorizes our use of their automated underwriting services and enables
us to sell qualified first mortgages to Fannie Mae. We cannot assure you that we
will remain in good standing with Fannie Mae or that Fannie Mae will not
terminate our relationship. We expect to process a significant portion of our
conforming loans using the Fannie Mae system until we are able to obtain
automated underwriting services from other providers. Our agreement with Fannie
Mae can be terminated by either party. The termination of our agreement with
Fannie Mae would adversely impact our business by reducing our ability to
streamline the mortgage origination process. Additionally, we may not be able to
successfully implement the automated underwriting services of Fannie Mae or
other automated underwriting providers in a manner that will lead to substantial
processing efficiencies.

WE MAY INCUR LOSSES ON LOANS IF WE BREACH REPRESENTATIONS OR WARRANTIES TO
MORTGAGE LOAN PURCHASERS

     In connection with the sale and exchange of loans, we make customary
representations and warranties to mortgage loan purchasers relating to, among
other things, compliance with laws and origination practices. In the event we
breach any of these representations and warranties, we may be required to
repurchase or substitute these mortgage loans and bear any subsequent losses on
the repurchased loans. We may also be required to indemnify mortgage loan
purchasers for these losses and claims with respect to mortgage loans for which
there was a breach of representations and warranties. In addition, many of our
agreements with mortgage loan purchasers prohibit our solicitation of borrowers
with respect to the refinancing of loans we originate and sell. The mortgage
loan purchasers under these agreements may construe our Mortgage Monitor service
as violating these non-solicitation provisions, in which case they may elect to
terminate their agreements with us or may seek recovery from us for damages
sustained by them. Many of our agreements with mortgage loan purchasers prohibit
us from refinancing mortgage loans for specified time periods, unless we pay
penalties to the mortgage loan purchasers or obtain their consent. These
agreements also require us to return any premiums paid by a mortgage loan
purchaser if the mortgage loans purchased are prepaid in full during periods of
up to 12 months following the date the mortgage loan is purchased.

THE MORTGAGE LENDING INDUSTRY IS INTENSELY COMPETITIVE, AND IF WE FAIL TO
SUCCESSFULLY COMPETE IN THIS INDUSTRY, OUR MARKET SHARE AND BUSINESS WILL BE
ADVERSELY AFFECTED

     To compete successfully, we must respond promptly and effectively to the
challenges of technological change, evolving standards and our competitors'
innovations by continuing to enhance and expand our services, as well as our
sales and marketing channels. Increased

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<PAGE>   13

competition, particularly online competition, could result in price reductions,
reduced margins or loss of market share, any of which could adversely affect our
business. We may not be able to compete successfully in our market environment
and our failure to do so could have an adverse effect on our business, results
of operations and financial condition. See "Business -- Competition".

IF WE FAIL TO COMPLY WITH THE NUMEROUS LAWS AND REGULATIONS THAT GOVERN OUR
INDUSTRY, OUR BUSINESS COULD BE ADVERSELY AFFECTED

     Our business must comply with extensive and complex rules and regulations
of, and licensing and examination by, various federal, state and local
government authorities. These rules impose obligations and restrictions on our
residential loan brokering and lending activities. In particular, these rules
limit the broker fees, interest rates, finance charges and other fees we may
assess, require extensive disclosure to our customers, prohibit discrimination
and impose on us multiple qualification and licensing obligations. We may not
always have been and may not always be in compliance with these requirements.
Failure to comply with these requirements may result in, among other things,
revocation of required licenses or registrations, loss of approved status,
voiding of loan contracts or security interests, indemnification liability or
the obligation to repurchase mortgage loans sold to mortgage loan purchasers,
rescission of mortgage loans, class action lawsuits, administrative enforcement
actions and civil and criminal liability. See "Business -- Regulation of
Mortgage Brokers and Lenders".

ANY ACQUISITIONS THAT WE UNDERTAKE COULD BE DIFFICULT TO INTEGRATE, DISRUPT OUR
BUSINESS, DILUTE STOCKHOLDER VALUE AND ADVERSELY AFFECT OUR OPERATING RESULTS

     We may acquire or make investments in complementary businesses,
technologies, services or products. These acquisitions and investments could
disrupt our ongoing business, distract our management and employees and increase
our expenses. We have had discussions with companies regarding our acquiring, or
investing in, their businesses, products, services or technologies. If we
acquire a company, we could have difficulty in assimilating that company's
personnel, operations, technology and software. In addition, the key personnel
of the acquired company may decide not to work for us. We could also have
difficulty in integrating the acquired products, services or technologies into
our operations and we may incur indebtedness or issue equity securities to pay
for any future acquisitions. The issuance of equity securities could be dilutive
to our existing stockholders.

THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR KEY PERSONNEL WOULD LIKELY HAVE AN
ADVERSE EFFECT ON OUR BUSINESS

     Our future success depends to a significant extent on the continued
services of our senior management and other key personnel, particularly
co-founders Chris Larsen, Chief Executive Officer, and Janina Pawlowski,
President. Ms. Pawlowski, a licensed real estate broker, is responsible for all
of our activities in California and several other states. If Ms. Pawlowski were
to terminate her relationship with us for any reason we would not be able to
conduct business in these states until a replacement is found. The loss of the
services of Mr. Larsen, Ms. Pawlowski or other key employees, would also likely
have an adverse effect on our business, results of operations and financial
condition. We have not entered into employment agreements with any of our
executives, except Joseph Kennedy, Senior Vice President, Marketing and Business
Development, and do not maintain "key person" life insurance for any of our
personnel. See "Management" for detailed information on our key personnel.

WE MAY NOT BE ABLE TO RECRUIT AND RETAIN THE PERSONNEL WE NEED TO SUCCEED

     Competition for personnel throughout our industry is intense. We may be
unable to retain our key employees or attract, assimilate or retain other highly
qualified employees in the future. Our

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<PAGE>   14

future success depends on our continuing to attract, retain and motivate highly
skilled employees, particularly with respect to our loan processing functions.
We have in the past experienced, and we expect to continue to experience in the
future, difficulty in hiring and retaining employees with appropriate
qualifications. If we do not succeed in attracting new personnel or retaining
and motivating our current personnel, our business will be adversely affected.

OUR BUSINESS WILL BE IMPAIRED IF CONSUMERS DO NOT CONTINUE TO USE THE INTERNET

     Our business will be adversely affected if Internet usage does not continue
to grow, particularly by homebuyers. A number of factors may inhibit Internet
usage by consumers, including inadequate network infrastructure, security
concerns, inconsistent quality of service, and lack of availability of
cost-effective, high-speed service. If Internet usage grows, the Internet
infrastructure may not be able to support the demands placed on it by this
growth and its performance and reliability may decline. In addition, many
websites have experienced service interruptions as a result of outages and other
delays occurring throughout the Internet infrastructure. If these outages or
delays frequently occur in the future, Internet usage, as well as the usage of
our website, could grow more slowly or decline.

OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO EXPAND AND PROMOTE OUR BRAND
RECOGNITION

     Establishing and maintaining our brand is critical to attracting and
expanding our customer base, solidifying our business relationships and
successfully implementing our business strategy. We cannot assure you that our
brand will be positively accepted by the market or that our reputation will be
strong.

     Promotion and enhancement of our brand will also depend, in part, on our
success in providing a high-quality customer experience. We cannot assure you
that we will be successful in achieving this goal. To date we are aware of
numerous customer complaints regarding the quality of our service. If these
complaints persist they may significantly damage our reputation and offset the
efforts we make in promoting and enhancing our brand and could have an adverse
effect on our business, results of operations and financial condition. If
visitors to our website do not perceive our existing services to be of high
quality or if we alter or modify our brand image, introduce new services or
enter into new business ventures that are not favorably received, the value of
our brand could be diluted, thereby decreasing the attractiveness of our service
to potential customers.

OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO ADAPT TO THE RAPID TECHNOLOGICAL
CHANGE THAT CHARACTERIZES OUR INDUSTRY

     Our future success will depend on our ability to adapt to rapidly changing
technologies by continually improving the performance features and reliability
of our services. We rely on third party software products and services,
including software related to automated underwriting functions which will enable
us to realize processing efficiencies that are central to our operations. If we
are unable to integrate this software in a fully functional manner, we may
experience difficulties that could delay or prevent the successful development,
introduction or marketing of new products and services. In addition,
enhancements of our products and services must meet the requirements of our
current and prospective customers and must achieve significant market
acceptance. We could also incur substantial costs if we need to modify our
services or infrastructure to adapt to these changes.

ANY FAILURES OF, OR CAPACITY CONSTRAINTS IN, OUR SYSTEMS OR THE SYSTEMS OF THIRD
PARTIES ON WHICH WE RELY COULD ADVERSELY AFFECT OUR BUSINESS

     Our communications hardware and certain of our other computer hardware
operations are located at the facilities of Exodus Communications, Inc. in Santa
Clara, California and Jersey City, New Jersey. The hardware for our internal
loan and product database, as well as our loan

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processing operations is maintained in our Dublin, California facility. Fires,
floods, earthquakes, power losses, telecommunications failures, break-ins and
similar events could damage these systems. Computer viruses, electronic
break-ins or other similar disruptive problems could also adversely affect our
website. Our business could be adversely affected if our systems were affected
by any of these occurrences. Our insurance policies may not adequately
compensate us for any losses that may occur due to any failures or interruptions
in our systems.

ANY OUTGAGES, DELAYS OR OTHER DIFFICULTIES EXPERIENCED BY THE INTERNET SERVICE
PROVIDERS, ONLINE SERVICE PROVIDERS OR OTHER WEBSITE OPERATORS ON WHICH OUR
USERS DEPEND COULD ADVERSELY AFFECT OR BUSINESS

     Our website has in the past and may in the future experience slower
response times or decreased traffic for a variety of reasons. In addition, our
users depend on Internet service providers, online service providers and other
website operators for access to our websites. Many of them have experienced
significant outages in the past, and could experience outages, delays and other
difficulties due to system failures unrelated to our systems. Additionally, the
Internet infrastructure may not be able to support continued growth in its use.
Any of these problems could adversely affect our business.

OUR BUSINESS WILL BE ADVERSELY AFFECTED IF WE ARE UNABLE TO SAFEGUARD THE
SECURITY AND PRIVACY OF OUR CUSTOMERS' FINANCIAL DATA

     Internet usage could decline if any well-publicized compromise of security
occurred. We may incur significant costs to protect against the threat of
security breaches or to alleviate problems caused by any breaches that occur. We
also retain on our premises personal financial documents that we receive from
prospective borrowers in connection with their loan applications. These
documents are highly sensitive and if a third party were to misappropriate our
customers' personal information, customers could possibly bring legal claims
against us. We cannot assure you that our privacy policy will be deemed
sufficient by our prospective customers or any federal or state laws governing
privacy which may be adopted in the future.

OUR BUSINESS WILL BE ADVERSELY AFFECTED IF WE ARE UNABLE TO PROTECT OUR
INTELLECTUAL PROPERTY RIGHTS FROM THIRD PARTY CHALLENGES OR IF WE ARE INVOLVED
IN LITIGATION


     Trademarks and other proprietary rights are important to our success and
our competitive position. Although we seek to protect our trademarks and other
proprietary rights through a variety of means, we cannot assure you that the
actions we have taken are adequate to protect these rights. We may also license
content from third parties in the future and it is possible that we could face
infringement actions based upon the content licensed from these third parties.
We have received notice from EduCap, Inc., a provider of educational loans, that
it believes that our use of the name "E-LOAN" infringes EduCap's trademark "THE
E-LOAN." EduCap has demanded that we cease and desist our use of the name E-LOAN
and has threatened legal action if we are unable to reach an amicable solution.
Any claims brought against us, regardless of their merit, could result in costly
litigation and the diversion of our financial resources and technical and
management personnel. Further, if any of these claims are proved valid, through
litigation or otherwise, we may be required to change our trademarks and pay
financial damages, which could adversely affect our business. In particular, if
the claim by EduCap is upheld, we would no longer be permitted to use the name
E-LOAN. See "Business -- Intellectual Property".


IF OUR INTERNAL SYSTEMS, OR THE INTERNAL SYSTEMS OF OUR SUPPLIERS, ARE NOT YEAR
2000 COMPLIANT, OUR BUSINESS COULD BE SERIOUSLY DISRUPTED

     Many currently installed computer systems and software products only accept
two digits to identify the year in any date. Thus, the year 2000 will appear as
"00", which the system might consider to be the year 1900 rather than the year
2000. This could result in system failures,

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delays or miscalculations. Computer systems and software that have not been
developed or enhanced recently may need to be upgraded or replaced to comply
with Year 2000 requirements.

     We believe that each of our software systems on a stand-alone basis is
currently Year 2000 compliant. However, we rely on software components acquired
from third parties which may not be Year 2000 compliant. The Internet operations
of many of our customers and suppliers may also be affected by Year 2000
complications. The failure of our customers or suppliers to ensure that their
systems are Year 2000 compliant could have an adverse effect on our customers
and suppliers, resulting in decreased Internet usage or our inability to obtain
necessary data communication and telecommunication capacity, which in turn could
have an adverse effect on our business, results of operations and financial
condition. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Year 2000".

THERE HAS BEEN NO PRIOR MARKET FOR OUR COMMON STOCK AND AN ACTIVE TRADING MARKET
MAY NOT DEVELOP FOLLOWING THIS OFFERING

     Before this offering, there has not been a public market for our common
stock and the trading market price for our common stock may decline below the
initial public offering price. We cannot predict the extent to which a market
will develop or how liquid that market might become. The initial public offering
price for the shares of our common stock will be determined by negotiations
between us and the representatives of the underwriters and may not be indicative
of prices that will prevail in the trading market. See "Underwriting" for a
discussion of the factors considered in determining the initial public offering
price.

OUR STOCK PRICE COULD BE VOLATILE AND COULD DECLINE FOLLOWING THIS OFFERING

     The stock market has experienced significant price and volume fluctuations,
and the market prices of technology companies, particularly Internet-related
companies, have been highly volatile. Investors may not be able to resell their
shares at or above the initial public offering price. See "Underwriting". In the
past, securities class action litigation has often been instituted against
companies following periods of volatility in the market price of their
securities. This type of litigation could result in substantial costs and a
diversion of management's attention and resources.

PRINCIPAL STOCKHOLDERS, EXECUTIVE OFFICERS AND DIRECTORS WILL RETAIN SUBSTANTIAL
CONTROL OVER OUR BUSINESS AFTER THE OFFERING AND MAY MAKE DECISIONS THAT ARE NOT
IN THE BEST INTEREST OF ALL STOCKHOLDERS

     Upon completion of this offering, our executive officers, directors and
greater than 5% stockholders, and related entities controlled by them, will, in
the aggregate, own approximately 74.5% of our outstanding common stock. As a
result, these persons, acting together, will have the ability to substantially
influence all matters submitted to the stockholders for approval, including the
election and removal of directors and any merger, consolidation or sale of all
or substantially all of our assets, and to control our management and affairs.
Accordingly, this concentration of ownership may have the effect of delaying,
deferring or preventing a change in control, impeding a merger, consolidation,
takeover or other business combination involving us or discouraging a potential
acquirer from making a tender offer or otherwise attempting to obtain control of
our business, even if the transaction would be beneficial to other stockholders.
See "Principal and Selling Stockholders".

FUTURE SALES OF OUR COMMON STOCK MAY CAUSE OUR STOCK PRICE TO DECLINE

     If our stockholders sell substantial amounts of our common stock in the
public market following this offering, the market price of our common stock
could decline. Based on shares outstanding as of May 18, 1999, upon completion
of this offering we will have outstanding 38,482,403 shares of common stock,
assuming no exercise of the underwriters' over-allotment

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<PAGE>   17

option. Of these shares, the 3,500,000 shares of common stock sold in this
offering will be freely tradeable, without restriction, in the public market.
After the agreements not to sell shares after this offering expire, 180 days
from the date of this prospectus, an additional 32,235,684 shares will be
eligible for sale in the public market.

     In addition, 5,784,432 shares under outstanding options and warrants and
5,909,082 shares reserved for future issuance under our stock option and
purchase plans will be eligible for sale in the public market subject to vesting
and the expiration of agreements not to sell shares after the offering.

                           FORWARD LOOKING STATEMENTS

     This prospectus contains forward-looking statements that involve risks and
uncertainties. We use the words "anticipates," "believes," "plans," "expects,"
"future," "intends" and similar expressions to identify forward-looking
statements. This prospectus also contains forward-looking statements attributed
to certain third parties relating to their estimates regarding the growth of
e-commerce and mortgage loan markets. Our actual results could differ materially
from those anticipated in these forward-looking statements for many reasons,
including the risks faced by us described in "Risk Factors" and elsewhere in
this prospectus.

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                                USE OF PROCEEDS

     The net proceeds to us from the sale of the 3,495,000 shares of common
stock offered by us and from a private placement of 1,250,000 shares of common
stock that will close at the same time as this offering are estimated to be
approximately $42.7 million, at an assumed initial public offering price of
$10.00 per share, after deducting the underwriting discount, estimated offering
expenses and assuming no exercise of the underwriters' over-allotment option to
purchase 525,000 additional shares of common stock from us. We are conducting
this offering primarily to increase our equity capital, create a public market
for our common stock and to facilitate future access to public equity markets.
We expect to use the majority of these proceeds for working capital and general
corporate purposes. E-LOAN will not receive any proceeds from the sale of common
stock by the selling stockholder. It is our intent to focus our operating
efforts on increasing client satisfaction with the E-LOAN experience by further
streamlining the mortgage process. This focused effort will include expenditures
on technology and system upgrades, corporate training, and recruitment of key
management and personnel to improve our operating and customer service
practices. In addition, we may use a portion of the net proceeds to acquire
complementary products, technologies or businesses; however, we currently have
no commitments or agreements and are not involved in any negotiations to do so.
We intend to invest the net proceeds of this offering in interest-bearing,
investment-grade securities pending their use.

                                DIVIDEND POLICY

     We have never declared or paid any dividends on our capital stock. We
currently expect to retain future earnings, if any, for use in the operation and
expansion of our business and do not anticipate paying any cash dividends in the
foreseeable future. The covenants made by us under our existing line of credit
prohibit the payment of dividends.

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                                 CAPITALIZATION

     The following table sets forth the following information:

     - the actual capitalization of E-LOAN as of March 31, 1999;

     - the pro forma capitalization of E-LOAN after giving effect to the
       conversion of all outstanding shares of convertible preferred stock and a
       warrant to purchase Series D preferred stock into an aggregate of
       20,655,909 shares of common stock upon the closing of this offering; and

     - the pro forma as-adjusted capitalization after giving effect to the
       issuance of 75,000 shares of common stock to the selling stockholder, the
       issuance of 1,250,000 shares of common stock in a private placement that
       will close at the same time as this offering and the sale of 3,495,000
       shares of common stock in this offering by E-LOAN at an assumed initial
       public offering price of $10.00 per share, less underwriting discounts
       and commissions and estimated offering expenses payable by E-LOAN.

<TABLE>
<CAPTION>
                                                                AS OF MARCH 31, 1999 (UNAUDITED)
                                                              ------------------------------------
                                                                                        PRO FORMA
                                                               ACTUAL     PRO FORMA    AS ADJUSTED
                                                              --------   -----------   -----------
                                                                  (IN THOUSANDS, EXCEPT SHARE
                                                                      AND PER SHARE DATA)
<S>                                                           <C>        <C>           <C>
Lease obligations, long-term portion........................  $    686    $    686      $    686
Notes payable, long-term....................................       614         614           614
Mandatorily redeemable convertible preferred stock:
  Series C, 4,467,912 shares authorized; 4,269,936 shares
    issued and outstanding, actual (aggregate liquidation
    preference $5,245,702); no shares issued and
    outstanding, pro forma as adjusted......................     6,135          --            --
  Series C-1, 4,467,912 shares authorized; no shares issued
    and outstanding, actual (liquidation preference $1.22852
    per share); no shares issued and outstanding, pro forma
    as adjusted.............................................        --          --            --
  Series D, 1,950,000 shares authorized; 1,702,529 shares
    issued and outstanding, actual (aggregate liquidation
    preference $15,770,526); no shares issued and
    outstanding, pro forma as adjusted......................    16,625          --            --
                                                              --------    --------      --------
Stockholders' deficit:
  Convertible preferred stock:
    Series A, 428,635 shares authorized; 428,635 shares
      issued and outstanding, actual (aggregate liquidation
      preference $94,300) no shares issued and outstanding,
      pro forma and as adjusted.............................        91          --            --
    Series B, 450,708 shares authorized; 430,207 shares
      issued and outstanding, actual (aggregate liquidation
      preference $412,999); no shares issued and
      outstanding, pro forma as adjusted....................       411          --            --
  Preferred stock; no shares authorized, actual; 5,000,000
    shares authorized, pro forma as adjusted, no shares
    issued and outstanding, actual, pro forma as adjusted...        --          --            --
  Common stock; 50,000,000 shares authorized and 12,742,974
    shares issued and outstanding, actual; 70,000,000
    authorized, 33,398,883 shares issued and outstanding,
    pro forma, 38,218,883 shares issued and outstanding, pro
    forma as adjusted.......................................        50      23,812        66,542
  Less: subscription receivable.............................        (4)         (4)           (4)
  Unearned compensation.....................................   (34,488)    (34,488)      (34,488)
  Additional paid-in capital................................    41,414      41,414        42,314
  Accumulated deficit.......................................   (23,979)    (23,979)      (24,880)
                                                              --------    --------      --------
         Total stockholders' equity (deficit)...............  $(16,505)   $  6,755      $ 49,484
                                                              --------    --------      --------
         Total mandatorily redeemable convertible stock and
           stockholders' equity.............................  $  6,255    $  6,755      $ 49,484
                                                              --------    --------      --------
Total capitalization........................................  $  7,555    $  8,055      $ 50,784
                                                              ========    ========      ========
</TABLE>

                                       15
<PAGE>   20

     This table excludes the following shares:

     - 10,148,514 shares issuable upon the exercise of options under E-LOAN's
       1997 Stock Option Plan consisting of:

       - 5,739,432 shares underlying options outstanding at a weighted average
         exercise price of $1.17 per share, of which 237,195 are exercisable as
         of March 31, 1999;

       - 4,409,082 shares underlying options available for future grants;

     - 1,500,000 shares issuable under E-LOAN's 1999 Employee Stock Purchase
       Plan; and

     - 45,000 shares underlying a warrant that may be exercised and converted
       into these shares at a price of $0.67 per share.

     See "Management -- Stock Plans", "Description of Capital Stock" and Notes
11, 12 and 16 of Notes to Financial Statements.

                                       16
<PAGE>   21

                                    DILUTION

     The pro forma net tangible book value of our common stock on March 31, 1999
was $6.8 million, or approximately $0.20 per share. Pro forma net tangible book
value per share represents the amount of our total tangible assets less total
liabilities, divided by the 33,398,883 pro forma number of shares of common
stock outstanding (assuming the conversion of all outstanding shares of
convertible preferred stock and the exercise and conversion of a warrant to
purchase Series D preferred stock into an aggregate of 20,655,909 shares of
common stock upon the closing of this offering). Dilution in net tangible book
value per share represents the difference between the amount per share paid by
purchasers of shares of our common stock in this offering and the net tangible
book value per share of our common stock immediately after the offering. After
giving effect to the issuance of 1,250,000 shares of common stock in a private
placement that will close at the same time as this offering and our sale of
3,495,000 shares of common stock and after deducting the underwriting discounts
and commissions and estimated offering expenses payable by E-LOAN, E-LOAN's net
tangible book value would have been $49.5 million or approximately $1.30 per
share. This represents an immediate increase in net tangible book value of $1.10
per share to existing stockholders and an immediate dilution in net tangible
book value of $8.70 per share to new investors. The following table illustrates
this per share dilution.

<TABLE>
<S>                                                           <C>      <C>
Assumed initial public offering price per share.............           $10.00
  Pro forma net tangible book value per share as of March
     31, 1999...............................................  $0.20
  Increase per share attributable to new investors..........  $1.10
                                                              -----
Pro forma net tangible book value per share after the
  offering..................................................           $ 1.30
                                                                       ------
Dilution in pro forma net tangible book value per share to
  new investors.............................................           $ 8.70
                                                                       ======
</TABLE>

     The following table shows, as of March 31, 1999, the number of shares of
common stock purchased from E-LOAN by existing stockholders and by the new
investors together with the total price and average price per share paid by each
of these groups. The information presented is based upon an assumed initial
public offering price of $10.00 per share, before deducting underwriting
discounts and commissions and estimated offering expenses payable by E-LOAN.

<TABLE>
<CAPTION>
                                SHARES PURCHASED      TOTAL CONSIDERATION
                              --------------------   ---------------------   AVERAGE PRICE
                                NUMBER     PERCENT     AMOUNT      PERCENT     PER SHARE
                              ----------   -------   -----------   -------   -------------
<S>                           <C>          <C>       <C>           <C>       <C>
Existing stockholders.......  33,398,883      88%    $22,240,403      32%       $ 0.67
New investors...............   4,745,000      12%     47,450,000      68%       $10.00
                              ----------     ---     -----------     ---
  Total.....................  38,143,883     100%    $69,690,403     100%
                              ==========     ===     ===========     ===
</TABLE>

     The information set forth above is based upon the number of shares of
common stock outstanding on March 31, 1999 and gives effect to the conversion of
all outstanding shares of E-LOAN's convertible preferred stock, the exercise and
conversion of a warrant to purchase Series D preferred stock into shares of
common stock and the issuance of 1,250,000 shares of common stock in the private
placement that will occur upon the closing of this offering. This information
excludes:

     - 10,148,514 shares issuable upon the exercise of options under E-LOAN's
       1997 Stock Option Plan consisting of:

       - 5,739,432 shares underlying options outstanding at a weighted average
         exercise price of $1.17 per share, of which 237,195 are exercisable as
         of March 31, 1999;

       - 4,409,082 shares underlying options available for future grants;

     - 1,500,000 shares issuable under E-LOAN's 1999 Employee Stock Purchase
       Plan;

     - 45,000 shares underlying a warrant that may be exercised and converted
       into these shares at a price of $0.67 per share.

     See "Management -- Stock Plans", "Description of Capital Stock" and Notes
11, 12 and 16 of Notes to Financial Statements.

                                       17
<PAGE>   22

                            SELECTED FINANCIAL DATA
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

     The selected financial data below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and is qualified by reference to the Financial Statements and Notes
thereto appearing elsewhere in this prospectus. The balance sheet data as of
December 31, 1997 and 1998 and the income statement data for each of the three
years in the period ended December 31, 1998 are derived from, and are qualified
by reference to, the audited financial statements of E-LOAN included elsewhere
in this prospectus. The balance sheet data as of March 31, 1999 and the income
statement data for the three months ended March 31, 1999 are derived from the
unaudited financial results included elsewhere in this prospectus. The balance
sheet data as of December 31, 1995 and 1996 and the income statement data for
the year ended December 31, 1995 are derived from the unaudited financial
statements of E-LOAN not included herein. The balance sheet amounts for December
31, 1994 related to PAFG, the predecessor company, are de minimis and the income
statement amounts for the year ended December 31, 1994 are not available. The
historical results are not necessarily indicative of results to be expected for
any future period.

<TABLE>
<CAPTION>
                                                                                                     THREE MONTHS
                                                             YEAR ENDED DECEMBER 31,                    ENDED
                                                -------------------------------------------------     MARCH 31,
                                                   1995           1996         1997        1998          1999
                                                -----------    -----------    -------    --------    ------------
                                                (UNAUDITED)                                          (UNAUDITED)
<S>                                             <C>            <C>            <C>        <C>         <C>
INCOME STATEMENT DATA:
Revenues......................................   $  1,603       $    893      $ 1,043    $  6,832      $  4,802
Operating expenses:
  Operations..................................      1,368            903        1,319       7,626         4,104
  Sales and marketing.........................         --             --          470       5,642         3,657
  Technology..................................         --             --          102       1,248           481
  General and administrative..................        152             97          524       2,410         1,423
  Amortization of unearned compensation.......         --             --           --       1,251         6,554
                                                 --------       --------      -------    --------      --------
    Total operating expenses..................      1,520          1,000        2,415      18,177        16,219
                                                 --------       --------      -------    --------      --------
      Loss from operations....................         83           (107)      (1,372)    (11,345)      (11,417)
Other income, net.............................         --             (3)          (2)        173            36
                                                 --------       --------      -------    --------      --------
Net income (loss).............................   $     83       $   (110)     $(1,374)   $(11,172)     $(11,381)
                                                 ========       ========      =======    ========      ========
  Net loss per share:
    Basic and diluted.........................   $    .01       $  (0.01)     $ (0.12)   $  (0.98)     $  (0.94)
                                                 ========       ========      =======    ========      ========
BALANCE SHEET DATA (AT END OF PERIOD):          (UNAUDITED)    (UNAUDITED)                           (UNAUDITED)
  Mortgage loans held-for-sale (pledged)......   $     --       $     --      $    --    $ 42,154      $ 63,729
  Cash and cash equivalents...................         47              2        4,218       9,141         3,565
  Total assets................................         81             40        4,680      55,523        72,962
  Warehouse lines payable.....................         --             --           --      41,046        60,256
  Long term obligations.......................         --             --           --       1,290         1,301
  Mandatorily redeemable preferred stock......         --             --        5,049      21,393        22,760
  Total stockholders' equity (deficit)........         58            (52)        (966)    (11,184)      (16,505)
</TABLE>

                                       18
<PAGE>   23

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with E-LOAN's
Financial Statements and Notes thereto and the other financial information
appearing elsewhere in this prospectus. In addition to historical information,
the following discussion and other parts of this prospectus contain
forward-looking information that involves risks and uncertainties. E-LOAN's
actual results could differ materially from those anticipated by the
forward-looking information due to competitive factors, risks associated with
E-LOAN's expansion plans and other factors discussed under "Risk Factors" and
elsewhere in this prospectus.

OVERVIEW

     E-LOAN is a leading online provider of mortgages and is engaged in the
brokerage, origination and sale of mortgage loans secured by residential real
estate.

     E-LOAN was incorporated in August 1996 and began marketing its services and
initiated online mortgage brokerage operations in June 1997. E-LOAN first
derived revenues from the origination and sale of mortgage loans in June 1998.

     In December 1997, E-LOAN merged with Palo Alto Funding Group (PAFG), a
traditional mortgage brokerage firm established in 1992, and suspended PAFG's
operations. In compliance with applicable reporting requirements, the results of
PAFG have been included in E-LOAN's financial statements as a predecessor
company beginning in 1995. However, E-LOAN believes that reported results prior
to 1998, which are primarily composed of PAFG results, are not indicative of
E-LOAN's current business operations.

     E-LOAN's revenues are derived from the brokering of loans and the
origination and sale of loans. Brokered loans are funded through lending
partners and E-LOAN never takes title to the mortgage. Brokerage revenues are
comprised of the mark-up to the lending partner's loan price, and processing and
credit reporting fees. These revenues are recognized at the time a loan is
closed. Originated and sold loans are loans that are funded through E-LOAN's own
warehouse lines of credit and sold to mortgage loan purchasers. Loan origination
and sale revenues consist of proceeds in excess of the carrying value of the
loan, origination fees less certain direct origination costs, other processing
fees and interest paid by borrowers on loans that E-LOAN holds for sale. These
revenues are recognized at the time the loan is sold or, for interest income, as
earned during the period from funding to sale. E-LOAN earns additional revenue
from its loan origination and sale operations as compared to brokered loan
operations because the sale of loans includes a service release premium.

     E-LOAN's loan origination and sale operations were initiated in June 1998
and represented 35% and 64% of total revenues for the year ended December 31,
1998 and for the three months ended March 31, 1999, respectively. E-LOAN expects
revenues derived from its loan origination and sale operations to continue to
increase as a percentage of total revenues.

     In generating revenues, E-LOAN relies on a number of strategic Internet
distribution partners to direct a significant number of prospective customers to
its website. E-LOAN considers its distribution partnerships with Yahoo!, E*Trade
and DLJdirect to be the most critical to its ability to generate revenues. Both
Yahoo! and E*Trade have made equity investments in E-LOAN. See "Certain
Transactions" and "Risk Factors -- The loss of one or more of our significant
distribution partners would adversely affect our business".

     As a result of our limited operating history and our recent growth, it will
be necessary to implement new and expanded operational, financial and
administrative systems and control procedures to enable us to expand, train and
manage our employees and coordinate the efforts of our underwriting, accounting,
finance, marketing, and operations departments. For example,

                                       19
<PAGE>   24

we intend to implement both a new financial reporting system and a loan
production system by the end of 1999.

     Historically, our efforts were focused primarily on developing and growing
our online mortgage operations and less on implementing internal accounting
controls, financial and operational reporting systems and expanding the size and
capabilities of our financial staff.

     In the fourth quarter of 1998, we hired a Chief Financial Officer and in
1999, we hired a Director of Finance and two other accounting managers as well
as additional full time and temporary financial personnel. We have also
documented and are in the process of enhancing our procedures and controls to
address the deficiencies in our financial reporting and loan production system.
See "Risk Factors -- We have a limited operating history and consequently face
significant risks and uncertainties".

E-LOAN FOUNDATION STOCK ISSUANCE

     In May 1999, E-LOAN donated 75,000 shares of common stock in connection
with its establishment of a charitable foundation. The shares donated had an
estimated fair value of $900,000, and E-LOAN expects to record this as a general
and administrative expense in the three month period ending June 30, 1999.

AMORTIZATION OF UNEARNED COMPENSATION

     Certain stock options granted in the years ended December 31, 1997 and
1998, and in the three months ended March 31, 1999 have been considered to be
compensatory. Additionally, an issuance of Series D preferred stock to an
officer in the three months ended March 31, 1999 has been considered to be
compensatory. Unearned compensation associated with stock options for the years
ended December 31, 1997 and 1998 amounted to $0 and $5.7 million, respectively.
Of these amounts $0 and $1.25 million have amortized for the years ended
December 31, 1997 and 1998, respectively. The remainder will be amortized over
the respective stock option vesting periods.

     Stock options granted in the three months ended March 31, 1999 resulted in
unearned compensation of $35.0 million. Additionally, in February 1999 E-LOAN
issued shares of Series D preferred stock to an officer which resulted in a one
time compensation charge of $1.6 million. The total unearned compensation charge
resulting from these transactions was $36.6 million. Of this amount $6.6 million
was amortized during the three months ended March 31, 1999. The remainder will
be amortized over the respective stock option vesting periods.

                                       20
<PAGE>   25

QUARTERLY RESULTS

     The following table sets forth the results of operations for E-LOAN on a
quarterly basis and expressed as a percentage of total revenues:

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED
                                       -----------------------------------------------------
                                       MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,
                                         1998       1998       1998        1998       1999
                                       --------   --------   ---------   --------   --------
                                                            (UNAUDITED)
<S>                                    <C>        <C>        <C>         <C>        <C>
Revenues.............................  $   527    $ 1,233     $ 2,051    $ 3,021    $  4,802
Operating expenses:
  Operations.........................      779      1,077       2,127      3,643       4,104
  Sales and marketing................      513        874       2,174      2,081       3,657
  Technology.........................      163        371         284        430         481
  General and administrative.........      379        436         711        884       1,423
  Amortization of unearned
     compensation....................       44        211         296        700       6,554
                                       -------    -------     -------    -------    --------
     Total operating expenses........    1,878      2,969       5,592      7,738      16,219
                                       -------    -------     -------    -------    --------
Loss from operations.................   (1,351)    (1,736)     (3,541)    (4,717)    (11,417)
Other income, net....................       20         29          26         98          36
                                       -------    -------     -------    -------    --------
Net loss.............................  $(1,331)   $(1,707)    $(3,515)   $(4,619)   $(11,381)
                                       =======    =======     =======    =======    ========
AS A PERCENTAGE OF REVENUES:
Revenues.............................      100%       100%        100%       100%        100%
Operating expenses:
  Operations.........................      148         87         104        121          85
  Sales and marketing................       97         71         106         69          76
  Technology.........................       31         30          14         14          10
  General and administrative.........       72         35          35         29          30
  Amortization of unearned
     compensation....................        8         17          14         23         136
     Total operating expenses........      356        241         273        256         338
Loss from operations.................     (256)      (141)       (173)      (156)       (238)
Other income, net....................        4          2           1          3           1
Net loss.............................     (253)%     (138)%      (171)%     (153)%      (237)%
                                       =======    =======     =======    =======    ========
</TABLE>

REVENUES

     Revenues increased sequentially each quarter throughout 1998 from $0.5
million to $3.0 million and increased $1.8 million from the fourth quarter to
$4.8 million for the three months ended March 31, 1999. Substantially all of
these increases resulted from growth in the number of loans closed and the
initiation of E-LOAN's loan origination and sale operations in June 1998. E-LOAN
did not significantly change its pricing during 1998 or the first quarter of
1999. E-LOAN expects that the rate of its revenue growth in future periods will
decline from the rates of revenue growth experienced in recent quarters. In
particular, E-LOAN expects that its revenues for the quarter ending June 30,
1999 will be lower than or flat relative to the first quarter of 1999. Recent
increases in interest rates have reduced the number of refinancing applications
received by E-LOAN, which has reduced the number of loans E-LOAN expects to
originate. In addition, a significant increase in the number of purchase loan
applications, which take substantially longer to close relative to refinancing
loan applications, also will contribute to lower loan volumes and, therefore,
lower revenues in the quarter ending June 30, 1999, as compared to the first
quarter of 1999. E-LOAN expects revenues derived from its loan origination and
sale operations to continue to increase as a percentage of its total revenues.

                                       21
<PAGE>   26

OPERATING EXPENSES


     TOTAL OPERATING EXPENSES. Total operating expenses increased sequentially
each quarter throughout 1998 from $1.9 million to $7.7 million and increased
$8.5 million from the fourth quarter of 1998 to $16.2 million for the first
quarter of 1999. The quarterly increases are due to significant increases in
compensation and benefits as a result of increasing headcount, and sales and
marketing increases due to the initiation of a major advertising campaign and
third party distribution agreements.


     OPERATIONS. Operations expense is comprised of both fixed and variable
expenses, including salaries, benefits and expenses associated with the
brokering, and the origination and sale of mortgage loans, and interest expense
paid by E-LOAN under the warehouse facilities it uses to fund loans held for
sale. Operations expense increased sequentially from the first quarter to the
fourth quarter of 1998 from $0.8 million to $3.6 million and increased $0.5
million from the fourth quarter of 1998 to $4.1 million for the three months
ended March 31, 1999. Operations expense decreased as a percentage of revenues
from 148% for the first quarter to 121% for the fourth quarter of 1998 and
decreased from 121% for the fourth quarter of 1998 to 85% for the three months
ended March 31, 1999. The increase in absolute dollars was primarily
attributable to an operations headcount increase necessary to support the growth
in E-LOAN's total closed loan volume. In addition, E-LOAN established its loan
origination and sale business in the last two quarters, which resulted in
additional headcount and an increase in interest expense due to an increase in
the number of loans held for sale. The decrease in operations expense as a
percentage of total revenue between the first and second quarter is due to
revenue growth exceeding growth in operations expense with an increase in the
third and fourth quarter from the establishment of the loan origination and sale
business. E-LOAN expects operations expense to increase in absolute dollars over
the next two years and intends to increase operations capacity in anticipation
of an increase in the number of loans funded, particularly purchase loans.
Purchase loan applications take longer to close and require greater interaction
between the borrower, the Realtor and other parties performing services related
to the transaction.

     SALES AND MARKETING. Sales and marketing expense is primarily comprised of
salaries, benefits and other expenses related to advertising, promotion and
distribution partnerships. Sales and marketing expense increased from the first
quarter to the fourth quarter of 1998 from $0.5 million to $2.1 million and
increased $1.6 million from the fourth quarter of 1998 to $3.7 million for the
three months ended March 31, 1999. Sales and marketing expense decreased as a
percentage of revenues from 97% for the first quarter to 69% for the fourth
quarter of 1998 and increased from 69% for the fourth quarter of 1998 to 76% for
the three months ended March 31, 1999. Sales and marketing expense increased in
absolute dollars due to increases in compensation associated with additional
headcount and a substantial increase in expenses for advertising, promotion and
distribution partnerships beginning in the third quarter of 1998 and continuing
through the first quarter of 1999. Sales and marketing decreased between the
first and second quarters of 1998 as a percentage of revenues due to revenue
growth exceeding growth in sales and marketing expense, with an increase in the
third quarter of 1998 due to the initiation of a major advertising campaign.
E-LOAN intends to significantly increase absolute dollar spending in sales and
marketing activities over the next two years in an effort to drive origination
volume and increase overall brand awareness.

     TECHNOLOGY. Technology expense includes salary, benefits and consulting
fees related to website development, the introduction of new technologies and
the support of E-LOAN's existing technological infrastructure. Technology
expense increased from the first quarter of 1998 to the fourth quarter of 1998,
from $0.2 million to $0.4 million and increased $0.1 million from the fourth
quarter of 1998 to $0.5 million for the three months ended March 31, 1999.
Technology expense decreased as a percentage of revenues from 31% to 14% from
the first quarter of 1998 to the fourth quarter of 1998 and decreased from 14%
in the fourth quarter of 1998 to 10% for the three months ended March 31, 1999.
Aside from a decrease from the second to third quarters of 1998

                                       22
<PAGE>   27

as a result of higher recruitment costs in the second quarter of 1998,
technology expense increased in absolute dollars sequentially in each quarter
throughout 1998 into 1999. The absolute dollar increases were primarily the
result of the growth in engineering and management information systems personnel
to support the expansion of online operations. Technology expense decreased
sequentially as a percentage of revenues due to revenue growth exceeding growth
in technology expense. E-LOAN intends to significantly increase absolute dollar
spending on technology over the next two years in an effort to further improve
the online mortgage origination process.

     GENERAL AND ADMINISTRATIVE. General and administrative expense is primarily
comprised of salary, benefits, rent and depreciation and amortization. General
and administrative expense increased sequentially from the first quarter to the
fourth quarter of 1998 from $0.4 million to $0.9 million and increased $0.5
million from the fourth quarter of 1998 to $1.4 million for the three months
ended March 31, 1999. General and administrative expense decreased as a
percentage of revenues from 72% in the first quarter of 1998 to 29% in the
fourth quarter of 1998 and increased from 29% in the fourth quarter of 1998 to
30% for the three months ended March 31, 1999. On an absolute dollar basis,
general and administrative expense increased sequentially throughout 1998 and
the three months ended March 31, 1999 primarily as a result of:

     - the addition of general and administrative headcount;

     - increase in professional services fees;

     - increase in rent and building expense resulting from the fourth quarter
       move into a new facility; and

     - growth in depreciation and amortization expense on computer equipment and
       leasehold improvements.

     General and administrative expense increased significantly in the first
quarter of 1999 due to the addition of accounting and finance personnel. General
and administrative expenses are expected to increase in absolute dollars over
the next two years. In particular, E-LOAN expects to record an expense of
approximately $900,000 in the three months ending June 30, 1999 in connection
with its donation of 75,000 shares of common stock to a charitable foundation in
May 1999.

     AMORTIZATION OF UNEARNED COMPENSATION. Amortization of unearned
compensation increased sequentially from $44,000 to $0.7 million from the first
to the fourth quarter of 1998 and increased to $6.6 million for the three months
ended March 31, 1999.

OTHER INCOME, NET

     Other income, net, is comprised of interest income on non-warehouse
facility borrowings. Other income, net, increased sequentially from $20,000 to
$0.1 million from the first to the fourth quarter of 1998 primarily due to an
increase of cash from the sale of equity securities. Other income, net,
decreased to $36,000 in the first quarter of 1999 due to a decrease in the
amount of cash.

                                       23
<PAGE>   28

COMPARISON OF YEARS ENDED DECEMBER 31, 1997 AND 1998 AND THREE MONTHS ENDED
MARCH 31, 1998 AND 1999

     The following table sets forth the results of operations for E-LOAN and
these results expressed as a percentage of total revenues:

<TABLE>
<CAPTION>
                                                                           THREE MONTHS
                                                     YEARS ENDED               ENDED
                                                     DECEMBER 31,            MARCH 31,
                                                 --------------------   -------------------
                                                  1997         1998      1998        1999
                                                 -------     --------   -------    --------
                                                                            (UNAUDITED)
<S>                                              <C>         <C>        <C>        <C>
Revenues.......................................  $ 1,043     $  6,832   $   527    $  4,802
Operating expenses:
  Operations...................................    1,319        7,626       779       4,104
  Sales and marketing..........................      470        5,642       513       3,657
  Technology...................................      102        1,248       163         481
  General and administrative...................      524        2,410       379       1,423
  Amortization of unearned compensation........       --        1,251        44       6,554
                                                 -------     --------   -------    --------
     Total operating expenses..................    2,415       18,177     1,878      16,219

Loss from operations...........................   (1,372)     (11,345)   (1,351)    (11,417)
  Other income, net............................       (2)         173        20          36
                                                 -------     --------   -------    --------
Net loss.......................................  $(1,374)    $(11,172)  $(1,331)   $(11,381)
                                                 =======     ========   =======    ========
</TABLE>

<TABLE>
<CAPTION>
                                                                            THREE MONTHS
                                                          YEAR ENDED           ENDED
                                                         DECEMBER 31,        MARCH 31,
                                                         -------------     --------------
                                                         1997     1998     1998     1999
                                                         ----     ----     -----    -----
                                                                            (UNAUDITED)
<S>                                                      <C>      <C>      <C>      <C>
AS A PERCENTAGE OF TOTAL REVENUES:

Revenues...............................................   100%     100%     100%     100%
Operating expenses:
  Operations...........................................   126      112      148       85
  Sales and marketing..................................    45       83       97       76
  Technology...........................................    10       18       31       10
  General and administrative...........................    50       35       72       30
  Amortization of unearned compensation................     0       18        8      136
     Total operating expenses..........................   232      266      356      338

Loss from operations...................................  (132)    (166)    (256)    (238)
  Other income, net....................................     0        3        4        1
Net loss...............................................  (132)%   (164)%   (253)%   (237)%
                                                         ====     ====     ====     ====
</TABLE>

REVENUES

     Revenues for the year ended December 31, 1998 increased $5.8 million to
$6.8 million as compared to $1.0 million for the same period in 1997 and from
$0.5 million in the first three months of 1998 to $4.8 million in the first
three months of 1999. This increase resulted primarily from growth in the number
of loans closed and the initiation of E-LOAN's loan origination and sale
operations in June 1998. E-LOAN expects that the rate of its revenue growth in
future periods will decline from the rates of revenue growth experienced in
recent quarters.

                                       24
<PAGE>   29

OPERATING EXPENSES


     TOTAL OPERATING EXPENSES. Total operating expenses increased $15.8 million
to $18.2 million for the year ended December 31, 1998 as compared to $2.4
million in 1997. The increase is primarily due to a $6.5 million increase in
compensation and benefits and a $4.8 million increase in sales and marketing
expenses. Total headcount increased from 40 at December 31, 1997 to 224 at
December 31, 1998. The sales and marketing increase is primarily related to the
initiation of a major advertising campaign and increased costs related to third
party distribution agreements. See Note 14 of Notes to Financial Statements.



     Total operating expenses increased $14.3 million to $16.2 million in the
first quarter of 1999 as compared to $1.9 million in the first quarter of 1998.
The increase is primarily due to a $2.9 million increase in compensation and
benefits, a $2.8 million increase in advertising and marketing and a $6.5
million increase in amortization of unearned compensation. See Note 14 of Notes
to Financial Statements.


     OPERATIONS. Operations expense increased $6.3 million to $7.6 million for
the year ended December 31, 1998 as compared to $1.3 million in 1997 and
decreased as a percentage of revenues from 126% to 112% for the same period. The
absolute dollar increase was attributable to an operations headcount increase to
187 as of December 31, 1998 from 27 as of December 31, 1997. This increase was
primarily necessary to support the growth in E-LOAN's origination volume and to
establish its loan origination and sale operations. The decrease as a percentage
of revenues was primarily due to revenues growing much faster than operations
expense.

     Operations expense increased $3.3 million to $4.1 million in the first
three months of 1999 as compared to $0.8 million in the first three months of
1998 and decreased as a percentage of revenues from 148% to 85% for the same
period. The absolute dollar increase is primarily due to the increase in
operations headcount, including the addition of a Senior Vice President of
Operations. Operations expense as a percentage of revenues decreased from the
first quarter of 1998 to the first quarter of 1999 due to increased revenues
compared to the growth of expenses as well as efficiencies obtained from the
implementation of new policies and procedures.

     SALES AND MARKETING. Sales and marketing expense increased $5.1 million to
$5.6 million for 1998, as compared to $0.5 million for 1997 and increased as a
percentage of revenues from 45% to 83% for the same period. These increases were
primarily attributable to:

     - the initiation of a major advertising campaign in 1998;

     - increased costs related to third party distribution partnership
       agreements; and

     - the addition of sales and marketing personnel.

     Sales and marketing headcount increased to six as of December 31, 1998 from
three as of December 31, 1997.

     Sales and marketing expense increased $3.2 million to $3.7 million in the
first three months of 1999 as compared to $0.5 million in the first three months
of 1998 and decreased as a percentage of revenues from 97% to 76% for the same
period. The absolute dollar increase is primarily due to the increased costs
related to third party distribution partnership agreements as well as the
continued increase in advertising expenditures. Sales and marketing expense
decreased as a percentage of revenues, from the first quarter of 1998 to the
first quarter of 1999 due to a more rapid increase in revenue growth compared to
the increase in expenses.

     TECHNOLOGY. Technology expense increased $1.1 million to $1.2 million for
1998, as compared to $0.1 million for 1997 and increased as a percentage of
revenues from 10% to 18% for the same period. These increases were primarily the
result of the growth in engineering and management information systems personnel
to 14 as of December 31, 1998 from two as of December 31, 1997 to support the
initiation of online operations in June 1997.

                                       25
<PAGE>   30

     Technology expense increased to $0.5 million in the first three months of
1999 as compared to $0.2 million in the first three months of 1998 and decreased
as a percentage of revenues from 31% to 10% for the same period. Technology
expenses increased in absolute dollars due to the addition of engineering
headcount. Technology expenses decreased as a percentage of revenue from the
first quarter of 1998 to the first quarter of 1999 due to a more rapid increase
in revenues compared to the increase in expenses.

     GENERAL AND ADMINISTRATIVE. General and administrative expense increased
$1.9 million to $2.4 million for 1998, as compared to $0.5 million for 1997 and
decreased as a percentage of revenues from 50% to 35% for the same period. The
absolute dollar increase is primarily attributable to:

     - the addition of general and administrative headcount;

     - increase in rent and building expense resulting from the move into a new
       facility; and

     - growth in depreciation and amortization expense on computer equipment and
       leasehold improvements.

     General and administrative headcount increased to 15 as of December 31,
1998 from eight as of December 31, 1997. The decrease as a percentage of
revenues was primarily due to revenues growing much faster than general and
administrative expense.

     General and administrative expense increased $1.0 million to $1.4 million
in the first three months of 1999 as compared to $0.4 million in the first three
months of 1998 and decreased as a percentage of revenues from 72% to 30% for the
same period. The absolute dollar increase is primarily due to an increase in
payroll and related expenses, increased facility costs and increased
depreciation associated with the purchase of capital assets. General and
administrative expense decreased as a percentage of revenues from the first
quarter of 1999 to the first quarter of 1999 due to a more rapid increase in
revenues compared to expenses.

     AMORTIZATION OF UNEARNED COMPENSATION. Amortization of unearned
compensation increased from zero to $1.3 million for the year ended December 31,
1998. Amortization of unearned compensation increased from $44,000 to $6.6
million for the three months ended March 31, 1998 compared to the same period in
1999.

OTHER INCOME, NET

     Other income, net, increased from an expense of $2,000 in 1997 to income of
$0.2 million for the year ended December 31, 1998. The increase is attributable
to interest income on cash proceeds from sale of equity partially offset by
interest expense on non-warehouse facility borrowings.

     Other income, net, increased from $20,000 in the first quarter of 1998 to
$36,000 in the first quarter of 1999 due to interest income on cash and cash
equivalents, partially offset by interest expense on non-warehouse facility
borrowings.

INCOME TAXES

     As of December 31, 1998 and March 31, 1999, E-LOAN had approximately $10.5
million and $14.0 million, respectively, of federal and state net operating loss
carryforwards for tax reporting purposes available to offset future taxable
income. E-LOAN's federal net operating loss carryforwards begin to expire in
2011. Certain future changes in share ownership of E-LOAN, as defined in the Tax
Reform Act of 1986, may restrict the utilization of carryforwards. A valuation
allowance has been recorded for the entire deferred tax asset at December 31,
1999 and March 31, 1999 as a result of uncertainties regarding the realization
of the asset due to the lack of E-LOAN's earnings history.

                                       26
<PAGE>   31

LIQUIDITY AND CAPITAL RESOURCES

     Since inception, E-LOAN has financed its operations primarily through
private placements of convertible preferred stock and borrowings under warehouse
lines of credit and other credit facilities. As of December 31, 1998 and March
31, 1999, E-LOAN had approximately $9.1 million and $3.6 million in cash and
cash equivalents, respectively.

     E-LOAN's sources of cash flow include cash from the sale of mortgage loans,
borrowings under warehouse lines of credit and other credit facilities,
brokerage fees, interest income, and the sale of equity securities. E-LOAN's
uses of cash include the funding of mortgage loans, repayment of amounts
borrowed under warehouse lines of credit, operating expenses, payment of
interest, and capital expenditures primarily comprised of furniture, fixtures,
computer equipment, software and leasehold improvements. Net cash used in
operating activities was ($1.2), ($50.4) and ($25.4) million in 1997, 1998 and
the first three months of 1999, respectively. Net cash used in operating
activities was primarily due to an increase in net losses and increase in
mortgage loans held for sale.

     Net cash used in investing activities was $0.2, $1.6 and $.4 million in
1997, 1998, and the first three months of 1999, respectively. Net cash used in
investing activities during these periods was primarily for the purchase of
furniture and equipment.

     Net cash provided by financing activities was $5.5, $56.9 and $20.2 million
in 1997, 1998 and the first three months of 1999, respectively. Net cash
provided in these periods was primarily from the sale of preferred stock and
borrowings under E-LOAN's warehouse lines of credit and other credit facilities,
partially offset by repayments of warehouse lines of credit.

     At December 31, 1998, E-LOAN had a warehouse line of credit for borrowings
up to approximately $18.8 million, including a temporary overdraft limit of
approximately $3.8 million for interim financing of mortgage loans. The interest
rate charged on borrowings against the warehouse line of credit was 2.0% over
the 30 day commercial paper rate of the lender. Borrowings are collateralized by
the mortgage loans held for sale. The warehouse line of credit expires on June
30, 1999. Upon expiration, management believes that it will either renew its
existing line or obtain sufficient additional lines. At December 31, 1998 and
March 31, 1999, approximately $15.0 million and $19.9 million was outstanding
under this warehouse line of credit. On April 23, 1999, the amount of the
warehouse line of credit was increased to $25.0 million and the expiration date
was extended to April 20, 2000.

     At December 31, 1998, E-LOAN had a commitment from a third party to finance
up to $35 million of E-LOAN's mortgage loan inventory. The funds borrowed
pursuant to this commitment are secured by the related mortgage loans and accrue
interest at LIBOR plus 1.25%. This agreement includes various non-financial
negative and affirmative covenants. Either E-LOAN or the lender can terminate
the agreement at any time. At December 31, 1998 and March 31, 1999,
approximately $26.1 million and $17.1 million was outstanding under this
financing commitment, respectively. In May 1999, the amount of the warehouse
line of credit was increased to $100 million committed funds and an additional
$100 million uncommitted funds after the closing of the initial public offering.
The line expires May 20, 2000.

     As of December 31, 1998 and March 31, 1999 the principal source of
liquidity for E-LOAN was $9.1 million and $3.6 million in cash and cash
equivalents and $4.4 million and $9.2 million in unused credit facilities. In
December 1998, E-LOAN entered into two credit facilities for working capital and
equipment financing in the aggregate amount of $5.0 million. The first credit
facility in the amount of $1.5 million has an interest rate of prime plus 0.5%.
This facility expires in one year. The second credit facility is a $3.5 million
term loan with an interest rate of prime plus 0.5%. As of December 31, 1998,
$642,000 was outstanding under these two credit facilities. In January 1999,
E-LOAN entered into a warehouse line of credit agreement for borrowings of up to
$40 million for interim financing of mortgage loans. The interest rate charged
on borrowings

                                       27
<PAGE>   32

under the line of credit is equal to 1.85% per annum over the monthly average
LIBOR rate. The line of credit expires in January 2000. At March 31, 1999,
approximately $15 million was outstanding under this line. In March 1999, E-LOAN
entered into an agreement for a revolving line of credit in the amount of $5.0
million with an interest rate based on the prime rate. The line expires at the
earlier of March 2000 or the closing of E-LOAN's initial public offering and is
guaranteed by two of our founding stockholders. There were no amounts
outstanding on this line at March 31, 1999.

     E-LOAN has entered into several marketing service agreements with third
parties. Under these agreements, the third parties display E-LOAN's logo and
loan information on their websites and provide related marketing services.
E-LOAN pays for these services in minimum monthly and quarterly installments
plus, in some cases, a per view charge for each time the information is
displayed. Future minimum payments under these agreements are $5.5 million in
1999, $2.3 million in 2000 and $212,000 in 2001.

     E-LOAN believes that its existing cash and cash equivalents, the net
proceeds from this offering and existing and available credit facilities will be
sufficient to fund its operating activities, capital expenditures and other
obligations for the foreseeable future. However, if during that period or
thereafter E-LOAN is not successful in generating sufficient cash flow from
operations, or in raising additional capital when required in sufficient amounts
and on terms acceptable to E-LOAN, these failures could have a material adverse
affect on E-LOAN's business, results of operations and financial condition. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of its then-current stockholders would be reduced.

DISCLOSURE ABOUT MARKET RISK

     Interest rate movements significantly impact E-LOAN's volume of closed
loans and represent the primary component of market risk to E-LOAN. In a higher
interest rate environment, consumer demand for mortgage loans, particularly
refinancing of existing mortgages, declines. Interest rate movements affect the
interest income earned on loans held for sale, interest expense on the warehouse
lines payable, the value of mortgage loans held for sale and ultimately the gain
on sale of mortgage loans. In addition, in an increasing interest rate
environment, E-LOAN's mortgage loan brokerage volume is adversely affected.

     E-LOAN originates mortgage loans and manages the market risk related to
these loans by pre-selling them on a best efforts basis to the anticipated
purchaser at the same time that E-LOAN establishes the borrowers' interest
rates. If E-LOAN can process loans within the applicable purchasers' commitment
timeframes E-LOAN has no interest rate risk exposure on the loans. However, if
E-LOAN cannot process the loan within this timeframe and interest rates
increase, E-LOAN may experience a reduced gain or may even incur a loss on the
sale of the loan. See "Risk Factors -- Uncertainty with respect to the time it
takes to close loans can lead to unpredictable revenue and profitability".

     With the exception of pre-selling loans through best-efforts commitments,
E-LOAN currently does not engage in any hedging activities.

     E-LOAN currently does not maintain a trading portfolio. As a result, E-LOAN
is not exposed to market risk as it relates to trading activities. The majority
of E-LOAN's portfolio is held for sale which requires E-LOAN to perform market
valuations of its pipeline, its mortgage portfolio held for sale and related
forward sale commitments in order to properly record the portfolio and the
pipeline at the lower of cost or market. Therefore, E-LOAN monitors the interest
rates of its loan portfolio as compared to prevailing interest rates in the
market.

     Because E-LOAN pre-sells its mortgage loan commitments forward, E-LOAN
believes that a 100 basis point increase or decrease in long-term rates would
not have a significant adverse effect on E-LOAN's earnings from its interest
rate sensitive assets. E-LOAN pays off the

                                       28
<PAGE>   33

warehouse lines payable when the loan is sold and consequently would not be
expected to incur significant losses from an increase in interest rates on the
line due to the short timeframe that the line is drawn down. However, since a
high percentage of E-LOAN's closed loan volume is from refinancings, E-LOAN's
future operating results are more sensitive to interest rate movements than a
mortgage lender who has a lower proportion of refinancings.

     In the future, if E-LOAN does not pre-sell the mortgage commitments, its
market risk could change significantly.

RECENT ACCOUNTING PRONOUNCEMENTS

     On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (SFAS No. 133). SFAS No. 133 is effective for
all fiscal quarters of all fiscal years beginning after June 15, 1999 (January
1, 2000 for E-LOAN). SFAS No. 133 requires that all derivative instruments be
recorded on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. E-LOAN is in the
process of evaluating the impact of SFAS No. 133 on its financial statements.

     In October 1998, the Financial Accounting Standards Board issued SFAS No.
134, Accounting for Mortgage-Backed Securities Retained after the Securitization
of Mortgage Loans Held for Sale by a Mortgage Banking Enterprise. SFAS No. 134
amends SFAS No. 65, Accounting for Certain Mortgage Backed Securities, to
require that after an entity that is engaged in mortgage banking activities has
securitized mortgage loans that are held for sale, it must classify the
resulting retained mortgage-backed securities or other retained interests based
on its ability and intent to sell or hold those investments. This statement is
effective for the first fiscal quarter beginning after December 15, 1998, with
earlier application encouraged. At this time, E-LOAN does not anticipate any
impact from the adoption of this standard.

     The American Institute of Certified Public Accountants issued Statement of
Position ("SOP") No. 98-1, "Software for Internal Use," which provides guidance
on accounting for the cost of computer software developed or obtained for
internal use. SOP No. 98-1 is effective for financial statements for fiscal
years beginning after December 15, 1998. SOP No. 98-1 did not have a material
impact on E-LOAN's March 31, 1999 financial statements.

YEAR 2000

     Many currently installed computer systems and software products only accept
two digits to identify the year in any date. Thus, the year 2000 will appear as
"00", which the system might consider to be the year 1900 rather than the year
2000. This could result in system failures, delays or miscalculations. Computer
systems and software that have not been developed or enhanced recently may need
to be upgraded or replaced to comply with Year 2000 requirements.

     We use multiple software systems and products developed by third party
vendors, including systems and products used in operations and finance, and
systems that operate our facilities. We are currently in the process of
requesting compliance certificates from these vendors to certify their Year 2000
readiness. We have received compliance certificates from substantially all of
these vendors.

     Our Year 2000 testing is complete and found to be compliant by an outside
testing agency, Valencia Software Systems. We tested our computer systems,
website and loan processing systems during March and April 1999. Our tests
focused on date boundary crossing problems, in particular from December 31, 1999
through January 2, 2000. All systems operated as expected

                                       29
<PAGE>   34

and without incident. Procedures are in place to review all future changes to
ensure that Year 2000 problems are not introduced with system upgrades.

     The Internet operations of many of our customers and suppliers may be
affected by Year 2000 complications. The failure of our customers or suppliers
to ensure that their systems are Year 2000 compliant could have an adverse
effect on our customers and suppliers, resulting in decreased Internet usage or
our inability to obtain necessary data communication and telecommunication
capacity, which in turn could have an adverse effect on our business, results of
operations and financial condition.

     The potential worst case scenario includes:

     - slowdown in online applications due to a general failure of the Internet;

     - corruption of data in our internal information systems;

     - delays in our processing capabilities that depend on third-party systems;

     - financial losses associated with delays in closing loans; and

     - failure of infrastructure services provided by third parties, including
       public utilities and Internet service providers.

     We have not incurred significant costs to date complying with Year 2000
requirements, and we do not believe that we will incur significant costs for
this purpose in the foreseeable future. If we discover any Year 2000 errors or
defects in our internal systems, we could incur substantial costs in making
repairs. The resulting disruption of our operations could seriously damage our
business.

                                       30
<PAGE>   35

                                    BUSINESS

     E-LOAN is a leading online provider of mortgages, offering consumers the
ability to obtain the most suitable mortgages from a wide array of lenders at
substantial savings. E-LOAN's easy-to-use website enables borrowers to search
through over 50,000 products provided by over 70 lending sources to find the
most competitively priced loans that match the borrowers' criteria. Borrowers
can analyze and compare loans online as well as receive unbiased loan
recommendations based on their personal criteria and financial characteristics.
E-LOAN offers origination cost savings of over 50% compared to obtaining a
mortgage through traditional mortgage brokers or single source lenders. E-LOAN
provides complete transaction fulfillment and a high level of service through
customer service representatives assigned to each borrower and the proprietary
E-Track loan monitoring service. E-LOAN is the exclusive mortgage provider for
co-branded loan centers that E-LOAN has established with leading websites,
including Yahoo!, E*Trade, DLJdirect, Telebank and CBS MarketWatch. In 1998 and
the first quarter of 1999, E-LOAN was the leader in the online mortgage market
with approximately $1 billion and $490 million in closed loans originated,
respectively, including E-LOAN's estimate of closed loan volume from referrals.

INDUSTRY BACKGROUND

     ELECTRONIC COMMERCE

     The Internet has emerged as a global medium for communication, information
and commerce. International Data Corporation estimates that there were 97
million Internet users worldwide at the end of 1998 and anticipates this number
will grow to approximately 320 million users by the end of 2002. The Internet
possesses a number of unique characteristics that differentiate it from
traditional media and methods of commerce, including:

     - users communicate or access information without geographic or temporal
       limitations;

     - companies can reach and serve a large and global group of customers
       electronically from a central location;

     - companies can provide personalized, low-cost and real-time customer
       interaction;

     - users enjoy greater privacy and face less sales pressure; and

     - users have an enormous diversity of easily accessible content and
       commerce offerings.

     As a result of these unique characteristics and the Internet's growing
adoption rate, businesses have an enormous opportunity to conduct commerce over
the Internet. International Data Corporation estimates that commerce over the
Internet will increase from approximately $32 billion worldwide in 1998 to
approximately $130 billion worldwide in 2000. While many companies initially
focused on facilitating and conducting transactions between businesses over the
Internet, more recently there has been a proliferation of companies focused on a
wide variety of consumer transactions. These companies have typically offered
products and services that do not necessarily require the customer's physical
presence to purchase, including books, CDs, videocassettes, automobiles,
mortgages, airline tickets and online banking and stock trading. The Internet
gives these companies the opportunity to develop one-to-one relationships with
customers worldwide without having to make the significant investments to build
and manage a local market presence or develop the printing and mailing
capabilities associated with traditional direct marketing activities.

     TRADITIONAL UNITED STATES MORTGAGE MARKET

     The Mortgage Bankers Association estimates the United States mortgage
market to total over $4.3 trillion in terms of loans outstanding and projects
mortgage originations of new mortgage loans to be $1.2 trillion in 1999.

                                       31
<PAGE>   36

     The mortgage industry is divided broadly into four major segments today:

     - mortgage origination -- sourcing, verification and documentation of
       mortgage loans, typically done by mortgage brokers and single-source
       lenders;

     - mortgage funding -- underwriting, funding and selling closed loans to
       mortgage loan purchasers;

     - securitization -- aggregating loans for sale into the secondary market;
       and

     - servicing -- ongoing billing, collection and foreclosure/collateral
       management.

     Over the past two decades, the mortgage industry has evolved dramatically.
Until the late 1970s, retail banks and savings and loan institutions originated
loans through their branches, underwrote and closed loans internally, funded
loans from their own customer deposits and then serviced the loans themselves.
This internal chain of production was broken by the emergence of the pure
mortgage bank that could buy mortgages from mortgage brokers and sell to
government sponsored mortgage investors, most significantly Fannie Mae and
Freddie Mac, and the development of a large, liquid secondary funding and
trading market for mortgage debt. This efficient new market for mortgage funding
made it viable for the first time to uncouple from the large retail banks both
the front-end functions of mortgage origination and mortgage funding and the
back-end function of servicing.

     A significant transformation of the mortgage origination, banking and
servicing businesses into specialized functions conducted primarily by
independent companies has also occurred during the last two decades. This
transformation has created both a large, concentrated and efficient secondary
mortgage market and a large, fragmented and inefficient mortgage origination and
banking market. There are approximately 20,000 mortgage brokerage operations in
the United States, according to the National Association of Mortgage Brokers.
However, there is no multi-lender originator that operates nationally and enjoys
a widely recognized consumer brand. In 1997, no mortgage originator had over 7%
market share. While increased competition at all levels of the industry has
resulted in tremendous innovation in the mortgage choices available to
consumers, the level of complexity associated with these loans has also
increased. In addition, the underwriting and lending processes remain paper and
time-intensive, with little visibility into the process for consumers. As a
result, we believe that the traditional mortgage lending process causes many
consumers to feel:

     - uncertain that their single source lenders and brokers are providing
       unbiased advice and recommending the most suitable mortgage products;

     - skeptical that rates initially quoted will ultimately be available;

     - intimidated by the number and variety of mortgage products available;

     - pressured to commit to a particular product before they have researched
       and compared products to their satisfaction;

     - frustrated with the amount and types of fees they are required to pay;
       and

     - overwhelmed by the substantial time and effort that it takes to get a
       mortgage loan.

     Many borrowers receive little ongoing assistance in managing their debt
after the loan is closed. Many direct lenders who also engage in mortgage
servicing are not committed to proactive monitoring of their customers' loans
because they risk losing servicing fees if customers refinance with other
lenders. Multi-lender brokers have the incentive to pursue refinancing
opportunities, but typically lack the technological capability to proactively
monitor for large customer bases the market changes of thousands of loan
products in real time.

     MARKET OPPORTUNITY FOR ONLINE MORTGAGE ORIGINATION

     According to Forrester Research, the market for online mortgage
originations is expected to grow from an estimated $18.7 billion in 1999 to over
$91.2 billion in 2003, representing an

                                       32
<PAGE>   37

increase in online penetration of the existing market from 1.5% in 1999 to 9.6%
in 2003. Mortgage origination is well suited to an Internet-based distribution
model for a number of reasons, including:

     - mortgages are information products that need no physical delivery or
       warehousing;

     - complex mortgage products can be made more understandable through the use
       of graphical and dynamic real-time presentations, including explanation
       of terminology and ready access to detailed supporting information;

     - borrower data can be efficiently captured through a website, allowing
       real time automated underwriting and streamlined overall processing; and

     - costly local offices or brokers and the expensive fee structure
       associated with the traditional distribution model are not required.

     Many companies have attempted to address this significant market
opportunity. Existing mortgage banks have created websites to sell their loans
directly online as an alternative front end to the traditional process. These
sources, however, do not offer the consumer a multi-lender selection or
comparison of products and may be reluctant to reduce fees due to the risk of
cannibalizing their traditional distribution channels.

     A number of websites have been created that act as multi-lender
distribution channels for mortgage banks. While many of these referral sites
offer a selection of lenders, they do not offer complete transaction fulfillment
for the consumer and, therefore, do not control the entire mortgage process.
Because these websites do not eliminate the services of commissioned loan
agents, they are unable to substantially reduce the cost to the consumer of
securing a mortgage.

     As a result of the shortcomings inherent in these and other online
approaches to mortgage origination, we believe there exists a significant market
opportunity for a centralized, globally accessible and easy-to-use online
service with a broad selection of lenders, a compelling value proposition based
upon saving borrowers money, time and effort, and an open, integrated service
that provides complete transaction fulfillment.

THE E-LOAN SOLUTION

     E-LOAN is a leading online provider of mortgages offering consumers the
ability to obtain the most suitable mortgage from a wide array of lenders at
substantial savings. Utilizing E-LOAN's website, borrowers can efficiently
search, analyze and compare mortgage products offered by multiple lenders and
apply for, qualify for and obtain the mortgage product that is most compatible
with their individual financial characteristics and borrowing requirements.
E-LOAN also enables borrowers to track online the status of their mortgage
applications from submission through closing and to monitor their mortgages on
an ongoing basis after closing. E-LOAN recognizes the importance to borrowers of
selecting the right mortgage product and performing ongoing debt management
given that mortgages typically represent the single largest debt component of an
individual's financial portfolio. To assist borrowers in this regard, E-LOAN
provides unbiased recommendations as well as an array of online analytical and
product comparison tools. E-LOAN also provides a high level of customer service
designed to make the mortgage process significantly more streamlined,
transparent to the borrower and efficient. In 1998 and the first quarter of
1999, E-LOAN was the leader in the online mortgage market with approximately $1
billion and $490 million in closed loans originated, respectively, including
E-LOAN's estimate of closed loan volume from referrals.

     The E-LOAN solution provides the following key advantages to its customers:

     LARGE SELECTION OF MORTGAGE PRODUCTS. E-LOAN offers mortgages from over 70
lending sources, including nationally-recognized institutions. Each customer
inquiry triggers a proprietary rate search algorithm that sorts through over
50,000 products updated in real time. The result,

                                       33
<PAGE>   38

delivered in seconds, is a set of the most competitively priced loans that best
match the customer's criteria. E-LOAN believes this large selection of lenders
and loans available in a single destination saves borrowers time and effort in
searching for and obtaining the most suitable mortgage.

     SIGNIFICANT CUSTOMER SAVINGS. E-LOAN offers savings of over 50% on the
origination costs of obtaining mortgages from traditional mortgage brokers or
single source lenders. These savings are possible because of the elimination of
the commissioned loan agent, who typically charges an origination fee of 1.25%
to 1.5% of the loan. E-LOAN's origination fee, by contrast, is 0.625% of the
loan, or just half of the lower end of the typical commission range. Because the
origination fee is the single largest nonrecurring fee, accounting for
approximately 40% of the total nonrecurring loan fees, a reduction of 50% or
more in that fee provides substantial customer savings in the overall
transaction. Other nonrecurring loan expenses include underwriting, appraisal,
insurance and closing fees.

     UNBIASED LOAN RECOMMENDATIONS. E-LOAN provides the borrower with unbiased
recommendations regarding available loan products. E-LOAN formulates its
recommendations by using powerful, comparative and analytical tools designed to
assist the borrower in determining the most suitable mortgage. These
recommendations are based solely upon borrower-provided information and
criteria. This approach differs substantially from that of traditional brokers,
who often recommend and promote mortgage products based on associated
commissions, which can vary by lender. By contrast, E-LOAN charges the same
brokerage fee regardless of whether the loans are funded internally or through
other lenders.

     EASY-TO-USE SERVICE WITH VALUE-ADDED FEATURES. E-LOAN's website enables
borrowers to easily and efficiently search, analyze and compare mortgage
products offered by multiple lenders in complete privacy, on their own time and
free from the sales pressures typically experienced offline. Prospective
borrowers can also determine online which mortgage products they qualify for
based on their individual financial characteristics and borrowing requirements
and ultimately apply for and obtain the selected mortgage product. E-LOAN offers
a number of value-added features designed to further promote a more open and
borrower-oriented loan process. For example, E-LOAN's unique E-Track service
enables borrowers to monitor the status of their loans at every stage of the
lending process in real time, removing much of the uncertainty and inconvenience
that has tended to reduce borrowers' comfort in obtaining a loan.

     HIGH LEVEL OF CUSTOMER SERVICE. E-LOAN is committed to providing a high
level of customer service, as evidenced by referrals received from satisfied
customers. Because customer service is a strategic priority, E-LOAN bases the
compensation of its loan production personnel in part on their contribution to
improving customer satisfaction. E-LOAN implements its customer service
objectives by:

     - providing consumer resources through its information rich website, which
       includes a comprehensive guide to every aspect of the mortgage process;

     - working with the customer throughout the entire transaction process, in
       contrast to many online websites which refer customers to third party
       lenders;

     - assigning a personal customer service representative to each borrower to
       serve as a single point of contact and support throughout the entire loan
       process;

     - providing borrowers with a real time window into every stage of the
       lending process through its proprietary E-Track service; and

     - maintaining a call center to respond promptly to phone and e-mail
       inquiries.

     ONGOING MORTGAGE MONITORING. E-LOAN enables customers to optimize refinance
decisions by continuously comparing their existing loan to new products
available in the market and alerting them to opportunities to save money over
the life of their loan. E-LOAN's monitoring algorithm takes into account the
borrower's investment objectives, prospective hold period, risk

                                       34
<PAGE>   39

profile and marginal tax rate. E-LOAN's monitoring capability promotes long-term
relationships with its customers.

THE E-LOAN STRATEGY

     The E-LOAN strategy is to be the leading Internet-based provider of
mortgages and debt management services for consumers worldwide. Key elements of
the E-LOAN strategy include:

     GROW CORE CONSUMER MORTGAGE BUSINESS. E-LOAN intends to become a leading
originator of single family mortgage loans, capturing market share from
traditional funding sources by delivering to its customers significant cost
savings, unparalleled product choice and unbiased advice and assistance. E-LOAN
believes that its Internet-based business model will continue to reduce the
costs and inefficiencies in mortgage origination and increase the productivity
of its mortgage operation through reduced brokerage commissions and ongoing
process improvements. In addition, E-LOAN's ability to control the entire loan
fulfillment process will provide a more efficient and consistent customer
experience. Over time, E-LOAN expects to enhance its product offerings,
capitalizing on its customer base, brand name and fulfillment capabilities by
expanding into additional activities customers may need as part of their ongoing
debt management efforts. As part of an alliance with Stater BV, E-LOAN has
established an online mortgage origination subsidiary to serve the European
market. Additionally, under a joint venture agreement with Softbank Corp.,
E-LOAN holds a minority interest in E-LOAN Japan, a Japanese corporation that
will develop, market and provide an online mortgage marketplace to serve
consumers in Japan and the Republic of Korea. E-LOAN intends to continue to
expand into other key international markets in the future.

     EXPAND MULTI-SOURCE LENDING CAPABILITIES. E-LOAN believes that its ability
to satisfy customers' specific borrowing requirements by offering the most
comprehensive selection of mortgages available nationwide is one of its greatest
competitive advantages. Accordingly, E-LOAN intends to continue to broaden the
number and variety of its mortgage products and lending sources.

     USE TECHNOLOGY TO BRING BORROWERS AND CAPITAL MARKETS CLOSER
TOGETHER. E-LOAN intends to continue to streamline and automate mortgage
origination and underwriting processes in order to enable borrowers to more
directly benefit from the cost, speed and convenience of highly efficient
secondary mortgage markets. By continually incorporating and upgrading automated
underwriting techniques and technologies into our service, E-LOAN will increase
its ability to match borrowers with lenders earlier in the process, resulting in
reduced documentation requirements, faster approval and lower pricing. E-LOAN
believes these techniques and technologies will enable it to provide the most
cost-effective and tailored mortgage solutions for its customers.

     ENHANCE BRAND AWARENESS AND CUSTOMER LOYALTY. E-LOAN intends to become the
first national multi-source lender with a widely recognized consumer brand name.
E-LOAN uses both traditional and online marketing strategies to maximize
customer awareness and enhance brand recognition. Through its advertising and
promotional activities, E-LOAN targets prospective homebuyers, homeowners and
Realtors interested in efficient, easy and economical mortgage origination.
Traditional advertising efforts include a mix of radio, television, outdoor and
print campaigns aimed at building brand awareness nationwide. E-LOAN also
partners with many leading financial services-related online companies,
including Yahoo!, E*Trade, DLJdirect, Telebank and CBS MarketWatch. Online
partnering arrangements include placing a mortgage center on partners' websites,
placing links and banner advertisements on those sites and establishing mortgage
monitoring services for those partners' customers. In addition, E-LOAN will
continue to focus on promoting customer loyalty and maximizing the lifetime
value of its customer relationships through the implementation of superior
personalization features and the continuous enhancement of its customer service
offerings. E-LOAN also intends to extend its

                                       35
<PAGE>   40

traditional and online marketing strategies to international markets to develop
brand recognition abroad as it expands into foreign markets.

     HELP CONSUMERS MONITOR AND MANAGE THEIR DEBT. By assisting consumers in
monitoring and managing their mortgages, E-LOAN intends to transform what have
traditionally been single origination transactions into long-term, mutually
beneficial relationships. Since mortgages typically comprise the single largest
consumer liability, E-LOAN has a unique opportunity to build valuable ongoing
relationships with its customers. E-LOAN's services include continuous loan
monitoring that provide customers with unbiased assistance in refinancing
decisions and promotes long-term customer relationships. Recognizing that
mortgage and mortgage-related financing represent the lowest cost, most tax
efficient capital for consumers, E-LOAN intends to further develop its services
and product offerings to assist customers in managing their overall debt
portfolio, with the objective of maintaining the lowest overall cost of debt.

PRODUCTS AND SERVICES

     E-LOAN is an online service that offers first mortgages to homebuyers and
homeowners seeking to refinance, along with second mortgages and home equity
lines of credit. E-LOAN handles all aspects of loan origination, including
quoting rates, collecting and verifying borrower data, locking the rate,
pre-underwriting the loan package, communicating with the lender and arranging
for appraisal and settlement services for the borrower. In addition, E-LOAN can
provide complete transaction fulfillment, including underwriting, funding and
packaging loans for sale to the secondary markets. Through its easy to use
website, E-LOAN offers:

     LOAN PRODUCTS. E-LOAN has relationships with over 70 lending sources who
are eligible to quote product rates on E-LOAN's website. E-LOAN's website
currently offers a wide array of loan products, including 30-year and 15-year
fixed rate loans, a variety of adjustable rate mortgages (ARMs),
fixed/adjustable products, products with balloon payments, second mortgages and
home equity lines of credit.

     RATE SEARCH. E-LOAN's database contains rates for over 50,000 loan products
at any given time and is updated multiple times daily. Prospective borrowers can
quickly obtain customized rate quotes for multiple loan types and amounts in a
single search by completing a brief questionnaire. E-LOAN's search function
features an algorithm that identifies the most competitive products available
based on individual borrower information and the total costs of the various
products, including applicable interest rates, points and fees. Borrowers can
click on a link to see even more loans of those types if they so choose.

     LOAN COMPARISON. Borrowers can compare loans returned from a rate search. A
basic comparison shows how any two loans differ on rate, points, prepayment
penalties, interest rate costs over time, and, for ARMs, life cap, index type,
margin and periodic adjustments. An advanced comparison allows borrowers to
forecast how the loans would perform based on various interest rate scenarios
and taking into account debt objectives, hold periods, return on other
investments and marginal tax rates.

     LOAN RECOMMENDATIONS. To help borrowers find the most suitable loan among
the broad array of available products, E-LOAN provides a recommendation feature.
This feature consists of a brief questionnaire that enables borrowers to
describe their investment objectives and prospective hold period, select an
interest rate scenario and indicate the loan amount sought. E-LOAN's proprietary
algorithm uses this information to deliver a set of suitable loan products.
Borrowers can then adjust various parameters, such as the hold period or
interest-rate scenario, to see how that recommendation might change.

     E-TRACK. E-LOAN has developed a proprietary online tracking system,
E-Track, in order to make the mortgage process more open and convenient for
consumers. E-Track allows borrowers to track the progress of their loan
application as well as the amount of anticipated closing costs

                                       36
<PAGE>   41

from preliminary estimate to final settlement. E-LOAN establishes an E-Track
account for each borrower at the time an application is completed online. Each
E-Track account is personalized and password-protected, and contains:

     - a timeline of the loan application and approval process;

     - an updated list of estimated closing costs, including explanations of all
       disclosure terms;

     - a product details page explaining all of the terms of the loan;

     - a list of the documents required by the lender in order to approve the
       application;

     - an area where a borrower can request an interest rate commitment online;

     - contact information, status and results of appraisal; and

     - contact information for designated customer service representatives.


     All of these items are updated in real time as the loan application is
processed, thereby enabling borrowers to keep close track of their progress
anytime.



     RATE WATCH. The Rate Watch service allows prospective borrowers to input a
target interest rate for the desired loan type. E-LOAN searches its database of
over 50,000 loan products on a daily basis to determine if a product has become
available that meets the borrower's criteria. If a suitable product is found,
the borrower receives an e-mail alert inviting them to visit E-LOAN's website
and apply for the loan.



     MORTGAGE MONITOR. The Mortgage Monitor service allows the prospective
borrower to input the terms for an existing mortgage and immediately compare
that loan to all other suitable products available through E-LOAN. In addition,
the prospective borrower can choose to receive an e-mail alert whenever a
product becomes available that can beat that rate. All E-LOAN customers are
automatically enrolled in the Mortgage Monitor service once their loan closes.



     PRE-QUALIFICATION/PRE-APPROVAL SERVICES. E-LOAN assists prospective
borrowers in making their home buying decisions by enabling them to determine
the exact amount of the loan they are qualified to obtain through its online
pre-qualification and pre-approval services.



     INFORMATION FOR BORROWERS. E-LOAN's website hosts a rich array of
information on the home buying and refinancing processes, including articles
about how to evaluate loan products, maximizing your home buying power, timing a
refinance and a glossary of mortgage terms. Detailed explanations of the overall
process of obtaining a loan is also available.



     REALTOR INFORMATION AND SERVICES. Realtors can use the E-LOAN website to
help their clients calculate the loan amount they can afford, generate a
pre-qualification letter or obtain a pre-approval before selecting a property,
search for rates and educate them on the mortgage process and terms. In
addition, E-LOAN's website offers Realtors a free service allowing them to
generate custom flyers to advertise their listings.



     INTERNATIONAL MORTGAGES. Under E-LOAN's alliance with Stater BV, E-LOAN and
Stater BV will cooperate to support E-LOAN's online mortgage origination
subsidiary in establishing and operating a service that offers residential
mortgage loans through the Internet directly to consumers in the European Union,
other than the United Kingdom. The initial term of the alliance is five years.
E-LOAN expects to begin launching European services in the third quarter of
1999.



     In addition, under a joint venture agreement with Softbank Corp., E-LOAN
holds a minority interest in E-LOAN Japan, a Japanese corporation that will
develop, market and provide an online mortgage marketplace to serve consumers in
Japan and the Republic of Korea. E-LOAN intends to continue to expand into other
key international markets in the future.


MORTGAGE OPERATIONS


     E-LOAN is engaged in the mortgage loan origination business as a
multi-source lender. E-LOAN originates, underwrites, funds and sells mortgage
loans. Originations are funded either through lending partners or through
E-LOAN's own warehouse lines of credit. E-LOAN's loan


                                       37
<PAGE>   42

originations are principally prime credit quality first-lien mortgage loans
secured by single family residences. E-LOAN also offers second mortgages and
home equity lines of credit in many states. All loans are underwritten pursuant
to standards established by E-LOAN and conform to the underwriting standards of
the ultimate purchasers of the loans.


     Principal sources of income are loan origination fees, gains from the sale
of loans, if any, and interest earned on mortgage loans during the period that
they are held pending sale, net of interest paid on borrowed funds. Since
E-LOAN's policy is to sell all loans that it originates, E-LOAN does not perform
loan servicing functions and therefore does not generate ongoing servicing
revenues that are customarily earned by traditional mortgage lenders.



     In 34 states and the District of Columbia, E-LOAN is licensed as a mortgage
broker and/or mortgage banker, or is exempt from licensing requirements, and can
fund all of the loans that it originates. E-LOAN licenses its mortgage loan
origination systems and proprietary marks to NetB@nk to enable NetB@nk to fund
mortgage loans under the E-LOAN brand in eleven of the remaining 16 states, and
has agreements with PHH Mortgage Services Corporation and Prism Mortgage Company
relating to the fulfillment of all aspects of loan transaction processing
following origination in the other five remaining states.



     OBTAINING AN E-LOAN LOAN. The loan origination process begins when the
customer completes a loan application online through the E-LOAN website. Once
the application is submitted, E-LOAN initiates a series of steps to efficiently
underwrite and process the loan while providing a consistent level of customer
service. Within two days of submitting an application, customers receive a
welcome package from E-LOAN in the mail which is designed to further brand the
E-LOAN experience and contains the necessary disclosure documents mandated by
governmental authorities.



     An E-Track account is created at the time a loan application is received
and serves as the customer's primary communication system with E-LOAN throughout
the loan process. Customers are invited to visit their E-Track account
frequently to review key steps in the loan process, receive updated information
regarding their loan product, closing costs, and interest rate lock, and view
the progress of their loan approval.



     Although the E-Track account is available 24 hours a day, seven days a
week, E-LOAN believes that a more personalized touch from a customer service
perspective is necessary to truly brand the E-LOAN experience and build customer
loyalty. Therefore, assigned customer service representatives maintain telephone
contact with borrowers throughout the loan process to communicate major events
and answer questions. Customer service contact begins once the online
application has been received, continues through approval and funding, and is
available until loan monitoring account preferences have been established.



     Loan packages are pre-underwritten upon E-LOAN's receipt of completed
paperwork along with a nominal check to cover the cost of obtaining credit
reports and utilizing automated underwriting systems, if applicable. All
conforming loans are underwritten utilizing an automated system such as Fannie
Mae's Desktop Underwriter (DU). Loans that do not immediately qualify for
automated underwriting are underwritten using standard manual processes.



     As additional loan documentation is received, data provided by the customer
at the time of initial origination is validated. Appraisals, credit reports, and
title and survey documents are ordered and reviewed by the designated
underwriting teams.



     Once the underwriting process is completed, customers are invited to
request interest rate commitments for their selected loan through their E-Track
accounts. E-LOAN then confirms that this request can be obtained from mortgage
loan purchasers or lending sources. Once the requested rate has been confirmed,
customers are notified and provided with all relevant product and execution
conditions.



     Final loan approval is secured once all critical data elements have been
validated and have been confirmed to satisfy the guidelines of the lending
program sought by the borrower. If a


                                       38
<PAGE>   43

borrower's loan does not satisfy lender guidelines, the designated service team
will research additional lenders for the customer. For more complex situations,
customers will be referred to an E-LOAN loan specialist for special assistance.
If a product cannot be secured for the customer, the customer will receive a
denial letter stating the reasons that a loan could not be obtained.


     After loans have been approved and all relevant conditions have been met,
E-LOAN will either prepare or request preparation of loan documents to be signed
by the borrower. The assigned customer service representative will work with the
borrower to obtain the necessary signatures for funding and schedule the closing
of the loan. Once the borrower has signed all documentation, the loan file is
reviewed to identify any missing requirements. The loan is then funded and
recorded as closed.



     A quality control review of E-LOAN sourced and funded loans is performed
prior to forwarding the loan documentation to the final mortgage loan purchaser
or its designated custodian. An accounting audit is also performed to reconcile
settlement information provided by escrow/attorney settlement agents with
E-LOAN's internal information. Loan documentation relating to closed loans is
then shipped to the mortgage loan purchaser or its designated custodian, and
documentation is maintained to satisfy regulatory and company record retention
requirements.



     E-LOAN then establishes ongoing loan monitoring accounts for all closed
loans to ensure that its customers remain in the most suitable loan products
based on their specified personal financial requirements. E-LOAN also solicits
customer feedback regarding the loan process to measure overall E-LOAN customer
loyalty and to utilize in developing future product and service enhancements
that are responsive to customer concerns.



     LOAN PRODUCTION. E-LOAN originates conventional mortgage loans (conforming
and jumbo loans) and home equity lines of credit, a high percentage of which
were refinancings of existing mortgages in 1998. A majority of the conventional
loans originated are conforming loans, which are eligible for sale in programs
sponsored by Fannie Mae or Freddie Mac. While E-LOAN does not currently sell
directly to Fannie Mae or Freddie Mac, the conforming loans E-LOAN originates
are ultimately eligible for sale in the secondary markets supported by these
organizations.



     The remainder of the conventional loans are non-conforming loans. These
include loans with an original balance in excess of $240,000 that otherwise meet
all other Fannie Mae or Freddie Mac guidelines (jumbo loans), and other loans
that do not meet those guidelines. As part of E-LOAN's multi-source lending
activities, E-LOAN originates loans with original balances of up to $2 million.



     E-LOAN offers the following categories of loan products:



     - long term adjustable rate mortgages;



     - intermediate term adjustable rate mortgages;



     - fixed rate mortgages;


     - balloons;

     - home equity lines of credit; and

     - no cost loans.

                                       39
<PAGE>   44

     Based on the best information available to E-LOAN, the following table sets
forth the number and dollar amount of the various types of loan products sold to
customers for the periods indicated.

                    TOTAL NUMBER OF CLOSED LOANS BY PRODUCT
<TABLE>
<CAPTION>
                                                                       1998
                       -----------------------------------------------------------------------------------------------------
                                    Q1                             Q2                             Q3                   Q4
                       ----------------------------   ----------------------------   ----------------------------   --------
                                    LOAN      % OF                 LOAN      % OF                 LOAN      % OF
                                   DOLLAR    TOTAL                DOLLAR    TOTAL                DOLLAR    TOTAL
                        NUMBER     VOLUME    DOLLAR    NUMBER     VOLUME    DOLLAR    NUMBER     VOLUME    DOLLAR    NUMBER
    TYPE OF LOAN       OF LOANS   ($ MILL)   VOLUME   OF LOANS   ($ MILL)   VOLUME   OF LOANS   ($ MILL)   VOLUME   OF LOANS
    ------------       --------   --------   ------   --------   --------   ------   --------   --------   ------   --------
<S>                    <C>        <C>        <C>      <C>        <C>        <C>      <C>        <C>        <C>      <C>
30 Year Fixed........     233      $ 53.4      51%       447      $ 93.7      54%       704      $153.0      70%     1,033
15 Year Fixed........     143      $ 29.1      28%       201      $ 41.8      24%       238      $ 47.1      21%       391
30 Year ARM..........      71      $ 22.4      21%       126      $ 36.2      21%        56      $ 17.1       8%       199
Other Products.......       0      $  0.0       0%         5      $  0.4       0%         6      $  1.9       1%        12
                        -----      ------     ---      -----      ------     ---      -----      ------     ---      -----
   Total.............     447      $104.9     100%       779      $172.1     100%     1,004      $219.1     100%     1,635

<CAPTION>
                             1998                      1999
                       -----------------   ----------------------------
                              Q4                        Q1
                       -----------------   ----------------------------
                         LOAN      % OF                 LOAN      % OF
                        DOLLAR    TOTAL                DOLLAR    TOTAL
                        VOLUME    DOLLAR    NUMBER     VOLUME    DOLLAR
    TYPE OF LOAN       ($ MILL)   VOLUME   OF LOANS   ($ MILL)   VOLUME
    ------------       --------   ------   --------   --------   ------
<S>                    <C>        <C>      <C>        <C>        <C>
30 Year Fixed........   $188.3      56%     1,280      $254.5      54%
15 Year Fixed........   $ 77.9      23%       806      $130.7      28%
30 Year ARM..........   $ 69.9      21%       254      $ 78.3      17%
Other Products.......   $  2.9       1%        31      $  6.3       1%
                        ------     ---      -----      ------     ---
   Total.............   $339.0     100%     2,371      $469.8     100%
</TABLE>

     AUTOMATED UNDERWRITING. Automated underwriting (AU) is expected to
contribute significantly to E-LOAN's goal of increasing the efficiency of
multi-source lending by providing customers faster, more cost-efficient credit
reviews and decisions. AU may further offer efficiency enhancements through
reduced costs in property appraisals. In addition, E-LOAN believes customers
will also value the less onerous and time-consuming nature of AU relative to
more traditional underwriting processes. E-LOAN will continue to seek to enhance
its AU capabilities and incorporate as many techniques and technologies as are
warranted by its business needs and the needs of its major business partners.

     E-LOAN has recently been approved by Fannie Mae to be an originator under
Fannie Mae's Desktop Originator and Desktop Underwriter system (DU). DU is
expected to help automate the lending process for all conforming loans and loans
aimed at low-and moderate-income borrowers. The goal of DU is to reduce the time
and expense of property appraisals. The DU system is expected to enable E-LOAN
to implement a comprehensive, integrated point-of-sale solution providing
expedited loan decisions. E-LOAN is the largest exclusive online originator
approved to use the DU system. E-LOAN also expects to implement additional AU
systems, including Freddie Mac's Loan Prospector and GECMC's Good Decisions.

     LOAN UNDERWRITING. E-LOAN's guidelines for underwriting conventional
conforming loans comply with the underwriting criteria employed by Fannie Mae
and/or Freddie Mac. E-LOAN's underwriting guidelines and property standards for
all other conventional non-conforming loans are based on the underwriting
standards employed by the secondary mortgage loan purchasers.

     E-LOAN considers the following general underwriting criteria in determining
whether to approve a loan application:

     - employment and income;

     - credit history;

     - property value and characteristics;

     - borrower characteristics; and

     - available assets.

                                       40
<PAGE>   45

     GEOGRAPHIC DISTRIBUTION. Based on the best information available to E-LOAN,
the following table sets forth the geographic distribution by state of E-LOAN's
loan originations for the periods indicated.

              DISTRIBUTION BY STATE OF E-LOAN'S LOAN ORIGINATIONS

<TABLE>
<CAPTION>
                                    1998                       FIRST QUARTER 1999
                       -------------------------------   -------------------------------
                        NUMBER OF     PERCENT OF TOTAL    NUMBER OF     PERCENT OF TOTAL
        STATE          CLOSED LOANS     CLOSED LOANS     CLOSED LOANS     CLOSED LOANS
        -----          ------------   ----------------   ------------   ----------------
<S>                    <C>            <C>                <C>            <C>
California...........     3,223              83%            1,636              69%
Washington...........       218               6%              140               6%
Texas................        86               3%               94               4%
Colorado.............        64               2%               61               3%
All Others...........       274               6%              440              18%
                          -----             ---             -----             ---
          Total......     3,865             100%            2,371             100%
</TABLE>

     We are more likely to originate a significant amount of our loans in
California for the foreseeable future because we are located there, we have
advertised more heavily in California than in other states to date, and we
believe that California consumers are more likely to be comfortable with using
the Internet to purchase mortgages. E-LOAN has initiated advertising campaigns
in other major markets outside California in an effort to generate more loan
applications from other states. Based on the best information available to
E-LOAN, the following table sets forth the distribution by county of E-LOAN's
California loan originations for the periods indicated.

        DISTRIBUTION BY COUNTY OF E-LOAN'S CALIFORNIA LOAN ORIGINATIONS

<TABLE>
<CAPTION>
                                    1998                       FIRST QUARTER 1999
                       -------------------------------   -------------------------------
                        NUMBER OF     PERCENT OF TOTAL    NUMBER OF     PERCENT OF TOTAL
       COUNTY          CLOSED LOANS     CLOSED LOANS     CLOSED LOANS     CLOSED LOANS
       ------          ------------   ----------------   ------------   ----------------
<S>                    <C>            <C>                <C>            <C>
Santa Clara..........       783              24%              311              19%
Alameda..............       481              15%              183              11%
San Mateo............       301               9%              122               7%
Contra Costa.........       313              10%              178              11%
Los Angeles..........       270               9%              216              13%
Orange...............       208               6%              130               8%
San Francisco........       122               4%               58               4%
Other................       745              23%              438              27%
                          -----             ---             -----             ---
          Total......     3,223             100%            1,636             100%
</TABLE>

     SALE OF LOANS. E-LOAN sells all loans that it originates, on a loan by loan
basis, along with the loan servicing rights. Substantially all prime credit
quality first mortgage loans sold by E-LOAN are sold without recourse.
Generally, E-LOAN sells its non-conforming conventional loan production to large
buyers in the secondary market.

     E-LOAN minimizes its credit exposure on loans funded through its warehouse
credit facilities by currently selling a majority of these loans within 14 days
of funding. To facilitate the rapid sale of each loan, E-LOAN enters into a
best-efforts commitment with the mortgage loan purchaser at the same time the
customer's interest rate commitment is obtained. E-LOAN sells its loans on a
best efforts basis, as opposed to a mandatory basis, in order to avoid the
potential financial penalties associated with failing to deliver a loan to the
mortgage loan purchaser under a mandatory commitment. With the interest rate
risk limited by the commitments to sell originated loans, E-LOAN does not enter
into any hedging transactions in order to offset the risk that a change in
interest rates will result in a decrease in the value of E-LOAN's current
mortgage loan inventory or its commitments to purchase or originate mortgage
loans.

                                       42
<PAGE>   46

     FINANCING OF INTERNAL MORTGAGE FUNDING OPERATIONS. E-LOAN's principal
financing requirements are associated with its internal loan funding activities.
To satisfy these requirements, E-LOAN currently draws on warehouse credit
facilities it has established with Bank United and GE Capital. E-LOAN has also
secured an additional credit facility with Greenwich Capital. E-LOAN had
committed and uncommitted funds available through its warehouse credit
facilities and its agreement with Greenwich Capital aggregating approximately
$165 million as of May 31, 1999. E-LOAN also has an agreement with Greenwich
Capital to add an additional $100 million in uncommitted funds to finance
E-LOAN's mortgage loan inventory effective upon the closing of this offering. As
of May 31, 1999, the funding sources available to E-LOAN under each of its
current warehouse credit facilities and its agreement with Greenwich Capital are
as follows:

<TABLE>
<S>                                      <C>
Greenwich Capital......................  $100 million
Bank United............................  $ 40 million
GE Capital.............................  $ 25 million
</TABLE>

     If E-LOAN continues to sell a majority of its internally funded mortgage
loans within 14 days, the existing warehouse credit facilities together with an
increase in the Greenwich Capital commitment would enable E-LOAN to internally
fund approximately $330 million in mortgage loans during each 30-day period,
increasing to approximately $530 million upon the closing of this offering.

     Our agreements with GE Capital and Bank United require us to comply with
various operating and financial covenants. These covenants restrict our ability
to:

     - sell any of our material assets or merge or consolidate with another
       company;

     - issue additional shares of common stock without their consent;

     - pay dividends on our outstanding shares of common stock; and

     - amend our Certificate of Incorporation or Bylaws.

     These covenants also require us to:

     - maintain a minimum tangible net worth;

     - limit the amount of debt we incur relative to our net worth; and

     - ensure that our current assets are equal to or greater than our current
       liabilities.

     E-LOAN intends to increase and diversify further its short-term funding
capabilities and continue to identify and pursue alternative and supplementary
methods to finance its operations through the public and private capital
markets.

CUSTOMER SERVICE

     E-LOAN devotes significant resources to providing personalized, timely
customer service and support to minimize the potential uncertainty, anxiety and
inconvenience of the loan process. By combining high-tech communications with
highly personalized attention, E-LOAN believes it provides a level of customer
service superior to that experienced in the traditional loan application
process.

     To help prospective customers understand the mortgage process, E-LOAN's
website provides a rich assortment of information on how to choose the most
suitable mortgage, descriptions of the various types of loan products, articles
about buying and refinancing a home, a glossary of mortgage terms, and answers
to frequently asked questions. Prospective customers may call E-LOAN toll-free
with general questions or click on one of the many "contact us" links throughout
its website to send questions via e-mail. Call center staff respond to both
phone calls and e-mail requests within 24 hours, and are available from 5 AM to
8 PM California

                                       43
<PAGE>   47

time Monday through Saturday. To respond promptly to questions from Realtors,
E-LOAN also maintains a toll-free Realtor hotline staffed during the same hours.

     Once a loan application is submitted online, E-LOAN assigns the customer a
personal customer service representative (CSR). The CSR becomes the customer's
primary point of contact with E-LOAN, ensuring prompt and personalized
attention. The CSR maintains regular e-mail and phone communication with the
borrower to answer questions, address any problems and generally facilitate
closing the loan by coordinating with E-LOAN's underwriting and processing
staff. After closing, E-LOAN asks each borrower to rate the level of customer
service received from the CSR, as well as from appraisal and settlement
personnel. The survey results are factored into the CSR's compensation, ensuring
a strong commitment to continually improving the quality of customer service.

     Every online application also triggers the opening of a password-protected
E-Track account. Using E-Track, customers can track the process of their loan
applications online at any time. Each event that occurs throughout the various
stages of the loan process, for instance the receipt of appraisal details or a
lender's request for documentation from the borrower, generates an automated
e-mail alert to the borrower. The information is also logged in E-Track so the
borrower has a continuously updated record of all loan application developments.
With a customer's permission, Realtors may also access the E-Track account to
keep abreast of the progress of a loan.

TECHNOLOGY

     E-LOAN's technology systems use a combination of its own proprietary
technologies and commercially available, licensed technologies from industry
leading providers, including Sun Microsystems, Cisco Systems and Oracle.
E-LOAN's systems were designed around industry standard architecture to reduce
downtime in the event of outages or catastrophic occurrences. Our systems
provide availability 24 hours a day, seven days a week, and have capacity for a
tenfold increase in activity before requiring additional hardware or support.
The system architecture and user interface were designed by E-LOAN's co-founders
and engineering staff.

     USER INTERFACE. The E-LOAN website is designed for fast downloads and
compatibility with the most basic browsers. Pages are built with minimal
graphics and do not require client-side plug-ins or Java to view.

     RATE SEARCHES AND COMPARISONS. Many of the mortgage services that E-LOAN
offers its customers are facilitated through its proprietary database. The
database features a rate-loading mechanism that enables electronic data feeds
from E-LOAN's lenders to be received and added to the database multiple times
per day. This mechanism provides prospective borrowers searching E-LOAN's
database with timely access to rates as the market changes. The database
currently contains rates and other details for about 50,000 products on an
average day and is designed to support a virtually limitless number of products
or search parameters. The database supports the dynamic comparison of loans
according to rate, term and points, and in the case of adjustable-rate
mortgages, margin, index and life cap. The rate-loading and search capabilities
of our database are the focus of significant development resources and we plan
to continuously improve and enhance these features.

     LOAN APPLICATION AND TRACKING. When a customer applies for a loan online,
the application data is stored in a file server. As additional information,
including credit reports, appraisal details and financial documentation, is
obtained throughout the loan process and added to the borrower's file, e-mails
are automatically sent to the borrower and Realtor to inform them of the current
status of the loan application. At the same time, the borrower's E-Track account
is updated. Each day, E-LOAN sends thousands of automated e-mails and updates
hundreds of E-Track accounts.

                                       44
<PAGE>   48

     SECURITY. In order to safeguard borrowers' sensitive financial data,
E-LOAN's systems provide the most secure online transaction capability
available. Customer information sent via the website is encrypted using a Secure
Socket Layer. The server is protected with industry-leading firewall software.
The website itself is locked down, with only two people authorized to change the
content on the production server. E-Track is password-protected so that only the
borrower may access the account. For an extra measure of protection, none of the
borrower's credit or financial information is contained in the E-Track account.
The file server containing borrower data is accessible only to authorized users
within E-LOAN. There is no external access to this internal server via modem,
even by E-LOAN employees.

     PARTNER TEMPLATES. E-LOAN's ability to develop and support mortgage loan
centers in partnership with websites, including Yahoo!, E*Trade and DLJdirect is
critical to driving applications and expanding the E-LOAN brand. E-LOAN has
developed a unique template system that allows for the rapid development and
deployment of mortgage loan centers within several hours of signing a
distribution agreement. In addition, our partners' websites contain customized
data and retain unique appearances. E-LOAN currently maintains over 40 mortgage
loan centers on distribution partners' websites.

     SERVER HOSTING AND BACK-UP. E-LOAN's website system hardware is hosted at
the Exodus facilities in Santa Clara, California and Jersey City, New Jersey,
providing redundant communication lines and emergency power back-up. We have
implemented load balancing systems and our own redundant servers to provide for
fault tolerance. Scheduled maintenance takes place without taking the website
offline.

MARKETING

     E-LOAN's marketing strategy is to attract loan applicants to its website by
promoting the E-LOAN brand as a byword for choice, selection, competitive
pricing and service in the mortgage industry. E-LOAN relies on a variety of
methods to promote its brand. By providing superior customer service, E-LOAN
promotes online referrals from satisfied borrowers. Strategic partnerships with
online financial websites, including Yahoo!, E*Trade, DLJdirect, Telebank and
CBS MarketWatch drive applications through mortgage loan centers on those
websites. Offline marketing campaigns featuring radio, TV, print and outdoor
advertising in key markets and nationwide target the demographic segments with
the highest propensity to utilize an online mortgage provider. E-LOAN also
engages in a number of marketing activities at trade shows and other events in
the real estate industry in order to encourage Realtors to refer homebuyers
directly to our website.

     E-LOAN entered into an agreement with Yahoo!, Inc. in September 1998, which
was extended in March 1999 to run through February 2001. Pursuant to this
agreement, E-LOAN is the exclusive provider of mortgage related information on
the "Yahoo! Loan Center" website.

REGULATION OF MORTGAGE BROKERS AND LENDERS

     The residential mortgage financing industry is highly regulated. E-LOAN's
business must comply with extensive and complex rules and regulations of, and
licensing and examination by, various federal, state and local government
authorities. These rules impose obligations and restrictions on E-LOAN's
residential loan brokering and lending activities. In particular, these rules
limit the broker fees, interest rates, finance charges and other fees E-LOAN may
assess, require extensive disclosure to E-LOAN's customers, prohibit
discrimination and impose multiple qualification and licensing obligations on
E-LOAN. Failure to comply with these requirements may result in, among other
things, revocation of required licenses or registrations, loss of approved
status, voiding of the loan contracts or security interests, indemnification
liability or the obligation to repurchase mortgage loans sold to mortgage loan
purchasers, rescission of mortgage loans,

                                       45
<PAGE>   49

class action lawsuits, administrative enforcement actions and civil and criminal
liability. E-LOAN believes it is in substantial compliance with these rules and
regulations.

     As a mortgage company doing business exclusively through the Internet,
E-LOAN faces an additional level of regulatory risk given the fact that the
statutes and regulations governing mortgage transactions have not been
substantially revised or updated to fully accommodate electronic commerce. Most
of the federal and state laws, rules and regulations governing mortgage loans
contemplate or assume paper-based transactions and do not currently address the
delivery of required disclosures and other documents through electronic
communications. Until the applicable laws, rules and regulations are revised to
clarify their applicability to transactions through e-commerce, any company
offering mortgage loans through the Internet or other means of e-commerce will
face uncertainty as to compliance. In addition, there is no assurance that
revisions to the laws, rules and regulations will be adopted and, if adopted,
will be timely or adequate to eliminate this uncertainty. Nonetheless, E-LOAN
believes that it has taken prudent steps to mitigate these risks in offering its
mortgage loan services through the Internet.

     At the state level, E-LOAN must comply with licensing and regulation in
most of the states where it acts as a mortgage broker or lender. In addition,
any person who acquires 10% or more of E-LOAN's stock may be required to comply
with state licensing regulations requiring the person to periodically file
certain financial information and other personal and business information. If
any person holding 10% or more of E-LOAN's stock refuses or fails to comply with
these filing requirements, E-LOAN's existing licensing arrangements could be
jeopardized. The loss of required licenses could have a material adverse effect
on E-LOAN's results of operations and financial condition.

     State laws limit the broker fees, interest rates, finance charges and other
fees E-LOAN may assess, including late charges, insufficient funds charges for
returned checks and prepayment penalties, and may require payment of interest on
escrow balances. State laws also require extensive disclosure to E-LOAN's
customers concerning fees and charges, brokerage agreements, lock-in agreements
and commitments, alternative mortgage transactions, escrows for taxes and
insurance, choosing settlement attorneys and insurance agents and private
mortgage insurance, among others. These laws regulate both the content and
timing of disclosures. In addition, many state laws regulate advertising claims
in connection with the solicitation of mortgage loan applications. State and
federal laws also prohibit unfair and deceptive trade practices in the mortgage
finance business. E-LOAN believes that it has obtained all licenses material to
our business in the jurisdictions where it conducts business, and is operating
substantially in compliance with the laws of these jurisdictions.

     At the federal level, E-LOAN's mortgage brokering and lending activities
are regulated under a variety of laws, including, but not limited to, the Truth
in Lending Act and Regulation Z (TILA), the Equal Credit Opportunity Act and
Regulation B (ECOA), the Fair Housing Act, the Fair Credit Reporting Act (FCRA),
the Real Estate Settlement Procedures Act and Regulation X (RESPA) and the Home
Mortgage Disclosure Act of 1975 and Regulation C (HMDA). These statutes
generally require detailed disclosure of information concerning mortgage loans,
and they regulate the manner in which loans are made, including advertising,
disclosure of consumer information, servicing (and transfer of servicing) of
mortgage loans, payments for settlement services and reporting of consumer data.
These laws regulate both the content and timing of disclosures. E-LOAN believes
that it is operating substantially in compliance with the laws applicable to
E-LOAN's business.

     Under TILA, lenders are required to provide consumers with uniform,
understandable information concerning certain terms and conditions of their loan
and credit transactions. Disclosures include providing the annual percentage
rate, monthly payment amount and total amount financed, plus certain disclosures
concerning alternative mortgage transactions. In

                                       46
<PAGE>   50

addition, TILA gives borrowers, among other things, the right to rescind loan
transactions if the lender fails to provide the requisite disclosure.

     Under ECOA, creditors are prohibited from discriminating against applicants
on the basis of race, color, sex, age, religion, national origin or marital
status. The regulations under ECOA also restrict creditors from requesting
certain types of information from loan applicants. FCRA requires lenders to
supply applicants with certain information (called an "adverse action notice")
when the lender denies its applicants credit. The Fair Housing Act prohibits
discrimination in mortgage lending on the basis of race, color, religion, sex,
handicap, familial status or national origin. Finally, E-LOAN, when acting as a
mortgage lender, must also file annual reports with HUD pursuant to HMDA, which
requires the collection and reporting of statistical data concerning loan
transactions.

     RESPA requires certain disclosures, including a good faith estimate of
closing costs and fees, as well as mortgage servicing transfer practices. RESPA
also prohibits the payment or receipt of kickbacks or referral fees, fee shares
or splits, or unearned fees in connection with the provision of real estate
settlement services. It is a common practice for online mortgage companies to
enter into advertising, marketing and distribution arrangements with other
Internet companies and websites whereby the mortgage companies pay the Internet
companies fees for advertising, marketing and distribution services and other
goods and facilities based on the number of click-throughs, completed loan
applications or closed loans derived from these arrangements. The applicability
of RESPA's referral fee prohibitions to the compensation provisions of these
arrangements is unclear and the Department of Housing and Urban Development has
provided no guidance to date on the subject. Although E-LOAN believes that it
has structured its relationships with Internet advertisers to ensure compliance
with RESPA, some level of risk is inherent absent amendments to the law or
regulations, or clarification from regulators.

     The laws, rules and regulations applicable to E-LOAN may undergo periodic
modification and change. There are currently proposed various laws, rules and
regulations which, if adopted, could impact E-LOAN. There can be no assurance
that these proposed laws, rules and regulations, or other applicable laws, rules
or regulations, will not be adopted in the future which could make compliance
much more difficult or expensive, restrict E-LOAN's ability to originate,
broker, purchase or sell loans, further limit or restrict the amount of
commissions, interest and other charges earned on loans originated, brokered,
purchased or sold by E-LOAN, or otherwise adversely affect the business or
prospects of E-LOAN.

COMPETITION

     The market for the origination of mortgage loans is rapidly evolving, both
online and through traditional channels, and competition for borrowers is
intense and is expected to increase significantly in the future. E-LOAN faces
competition from companies directly competing by offering mortgage loans or
other home buying services over the Internet. Principal among these competitors
are Microsoft HomeAdvisor, Intuit QuickenMortgage, iOwn.com, Keystroke and
Mortgage.com. Traditional lenders, including Countrywide, Norwest, Wells Fargo
and Bank America, also provide access to their mortgage loan offerings over the
Internet. Increased competition, particularly online competition, could result
in price reductions, reduced margins or loss of market share, any of which could
adversely affect our business. Further, there can be no assurance that E-LOAN's
competitors and potential competitors will not develop services and products
that are equal or superior to those of E-LOAN or that achieve greater market
acceptance than its products and services.

     E-LOAN believes that the primary competitive factors in creating a
financial services resource on the Internet are functionality, brand
recognition, customer loyalty, ease-of-use, quality of service, reliability and
critical mass. Competition is likely to increase significantly as

                                       47
<PAGE>   51

new companies enter the market and current competitors expand their services.
Many of these potential competitors are likely to enjoy substantial competitive
advantages, including:

     - longer operating histories;

     - greater name recognition;

     - larger, established customer bases; and

     - substantially greater financial, marketing, technical and other
       resources.

LEGAL PROCEEDINGS

     E-LOAN is not currently a party to any material legal proceedings. E-LOAN
may become a party to various legal proceedings arising in the ordinary course
of its business.

INTELLECTUAL PROPERTY

     Trademarks and other proprietary rights are important to our success and
our competitive position. E-LOAN currently has a number of trademarks and
copyrights; however, it does not hold any patents. Although E-LOAN seeks to
protect its trademarks and other proprietary rights through a variety of means,
E-LOAN may not have taken adequate steps to protect these rights. E-LOAN may
also license content from third parties in the future and it is possible that it
could be subjected to infringement actions based upon the content licensed from
these third parties. Any claims brought against E-LOAN, regardless of their
merit, could result in costly litigation and the diversion of its financial
resources and technical and management personnel. Further, if any claims are
proved valid, through litigation or otherwise, E-LOAN may be required to change
its trademarks and pay financial damages, which could adversely affect its
business.

     E-LOAN typically enters into confidentiality or license agreements with its
employees, consultants and corporate partners, and generally controls access to
and distribution of its technologies, documentation and other proprietary
information. Despite its efforts to protect its proprietary rights from
unauthorized use or disclosure, parties may attempt to disclose, obtain or use
E-LOAN's rights. The steps E-LOAN has taken may not prevent misappropriation of
its proprietary rights, particularly in foreign countries where laws or law
enforcement practices may not protect E-LOAN's proprietary rights as fully as in
the United States.


     E-LOAN expects it may be involved in legal proceedings and claims in the
ordinary course of its business, including claims of alleged infringement of the
trademarks and other intellectual property rights of third parties by E-LOAN and
its licensees. Any of these claims, even if without merit, could result in the
expenditure of significant financial and managerial resources. If any of these
claims are successful, E-LOAN may be required to change its trademarks, alter
its content and pay financial damages, which could adversely affect its
business.



     In particular, E-LOAN has received several communications over the last
year from EduCap, Inc, a provider of educational loan services and financing for
computer equipment for use in education. In the latest of these communications,
a letter received in June 1999, EduCap contends that E-LOAN's use of the name
and trademark "E-LOAN" is wrongful, likely to cause consumer confusion and
infringes EduCap's trademark "THE E-LOAN." EduCap has demanded that E-LOAN cease
and desist all use of the trademark and has indicated that it will seek damages
if the parties are unable to reach an amicable solution. E-LOAN denies EduCap's
allegations and if a lawsuit is initiated, intends to defend itself vigorously.
However, litigation involves inherent uncertainties and if a lawsuit is filed
there can be no assurance that E-LOAN will prevail or that an adverse judgment
will not materially affect E-LOAN's business.


EMPLOYEES

     As of March 31, 1999, E-LOAN employed 237 full-time employees, of whom 185
were in operations, 26 were in administration, 12 were in marketing and business
development and 14

                                       48
<PAGE>   52

were in engineering. As E-LOAN continues to grow and introduce more products, it
expects to hire more personnel, particularly in the areas of mortgage operations
and marketing. None of E-LOAN's current employees is represented by a labor
union or is the subject of a collective bargaining agreement. E-LOAN believes
that relations with its employees are good.

FACILITIES

     E-LOAN is headquartered in Dublin, California, where it leases
approximately 68,000 square feet of space primarily in a single building. E-LOAN
also occupies approximately 2,000 square feet of space in Palo Alto, California.
The lease for E-LOAN's office space in Dublin expires in October 2003, and the
lease for E-LOAN's office space in Palo Alto is month to month. E-LOAN currently
anticipates that it will require additional space as more personnel are hired.

THE E-LOAN FOUNDATION

     The E-LOAN Foundation was established to support charitable causes in the
San Francisco Bay Area. E-LOAN's reasons for establishing the foundation were to
improve conditions in the local community and build goodwill for E-LOAN.

     The E-LOAN Foundation will primarily focus on alleviating homelessness and
improving the quality of life and education for disadvantaged members of the
community. Supported programs will be selected by a grant committee comprised of
E-LOAN employees, with final authorization to be given by our executive officers
Chris Larsen, Janina Pawlowski and Frank Siskowski. The Community Foundation
Silicon Valley will conduct all administration and management of the grants.
Other than some involvement in the nature of the charitable contributions, no
officers or directors of E-LOAN are affiliated with the Community Foundation
Silicon Valley or the E-LOAN Foundation. There are no agreements in place
between E-LOAN and the Community Foundation Silicon Valley with respect to
voting of the shares being donated to the E-LOAN Foundation.

                                       49
<PAGE>   53

                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

     The following table sets forth certain information regarding the directors
and executive officers of E-LOAN as of March 31, 1999:

<TABLE>
<CAPTION>
                  NAME                      AGE                    POSITION
                  ----                      ---                    --------
<S>                                         <C>    <C>
Chris Larsen............................    38     Chief Executive Officer and Director
Janina Pawlowski........................    38     President and Director
Frank Siskowski.........................    51     Chief Financial Officer
Harold "Pete" Bonnikson.................    44     Senior Vice President, Operations
William Crane...........................    37     Vice President, Engineering
Doug Galen..............................    37     Vice President, Business Development &
                                                   Sales
Janet Hammond...........................    41     Vice President, Underwriting
Joseph Kennedy..........................    39     Senior Vice President, Marketing and
                                                   Business Development
Steve Majerus...........................    35     Vice President, Secondary Markets
Sara Myers Bisler.......................    39     Vice President, Operations
Sharon Ruwart...........................    36     Vice President, Marketing
Ira M. Ehrenpreis(1)(2).................    30     Director
Robert C. Kagle(1)(2)...................    43     Director
Tim Koogle(1)(2)........................    47     Director
Wade Randlett...........................    34     Director
</TABLE>

- ---------------
(1) Member of Audit Committee

(2) Member of Compensation Committee

     CHRIS LARSEN co-founded E-LOAN in August 1996 and has served as its Chief
Executive Officer since June 1998. From August 1996 to June 1998, Mr. Larsen
served as the President of E-LOAN. Mr. Larsen has been a Director of E-LOAN
since its incorporation in August 1996. From October 1992 to August 1996, Mr.
Larsen was the President of the Palo Alto Funding Group, the mortgage brokerage
he co-founded in 1992 and E-LOAN's predecessor company. Mr. Larsen holds an
M.B.A. degree from Stanford University and a B.S. degree from San Francisco
State University.

     JANINA PAWLOWSKI co-founded E-LOAN in August 1996 and has served as its
President since June 1998. From August 1996 to June 1998, Ms. Pawlowski served
as the Chief Executive Officer of E-LOAN. Ms. Pawlowski has been a Director of
E-LOAN since its incorporation in August 1996. From October 1992 to August 1996,
Ms. Pawlowski was the Chief Executive Officer of the Palo Alto Funding Group,
the mortgage brokerage she co-founded in 1992 and E-LOAN's predecessor company.
Ms. Pawlowski holds an M.B.A. degree from the University of Rochester and a B.S.
degree from Cornell University.

     FRANK SISKOWSKI has served as the Chief Financial Officer of E-LOAN since
October 1998. Prior to joining E-LOAN, Mr. Siskowski was the Senior Vice
President and Chief Financial Officer of The Indus Group, Inc. from September
1996 to August 1998. From July 1991 to September 1996, Mr. Siskowski served as
Senior Vice President and Controller of VISA International. From January 1985 to
July 1991, Mr. Siskowski served as the Vice President and Chief Financial
Officer of the MCI Pacific Division of MCI Communications Corporation. Mr.
Siskowski holds an M.B.A. degree from Fordham University and a B.A. degree from
Manhattan College.

     HAROLD "PETE" BONNIKSON has served as the Senior Vice President of
Operations of E-LOAN since January 1999. Prior to joining E-LOAN, Mr. Bonnikson
was with North American Mortgage

                                       50
<PAGE>   54

and its predecessor companies since 1981. Mr. Bonnikson was the Executive Vice
President of North American Mortgage from 1993 to 1999. Mr. Bonnikson holds a
B.S. degree from California State University at Sacramento.

     WILLIAM CRANE has served as the Vice President of Engineering of E-LOAN
since April 1998. Prior to joining E-LOAN, Mr. Crane was the Vice President of
Engineering of FrontOffice Technologies from January 1996 to April 1998. From
November 1992 to January 1996, Mr. Crane was the Vice President of Engineering
of Network Computing Devices. Mr. Crane holds a B.S. degree from Texas A&M
University.

     DOUG GALEN has served as the Vice President of Business Development and
Sales of E-LOAN since September 1997. Prior to joining E-LOAN, Mr. Galen was the
Vice President of Business Development of Owners.com from August 1996 to August
1997. From January 1996 to August 1996, Mr. Galen was the Vice President of
Limar Realty. From June 1988 to January 1996, Mr. Galen was the Vice President
of The Shilder Group. Mr. Galen holds an M.B.A. degree and a B.A. degree from
the University of California, Berkeley.

     JANET HAMMOND has served as the Vice President of Underwriting of E-LOAN
since March 1999. From June 1998 to March 1999, Ms. Hammond served as the
Director of Operations of E-LOAN. From December 1997 to June 1998, Ms. Hammond
served as a manager of Customer Service and then as the Director of Customer
Service of E-LOAN. Prior to joining E-LOAN, from May 1997 to December 1997, Ms.
Hammond was a project manager with PMI Mortgage Insurance, Inc. From September
1990 to May 1997, Ms. Hammond was a Loan Manager for Rockwell Federal Credit
Union. Ms. Hammond attended California State University, Fresno.

     JOSEPH KENNEDY has served as the Senior Vice President of Marketing and
Business Development of E-LOAN since February 1999. Mr. Kennedy was the Vice
President of Sales, Service and Marketing of Saturn Corporation from October
1995 to February 1999. From December 1993 to September 1995, Mr. Kennedy was the
General Director of Marketing and Product Planning for the Cadillac Motor Car
Division of General Motors Corporation. From September 1992 to December 1993,
Mr. Kennedy was the Director of Product Portfolio Planning for the North
American Operations of General Motors Corporation. Mr. Kennedy holds an M.B.A.
degree from Harvard Business School and a B.S. degree from Princeton University.

     STEVE MAJERUS has served as the Vice President of Secondary Markets of
E-LOAN since January 1999. From April 1998 to January 1999, Mr. Majerus served
as the Director of Mortgage Banking of E-LOAN. Prior to joining E-LOAN, Mr.
Majerus was the Director of Mortgage Lending for of CMG Mortgage from January
1996 to March 1998. From February 1993 to November 1995, Mr. Majerus was the
President of Trans Capital Mortgage, a company which he co-founded.

     SARA MYERS BISLER has served as the Vice President of Operations of E-LOAN
since May 1999. From November 1993 to May 1999, Ms. Bisler held various
positions with North American Mortgage Company, most recently as Senior Vice
President of Inventory Management. Ms. Bisler holds a B.A. degree from
California State University, Sacramento.

     SHARON RUWART has served as the Vice President of Marketing of E-LOAN since
December 1998. From April 1998 to December 1998, Ms. Ruwart served as Director
of Marketing of E-LOAN. Prior to joining E-LOAN, Ms. Ruwart held a variety of
positions at the San Jose Mercury News, a division of Knight-Ridder, Inc.,
including Brand Group Manager and Recruitment Advertising Manager from January
1995 to April 1998. Ms. Ruwart holds an M.B.A. degree from Stanford University
and a B.A. degree from Yale University.

     IRA M. EHRENPREIS has served as a Director of E-LOAN since January 1998.
Since 1996 Mr. Ehrenpreis has been a General Partner of TPW Management V, L.P.
the General Partner of Technology Partners Fund V, L.P. and Managing Director of
TP Management VI, L.L.C., the General Partner of Technology Partners Fund VI,
L.P. Mr. Ehrenpreis holds J.D. and M.B.A.

                                       51
<PAGE>   55

degrees from Stanford University and a B.A. degree from the University of
California, Los Angeles.

     ROBERT C. KAGLE has served as a Director of E-LOAN since January 1998. Mr.
Kagle has been a member of Benchmark Capital Management Co., L.L.C., since its
founding in May 1995. Mr. Kagle also has been a General Partner of Technology
Venture Investors since January 1984. Mr. Kagle is also a director of eBay Inc.,
a leading online trading community. Mr. Kagle holds a B.S. degree from the
General Motors Institute (renamed Kettering University in January 1998) and an
M.B.A. degree from Stanford University.

     TIM KOOGLE has served as a Director of E-LOAN since September 1998. Mr.
Koogle has been the Chief Executive Officer of Yahoo!, Inc. and a member of
Yahoo!'s Board of Directors since August 1995. He has also been Yahoo!'s
Chairman since January 1999 and was its President from August 1995 until January
1999. Prior to joining Yahoo!, Mr. Koogle was President of Intermec Corporation,
a manufacturer of data collection and data communication products, from 1992 to
1995. During that time, he also served as a corporate Vice President of
Intermec's parent company, Western Atlas. Mr. Koogle holds a B.S. degree from
the University of Virginia and an M.S. degree from Stanford University.

     WADE RANDLETT has served as a Director of E-LOAN since June 1997. Mr.
Randlett has been the Political Director of TechNet since February 1997. From
November 1992 until February 1997, Mr. Randlett was self-employed as a Policy
Consultant. Mr. Randlett holds a B.S. degree from Princeton University.

BOARD COMPOSITION


     E-LOAN currently has authorized six directors. E-LOAN's Restated
Certificate of Incorporation will provide that, effective upon the closing of
this offering, the terms of office of the members of the Board of Directors will
be divided into three classes: Class I, whose term will expire at the annual
meeting of stockholders to be held in 2000, Class II, whose term will expire at
the annual meeting of stockholders to be held in 2001, and Class III, whose term
will expire at the annual meeting of stockholders to be held in 2002. The Class
I directors are Messrs. Ehrenpreis and Randlett, the Class II directors are
Messrs. Kagle and Koogle and the Class III directors are Mr. Larsen and Ms.
Pawlowski. At each annual meeting of stockholders after the initial
classification, the successors to directors whose term will then expire will be
elected to serve from the time of election and qualification until the third
annual meeting following election. Any additional directorships resulting from
an increase in the number of directors will be distributed among the three
classes so that, as nearly as possible, each class will consist of one-third of
the total number of directors. This classification of the Board of Directors may
have the effect of delaying or preventing changes in control or management of
E-LOAN.


     Each officer is elected by, and serves at the discretion of, the Board of
Directors. Each of E-LOAN's officers and directors, other than nonemployee
directors, devotes full time to the affairs of E-LOAN. E-LOAN's nonemployee
directors devote time to the affairs of E-LOAN as is necessary to discharge
their duties. There are no family relationships among any of the directors,
officers or key employees of E-LOAN.

BOARD COMMITTEES

     The Audit Committee of the Board of Directors reviews the internal
accounting procedures of E-LOAN and consults with and reviews the services
provided by E-LOAN's independent accountants. The Audit Committee currently
consists of Messrs. Ehrenpreis, Kagle and Koogle.

     The Compensation Committee of the Board of Directors reviews and recommends
to the Board the compensation and benefits of all executive officers of E-LOAN,
administers E-LOAN's stock option plan and establishes and reviews general
policies relating to compensation and

                                       52
<PAGE>   56

benefits of employees of E-LOAN. The Compensation Committee currently consists
of Messrs. Ehrenpreis, Kagle and Koogle. No interlocking relationships exist
between E-LOAN's Board of Directors or Compensation Committee and the board of
directors or compensation committee of any other company, nor has any
interlocking relationship existed in the past.

DIRECTOR COMPENSATION

     Our directors do not currently receive cash compensation from E-LOAN for
their service as members of the Board of Directors, although they are reimbursed
for certain expenses in connection with attendance at Board and Committee
meetings. E-LOAN does not provide additional compensation for committee
participation or special assignments of the Board of Directors. From time to
time, certain directors of E-LOAN have received grants of options to purchase
shares of E-LOAN's common stock pursuant to the 1997 Stock Option Plan. See
"-- Stock Plans" and "Certain Transactions".

EXECUTIVE COMPENSATION

     The following table sets forth the total compensation received for services
rendered to E-LOAN during the fiscal year ended December 31, 1998 by our Chief
Executive Officer and other executive officers who received salary and bonus in
that fiscal year in excess of $100,000. The executive officers listed in the
table below are sometimes referred to as Named Executive Officers.

<TABLE>
<CAPTION>
                                                                              LONG-TERM
                                                                            COMPENSATION
                                                                        ---------------------
                                                ANNUAL COMPENSATION           NUMBER OF
                                               ----------------------   SECURITIES UNDERLYING
         NAME AND PRINCIPAL POSITION             SALARY       BONUS            OPTIONS
         ---------------------------           ----------   ---------   ---------------------
<S>                                            <C>          <C>         <C>
Chris Larsen
  Chief Executive Officer....................   $129,807     $    --               --
Janina Pawlowski
  President..................................    129,808          --               --
Doug Galen
  Vice President, Business Development &
     Sales...................................    114,496          --          150,000
Steve Majerus
  Vice President, Secondary Marketing........    115,773      47,336          225,000
</TABLE>

     Mr. Bonnikson joined E-LOAN in January 1999 as its Senior Vice President of
Operations and will be compensated at an annual base salary of $150,000 during
the fiscal year ended December 31, 1999. Mr. Crane joined E-LOAN in April 1998
as its Vice President of Engineering and will be compensated at an annual base
salary of $130,000 during the fiscal year ended December 31, 1999. Mr. Kennedy
joined E-LOAN in February 1999 as its Senior Vice President of Marketing and
Business Development will be compensated at an annual base salary of $200,000
during the fiscal year ended December 31, 1999. Mr. Siskowski joined E-LOAN in
October 1998 as its Chief Financial Officer and will be compensated at an annual
base salary of $170,000 during the fiscal year ended December 31, 1999.

                                       53
<PAGE>   57

OPTION GRANTS IN LAST FISCAL YEAR

     The following table sets forth certain summary information concerning
grants of stock options to each of the Named Executive Officers for the year
ended December 31, 1998. E-LOAN has never granted any stock appreciation rights.

<TABLE>
<CAPTION>
                                            INDIVIDUAL GRANTS
                        ---------------------------------------------------------        POTENTIAL REALIZABLE VALUE
                        NUMBER OF      PERCENT OF                                         AT ASSUMED ANNUAL RATES
                        SECURITIES   TOTAL OPTIONS                                      OF STOCK PRICE APPRECIATION
                        UNDERLYING     GRANTED TO                                            FOR OPTION TERM(3)
                         OPTIONS      EMPLOYEES IN    EXERCISE PRICE   EXPIRATION   ------------------------------------
       NAME(1)           GRANTED     FISCAL YEAR(2)       ($/SH)          DATE          0%           5%          10%
       -------          ----------   --------------   --------------   ----------   ----------   ----------   ----------
<S>                     <C>          <C>              <C>              <C>          <C>          <C>          <C>
Chris Larsen..........        --            --               --               --                         --           --
Janina Pawlowski......        --            --               --               --                         --           --
Doug Galen............   120,000           3.9%           $0.22         03/12/08    $1,173,600   $1,928,400   $3,086,400
                          30,000           1.0%           $1.00         08/11/08    $  270,000   $  458,700   $  748,200
Steve Majerus.........   225,000           7.3%           $0.22         05/07/08    $2,200,500   $3,615,750   $5,787,000
</TABLE>

- ---------------
(1) In January 1999, E-LOAN granted to Mr. Bonnikson an option to purchase
    654,261 shares of common stock at an exercise price of $2.00 per share,
    which expires on January 13, 2009. In May 1998, E-LOAN granted to Mr. Crane
    an option to purchase 495,000 shares of common stock at an exercise price of
    $0.22 per share, which expires on May 7, 2008. In February 1999, E-LOAN
    granted to Mr. Kennedy an option to purchase 747,519 shares of common stock
    at an exercise price of $2.00 per share, which expires on February 22, 2009.
    In November 1998, E-LOAN granted to Mr. Siskowski an option to purchase
    385,377 shares of common stock at an exercise price of $1.33 per share,
    which expires November 25, 2008.

(2) In 1998, E-LOAN granted options to purchase an aggregate of 3,084,627 shares
    of common stock, of which 3,011,877 were granted to employees and 72,750
    were granted to consultants.

(3) The 0%, 5% and 10% assumed annual rates of stock price appreciation are
    mandated by the rules of the Securities and Exchange Commission and do not
    represent E-LOAN's estimate or projection of future common stock prices. The
    potential realizable value is calculated by assuming that the assumed
    initial public offering price of $10.00 per share appreciates at the
    indicated rate for the entire term of the option and that the option is
    exercised at the exercise price and sold on the last day at the appreciated
    price. The potential realizable value is net of the applicable exercise
    price, but does not take into account applicable federal or state income tax
    consequences and other expenses of option exercises or sales of appreciated
    stock.

FISCAL YEAR END OPTION VALUES

     The following table provides certain summary information concerning stock
options held as of December 31, 1998 by each of the Named Executive Officers.
None of the Named Executive Officers exercised options in fiscal 1998.

<TABLE>
<CAPTION>
                                                       NUMBER OF SECURITIES
                                                      UNDERLYING UNEXERCISED         VALUE OF UNEXERCISED
                                                              OPTIONS               IN-THE-MONEY OPTIONS AT
                                                       AT DECEMBER 31, 1998            DECEMBER 31, 1998
                                                    ---------------------------   ---------------------------
                       NAME                         EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
                       ----                         -----------   -------------   -----------   -------------
<S>                                                 <C>           <C>             <C>           <C>
Chris Larsen......................................        --              --             --              --
Janina Pawlowski..................................        --              --             --              --
Doug Galen........................................    90,000         330,000       $895,500      $3,234,600
Steve Majerus.....................................        --         225,000       $     --      $2,200,500
</TABLE>

                                       54
<PAGE>   58

     There was no public trading market for E-LOAN's common stock as of December
31, 1998. Accordingly, the value of unexercised in-the-money options as of that
date was calculated on the basis of an assumed initial public offering price of
$10.00 per share.

STOCK PLANS

1997 Stock Plan

     E-LOAN's 1997 Stock Plan (1997 Plan) provides for the granting to employees
of incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (Code), and for the granting to employees,
directors and consultants of nonstatutory stock options and stock purchase
rights (SPRs). The 1997 Plan was approved by the Board of Directors in August
1997 and by the stockholders in November 1997. The Board approved amendments to
the 1997 Plan to increase the number of shares reserved under the 1997 Plan in
May 1998 and January 1999, and the stockholders also approved these amendments
to the 1997 Plan in May 1998 and January 1999. Unless terminated sooner, the
1997 Plan will terminate automatically in 2007. A total of 10,500,000 shares of
common stock is currently reserved for issuance pursuant to the 1997 Plan, plus
annual increases equal to the lesser of 4,500,000 shares, 4% of the then
outstanding shares, or a lesser amount determined by the Board.

     The 1997 Plan may be administered by the board of directors or a committee
of the board (as applicable, the "Administrator"), which committee shall, in the
case of options intended to qualify as "performance-based compensation" within
the meaning of Section 162(m) of the Code, consist of two or more "outside
directors" within the meaning of Section 162(m) of the Code. The Administrator
has the power to determine the terms of the options or SPRs granted, including
the exercise price, the number of shares, the exercisability thereof, and the
form of consideration payable upon exercise. The board has the authority to
amend, suspend or terminate the 1997 Plan, provided that the action may not
adversely affect any share of common stock previously issued and sold or any
option previously granted under the 1997 Plan.

     Options and SPRs granted under the 1997 Plan are not generally transferable
by the optionee, and each option and SPR is exercisable during the lifetime of
the optionee only by the optionee. Options granted under the 1997 Plan must
generally be exercised within three months of the Optionee's separation of
service from E-LOAN, or within 12 months after the optionee's termination by
death or disability, but in no event later than the expiration of the option's
ten year term. In the case of SPRs, unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant E-LOAN a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service for E-LOAN for any reason, including death or
disability. The purchase price for Shares repurchased pursuant to the Restricted
Stock Purchase Agreement shall be the original price paid by the purchaser and
may be paid by cancellation of any indebtedness of the purchaser to E-LOAN. The
repurchase option shall lapse at a rate determined by the Administrator. The
exercise price of all incentive stock options granted under the 1997 Plan must
be at least equal to the fair market value of the common stock on the date of
grant. The exercise price of nonstatutory stock options and SPRs granted under
the 1997 Plan is determined by the Administrator, but with respect to
nonstatutory stock options intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the exercise
price must at least be equal to the fair market value of the common stock on the
date of grant. With respect to any participant who owns stock possessing more
than 10% of the voting power of all classes of E-LOAN's outstanding capital
stock, the exercise price of any incentive stock option granted must equal at
least 110% of the fair market value on the grant date and the term of any
incentive stock option must not exceed five years. The term of all other options
granted under the 1997 Plan may not exceed ten years.

     The 1997 Plan provides that in the event of a merger of E-LOAN with or into
another corporation or a sale of substantially all of E-LOAN's assets, each
option or SPR shall be

                                       55
<PAGE>   59

assumed or an equivalent option or SPR substituted by the successor corporation.
If each outstanding option or SPR is not assumed or substituted as described in
the preceding sentence, the Administrator shall notify the Optionees that each
option or SPR shall be fully vested and exercisable, including shares as to
which it would not otherwise be exercisable, for a period of 15 days from the
date of notice, and the option or SPR will terminate upon the expiration of the
period.

1999 Employee Stock Purchase Plan

     E-LOAN's 1999 Employee Stock Purchase Plan (1999 Purchase Plan) was adopted
by the Board of Directors in March 1999 and approved by the stockholders in
April 1999. A total of 1,500,000 shares of common stock has been reserved for
issuance under the 1999 Purchase Plan, plus annual increases on the first day of
E-LOAN's fiscal year beginning in or after 2000 equal to the lesser of 1,500,000
shares, 2% of the then outstanding shares or a lesser amount determined by the
Board. As of the date of this Prospectus, no shares have been issued under the
1999 Purchase Plan.

     The 1999 Purchase Plan, which is intended to qualify under Section 423 of
the Internal Revenue Code of 1986, as amended, contains consecutive overlapping
24-month offering periods. Each offering period includes four six-month purchase
periods. The offering periods generally start on the first trading day on or
after May 1 and November 1 of each year, except for the first offering period
which commences on the first trading day on or after the effective date of this
Offering and ends on the last trading day on or before April 30, 2001.

     Employees are eligible to participate if they are customarily employed by
E-LOAN or any participating subsidiary for at least 20 hours per week and more
than five months in any calendar year. However, to the extent any employee (a)
immediately after a grant would own stock or hold options to purchase stock
possessing 5% or more of the total combined voting power or value of all classes
of the capital stock of E-LOAN or (b) would have rights to purchase stock under
all employee stock purchase plans of E-LOAN which exceed $25,000 worth of stock
for each calendar year in which the options are outstanding, the employee may be
not be granted an option to purchase stock under the 1999 Purchase Plan. The
1999 Purchase Plan permits participants to purchase common stock through payroll
deductions of up to 15% of the participant's "compensation". Compensation is
defined as the participant's base straight time gross earnings, commissions,
cash incentive payments and bonuses, but exclusive of payments for overtime,
profit sharing payments, shift premium payments, non-cash compensation and other
compensation. The maximum number of shares a participant may purchase during a
single purchase period is 3,750 shares.

     Amounts deducted and accumulated by the participant are used to purchase
shares of common stock at the end of each purchase period. The price of stock
purchased under the 1999 Purchase Plan is generally 85% of the lower of the fair
market value of the common stock (i) at the beginning of the offering period or
(ii) at the end of the purchase period. In the event the fair market value at
the end of a purchase period is less than the fair market value at the beginning
of the offering period, the participants will be withdrawn from the current
offering period following exercise and automatically re-enrolled in a new
offering period. The new offering period will use the lower fair market value as
of the first date of the new offering period to determine the purchase price for
future purchase periods. Participants may end their participation at any time
during an offering period, and they will be paid their payroll deductions to
date. Participation ends automatically upon termination of employment with
E-LOAN.

     Rights granted under the 1999 Purchase Plan are not transferable by a
participant other than by will, the laws of descent and distribution, or as
otherwise provided under the 1999 Purchase Plan. The 1999 Purchase Plan provides
that, in the event of a merger of E-LOAN with or into another corporation or a
sale of substantially all of E-LOAN's assets, each outstanding option

                                       56
<PAGE>   60

may be assumed or substituted for by the successor corporation. If the successor
corporation refuses to assume or substitute for the outstanding options, the
offering period then in progress will be shortened and a new exercise date will
be set. After shares have been purchased on the New Exercise Date, the 1999
Purchase Plan will terminate. Unless terminated earlier, the 1999 Purchase Plan
will terminate in 2009. The Board of Directors has the authority to amend or
terminate the 1999 Purchase Plan, except that no action may adversely affect any
outstanding rights to purchase stock under the 1999 Purchase Plan.

401(K) PLAN

     E-LOAN maintains an employee savings and retirement plan (401(k) Plan)
which covers all eligible employees of E-LOAN (Participants). Pursuant to the
401(k) Plan, Participants may elect to reduce their current compensation, on a
pre-tax basis, up to 15%, or the statutorily prescribed annual limit, whichever
is lower, and have the amount of the reduction contributed to the 401(k) Plan.
Participants' salary reduction contributions are fully vested at all times.
E-LOAN, in its sole discretion, may make discretionary employer contributions,
qualified discretionary employer contributions and matching contributions to the
401(k) Plan. Each Participants' interest in their employer discretionary
contributions and matching contributions generally vest in accordance with a
four-year graduated vesting schedule. Participants may receive loans and
hardship distributions while in service and are eligible for a distribution from
the 401(k) Plan upon separation from service with E-LOAN. The 401(k) Plan is
intended to qualify under Section 401(a) of the Code, and its accompanying trust
is intended to be a tax-exempt trust under Section 501(a) of the Code.
Contributions made on behalf of Participants, on a pre-tax basis, to the 401(k)
Plan, and income earned on the contributions, are not currently taxable to
Participants until distributed to them. All contributions are tax deductible by
E-LOAN. The trustee under the 401(k) Plan, at the direction of Participants,
invests the assets of the 401(k) Plan in any of seven designated investment
options.

EMPLOYMENT AGREEMENT AND CHANGE OF CONTROL ARRANGEMENTS

     Under the terms of E-LOAN's offer of employment to Mr. Kennedy, if Mr.
Kennedy's employment is terminated by E-LOAN or a successor company to E-LOAN
within six months prior to or 12 months following a change of control, E-LOAN
has agreed to pay Mr. Kennedy three years of salary, accelerate vesting of all
shares under Mr. Kennedy's option and pay a gross-up for any taxation Mr.
Kennedy incurs in connection with the payment and acceleration above standard
individual taxes for ordinary income. Alternatively, if Mr. Kennedy's employment
is terminated by E-LOAN at any time, E-LOAN has agreed to give Mr. Kennedy three
months notice of termination, pay Mr. Kennedy 12 months of salary and accelerate
vesting of that number of shares under Mr. Kennedy's option that would have been
exercisable on the date 12 months following the date of termination. E-LOAN is
not required to perform any of these obligations if Mr. Kennedy's termination
from E-LOAN is due to a criminal act or gross violation of E-LOAN policy. E-LOAN
has also agreed to reimburse Mr. Kennedy for relocation expenses he incurred in
relocating to the Bay Area.

     In accordance with the terms of their option agreements under E-LOAN's 1997
Stock Plan, whether or not the options are assumed or substituted in a merger,
acquisition or asset sale, each Named Executive Officer's outstanding options
vest and become exercisable as to an additional 50% of the unvested shares at
the time of the merger, acquisition or sale of assets.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

     E-LOAN's Restated Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a corporation will not

                                       57
<PAGE>   61

be personally liable for monetary damages for breach of their fiduciary duties
as directors, except liability for:

     - breach of their duty of loyalty to the corporation or its stockholders;

     - acts or omissions not in good faith or which involve intentional
       misconduct or a knowing violation of law;

     - unlawful payments of dividends or unlawful stock repurchases or
redemptions; or

     - any transaction from which the director derived an improper personal
benefit.

     The limitation of liability does not apply to liabilities arising under the
federal or state securities laws and does not affect the availability of
equitable remedies, including injunctive relief or rescission.

     E-LOAN's Bylaws provide that E-LOAN shall indemnify its directors,
officers, employees and other agents to the fullest extent permitted by law.
E-LOAN believes that indemnification under its Bylaws covers at least negligence
and gross negligence on the part of indemnified parties. E-LOAN's Bylaws also
permit it to secure insurance on behalf of any officer, director, employee or
other agent for any liability arising out of his or her actions in such
capacity, regardless of whether the Bylaws permit indemnification.

     E-LOAN has entered into agreements to indemnify its directors and executive
officers, in addition to the indemnification provided for in its Bylaws. These
agreements, among other things, indemnify E-LOAN's directors and executive
officers for certain expenses (including attorneys' fees), judgments, fines and
settlement amounts incurred by any person in any action or proceeding, including
any action by or in the right of E-LOAN arising out of that person's services as
a director, officer, employee, agent or fiduciary of E-LOAN, any subsidiary of
E-LOAN or any other company or enterprise to which the person provides services
at the request of E-LOAN. E-LOAN believes that these provisions and agreements
are necessary to attract and retain qualified persons as directors and executive
officers.

     At present, there is no pending litigation or proceeding involving a
director or officer of E-LOAN in which indemnification is required or permitted,
and E-LOAN is not aware of any threatened litigation or proceeding that may
result in a claim for indemnification.

                                       58
<PAGE>   62

                              CERTAIN TRANSACTIONS

     In December 1997, E-LOAN issued shares of Series B preferred stock to
certain investors at a purchase price of $0.96 per share, which shares will
automatically convert into 1,290,621 shares of common stock upon the completion
of this offering. Also in December 1997, E-LOAN issued shares of Series C
preferred stock to certain investors at a purchase price of $1.23 per share,
which shares will automatically convert into 12,809,808 shares of common stock
upon completion of this offering. In September 1998 and February 1999, E-LOAN
issued shares of Series D preferred stock to certain investors at a purchase
price of $9.26 per share, which shares will automatically convert into 5,107,587
shares of common stock upon the completion of this offering. The investors in
the Series B preferred stock, Series C preferred stock and Series D preferred
stock include the following affiliates of E-LOAN:

<TABLE>
<CAPTION>
                                                          SHARES OF   SHARES OF    SHARES OF
                                                          SERIES B    SERIES C     SERIES D
                                                          PREFERRED   PREFERRED    PREFERRED
                        INVESTOR                            STOCK       STOCK        STOCK
                        --------                          ---------   ---------    ---------
<S>                                                       <C>         <C>          <C>
Doug Galen..............................................   15,625           --           --
Benchmark Capital Partners II L.P.(1)...................       --     2,589,959      97,161
Entities Affiliated with Technology Partners(2).........       --     1,479,977      75,570
Entities Affiliated With STV IV, LLC(3).................       --           --      777,286
Yahoo!, Inc.(4).........................................       --           --      323,869
Harold "Pete" Bonnikson.................................       --           --       40,000
</TABLE>

- -------------------------
(1) Mr. Kagle, a director of E-LOAN, is a member of Benchmark Capital Management
    Co., L.L.C., the general partner of Benchmark Capital Partners II L.P.

(2) Technology Partners Fund V, L.P. purchased 739,989 shares of Series C
    preferred stock and 16,361 shares of Series D preferred stock. Technology
    Partners Fund VI, L.P. purchased 739,988 shares of Series C preferred stock
    and 59,209 shares of Series D preferred stock. Mr. Ehrenpreis, a director of
    E-LOAN, is a general partner of TPW Management V, L.P., the general partner
    of Technology Partners Fund V, L.P. and is a managing member of TP
    Management VI, L.L.C., the general partner of Technology Partners Fund VI,
    L.P.

(3) Softbank Holdings, Inc., L.P. purchased 388,643 shares of Series D preferred
    stock, Softbank Technology Advisors Fund, L.P. purchased 7,306 shares of
    Series D preferred stock, and Softbank Technology Ventures IV, L.P.
    purchased 381,337 shares of Series D preferred stock.

(4) Mr. Koogle, a director of E-LOAN, is the Chief Executive Officer of Yahoo!

     In December 1997, E-LOAN entered into an agreement with Yahoo!, Inc., under
which E-LOAN became the exclusive provider of mortgage related information on
the "Yahoo! Loan Center" website and E-LOAN and Yahoo! will conduct joint
marketing activities. In September 1998, E-LOAN entered into a subsequent
agreement with Yahoo!, which became effective in March 1999 upon the expiration
of the December 1997 agreement, under which E-LOAN would continue to be the
exclusive provider of mortgage related information on the "Yahoo! Loan Center"
website and E-LOAN and Yahoo! would continue to conduct joint marketing
activities through February 2000. In March 1999, the parties extended this
agreement through February 2001. Pursuant to the agreement, E-LOAN is required
to pay a slotting fee plus click-through fees to Yahoo! Tim Koogle, a director
of E-LOAN, is the Chief Executive Officer of Yahoo!

     In October 1997, March 1998 and August 1998, E-LOAN granted to Doug Galen,
its Vice President of Business Development and Sales, options to purchase
270,000, 120,000 and 30,000 shares of common stock, respectively, at $0.05,
$0.22 and $1.00 per share, respectively. These

                                       59
<PAGE>   63

options vest according to the following schedules:  1/4(th) of the total number
of shares under each option vests on August 26, 1998, March 12, 1999 and August
11, 1999, respectively, and 1/48(th) of the total number of shares under each
option vests at the end of each full month thereafter.

     In December 1997 and August 1998, E-LOAN granted to Janet Hammond, its Vice
President of Underwriting, an option to purchase 45,000 shares and two separate
options to purchase 30,000 shares of common stock each, respectively, at $0.22
and $1.00 per share, respectively. These options vest according to the following
schedules:  1/4(th) of the total number of shares subject to each option vests
on December 10, 1998, May 1, 1999 and August 11, 1999, respectively, and
1/48(th) of the total number of shares subject to each option vests at the end
of each full month thereafter.

     In May 1998, E-LOAN granted to Bill Crane, its Vice President of
Engineering, an option to purchase 495,000 shares of common stock at $0.22 per
share. This option vests according to the following schedule:  1/4(th) of the
total number of shares vests on April 20, 1999 and 1/48(th) of the total number
of shares vests at the end of each full month thereafter.

     In May 1998, January 1999 and February 1999, E-LOAN granted to Sharon
Ruwart, its Vice President of Marketing, options to purchase 180,000, 30,000 and
15,000 shares of common stock, respectively, at $0.22, $2.00 and $2.00 per
share, respectively. These options vest according to the following schedules:
 1/4(th) of the total number of shares under each option vests on May 1, 1999,
January 1, 2000 and February 22, 2000, respectively, and 1/48(th) of the total
number of shares under each option vests at the end of each full month
thereafter.

     In May 1998 and February 1999, E-LOAN granted to Steve Majerus, its Vice
President of Secondary Markets, options to purchase 225,000 and 75,000 shares of
common stock, respectively, at $0.22 and $2.00 per share, respectively. These
options vest according to the following schedules:  1/4(th) of the total number
of shares under each option vests on April 27, 1999 and February 22, 2000,
respectively, and 1/48(th) of the total number of shares under each option vests
at the end of each full month thereafter.

     In November 1998, E-LOAN granted to Frank Siskowski, its Chief Financial
Officer, an option to purchase 385,377 shares of common stock at $1.33 per
share. This option vests according to the following schedule:  1/4(th) of the
total number of shares vests on October 26, 1999 and 1/48(th) of the total
number of shares vests at the end of each full month thereafter.

     In January 1999, E-LOAN granted to Harold "Pete" Bonnikson, its Senior Vice
President of Operations, an option to purchase 654,261 shares of common stock at
$2.00 per share. This option vests according to the following schedule:  1/4(th)
of the total number of shares vests on January 13, 2000 and 1/48(th) of the
total number of shares vests at the end of each full month thereafter.

     In February, 1999, E-LOAN granted to Joseph Kennedy, its Senior Vice
President of Marketing and Business Development, an option to purchase 747,519
shares of common stock at $2.00 per share. This option vests according to the
following schedule:  1/4(th) of the total number of shares vests on February 22,
2000 and 1/48(th) of the total number of shares vests at the end of each full
month thereafter. For a description of the terms of the employment arrangement
between E-LOAN and Mr. Kennedy, see "Management -- Employment Agreement and
Change of Control Arrangements".

     In March 1999, E-LOAN entered into a joint venture agreement with Softbank
Corp., under which E-LOAN will hold a minority interest in E-LOAN Japan, a
Japanese corporation. E-LOAN Japan will develop, market and provide an online
mortgage marketplace to serve consumers in Japan and the Republic of Korea.

     E-LOAN has entered into indemnification agreements with its officers and
directors containing provisions that require E-LOAN, among other things, to
indemnify its officers and

                                       60
<PAGE>   64

directors against certain liabilities that may arise by reason of their status
or service as officers or directors, other than liabilities arising from willful
misconduct of a culpable nature, and to advance their expenses incurred as a
result of any proceeding against them as to which they could be indemnified.

     In May 1999, E-LOAN established the E-LOAN Foundation, a charitable fund
which is administered by the Community Foundation Silicon Valley. To capitalize
the E-LOAN Foundation, E-LOAN donated 75,000 shares of common stock to the
Community Foundation Silicon Valley on behalf of the E-LOAN Foundation. The
E-LOAN Foundation is selling 5,000 shares of common stock in this offering.

                                       61
<PAGE>   65

                       PRINCIPAL AND SELLING STOCKHOLDERS

     The following table sets forth information with respect to beneficial
ownership of E-LOAN's common stock as of May 18, 1999 and as adjusted to reflect
the sale of common stock offered by this prospectus and in the private placement
to be closed at the same time as this offering, in each case reflecting the
common stock beneficially held by the following individuals or groups:

     - each person known by E-LOAN to beneficially own more than 5% of its
       outstanding common stock;

     - each director of E-LOAN;

     - each Named Executive Officer listed in the Summary Compensation Table;

     - all directors and executive officers of E-LOAN as a group; and

     - the E-LOAN Foundation, the selling stockholder.

     Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting or investment power with
respect to the securities. The address for each listed director and officer is
c/o E-LOAN, Inc., 5875 Arnold Road, Suite 100, Dublin, California 94568. Except
as indicated by footnote, and subject to applicable community property laws, the
persons named in the table have sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them. The number of
shares of common stock outstanding used in calculating the percentage for each
listed person includes the shares of common stock underlying options or warrants
held by that person that are exercisable within 60 days of May 18, 1999, but
excludes shares of common stock underlying options or warrants held by any other
person. Percentage of beneficial ownership prior to this offering is based on
33,737,403 shares of common stock outstanding as of May 18, 1999, after giving
effect to the conversion of the outstanding preferred stock and the exercise and
conversion of a warrant to purchase Series D preferred stock. Percentage of
beneficial ownership after this offering is based on 38,482,403 shares of common
stock to be outstanding after completion of this offering and the private
placement that will close at the same time as this offering.

                                       62
<PAGE>   66

<TABLE>
<CAPTION>
                                                                               PERCENTAGE OF
                                                                                  SHARES
                                                                               BENEFICIALLY
                                                                                   OWNED
                                                SHARES         NUMBER       -------------------
                                             BENEFICIALLY     OF SHARES     PRIOR TO    AFTER
         NAME OF BENEFICIAL OWNER               OWNED       BEING OFFERED   OFFERING   OFFERING
         ------------------------            ------------   -------------   --------   --------
<S>                                          <C>            <C>             <C>        <C>
Benchmark Capital Partners II L.P.(1)......    8,061,360           --         23.9%      20.9%
  Robert C. Kagle
Entities affiliated with Technology
  Partners(2)..............................    4,666,641           --         13.8%      12.1%
  Ira M. Ehrenpreis
Entities affiliated with STV IV, LLC(3)....    3,304,590           --          9.8%       8.6%
Chris Larsen(4)............................    5,555,121           --         16.5%      14.4%
Janina Pawlowski(5)........................    5,511,927           --         16.3%      14.3%
Doug Galen(6)..............................      185,625           --            *          *
Steve Majerus(7)...........................       65,625           --            *          *
Tim Koogle(8)..............................      971,607           --          2.9%       2.5%
Wade Randlett..............................        1,500           --            *          *
The E-LOAN Foundation(9)...................       75,000        5,000            *          *
All directors and executive officers as a
  group (15 persons)(10)...................   25,345,531           --         75.1%      65.9%
</TABLE>

- -------------------------
  *  Represents beneficial ownership of less than one percent of E-LOAN's common
     stock.


 (1) Excludes 483,132 shares beneficially owned by Chris Larsen and pledged to
     Benchmark Capital Partners II L.P. pursuant to Loan and Pledge Agreements
     between Benchmark Capital Partners II L.P. and Mr. Larsen. Also excludes
     483,132 shares beneficially owned by Janina Pawlowski and pledged to
     Benchmark Capital Partners II L.P. pursuant to Loan and Pledge Agreements
     between Benchmark Capital Partners II L.P. and Ms. Pawlowski. Mr. Kagle, a
     director of E-LOAN, is a member of Benchmark Capital Management Co.,
     L.L.C., the general partner of Benchmark Capital Partners II, L.P. and
     disclaims beneficial ownership of the shares held by Benchmark Capital
     Partners II, L.P. except to the extent of his proportionate partnership
     interest therein.


 (2) Consists of 2,397,591 shares held of record by Technology Partners Fund VI,
     L.P. and 2,269,050 shares held of record by Technology Partners Fund V,
     L.P. Excludes 237,933 and 57,672 shares beneficially owned by Chris Larsen
     and pledged to Technology Partners Fund V, L.P. and Technology Partners
     Fund VI, L.P., respectively, pursuant to Loan and Pledge Agreements between
     these entities and Mr. Larsen. Also excludes 237,933 and 57,672 shares
     beneficially owned by Janina Pawlowski and pledged to Technology Partners
     Fund V, L.P. and Technology Partners Fund VI, L.P., respectively, pursuant
     to Loan and Pledge Agreements between these entities and Ms. Pawlowski. Mr.
     Ehrenpreis, a director of E-LOAN, is a general partner of TPW Management V,
     L.P., the general partner of Technology Partners Fund V, L.P. and is a
     managing member of TP Management VI, L.L.C., the general partner of
     Technology Partners Fund VI, L.P. and disclaims beneficial ownership of the
     shares held by Technology Partners Fund VI, L.P. and Technology Partners
     Fund V, L.P. except to the extent of his proportionate partnership interest
     therein.

 (3) Consists of 1,165,929 shares held of record by Softbank Holdings, Inc.
     L.P., 1,144,011 shares held of record by Softbank Technology Ventures IV,
     L.P., 21,918 shares held of record by Softbank Technology Advisors Fund,
     L.P., and 972,732 shares held of record by Softbank America Inc. Excludes
     378,549, 370,527, 8,025 and 346,731 shares beneficially owned by Chris
     Larsen and pledged to Softbank Holdings, Inc., Softbank Technology Ventures
     IV, L.P., Softbank Technology Advisors Fund, L.P., and Softbank
                                       63
<PAGE>   67

     America Inc., respectively, pursuant to Loan and Pledge Agreements between
     these entities and Mr. Larsen. Also excludes 378,549, 370,527, 8,025 and
     303,387 shares beneficially owned by Janina Pawlowski and pledged to
     Softbank Holdings, Inc., Softbank Technology Ventures IV, L.P., Softbank
     Technology Advisors Fund, L.P., and Softbank America Inc., respectively,
     pursuant to Loan and Pledge Agreements between these entities and Ms.
     Pawlowski.

 (4) Includes 150,000 shares held of record by the Larsen Trust. Also includes
     2,576,577 shares that are pledged to certain investors to secure $10.8
     million in full recourse loans made to Mr. Larsen by these investors. All
     of Mr. Larsen's pledged shares are also subject to put and call options
     pursuant to agreements between Mr. Larsen and these investors. See
     "Description of Capital Stock -- Put/Call Options on Common Stock".

 (5) Includes 150,000 shares held of record by the Pawlowski Trust. Also
     includes 2,533,233 shares that are pledged to certain investors to secure
     $10.1 million in full recourse loans made to Ms. Pawlowski by these
     investors. All of Ms. Pawlowski's pledged shares are also subject to put
     and call options pursuant to agreements between Ms. Pawlowski and these
     investors. See "Description of Capital Stock -- Put/Call Options on Common
     Stock".

 (6) Includes 21,876 stock options that are exercisable within 60 days of May
     18, 1999.

 (7) Includes 9,375 stock options that are exercisable within 60 days of May 18,
     1999.


 (8) Consists of 971,607 shares held of record by Yahoo!, Inc. Excludes 315,459
     shares beneficially owned by Chris Larsen and pledged to Yahoo!, Inc.
     pursuant to a Loan and Pledge Agreement between Yahoo!, Inc. and Mr.
     Larsen. Also excludes 315,459 shares beneficially owned by Janina Pawlowski
     and pledged to Yahoo!, Inc. pursuant to a Loan and Pledge Agreement between
     Yahoo!, Inc. and Ms. Pawlowski. Mr. Koogle, a director of E-LOAN, is Chief
     Executive Officer of Yahoo! and disclaims beneficial ownership of the
     shares held by Yahoo!


 (9) In May 1999, E-LOAN established a fund known as the E-LOAN Foundation,
     which is administered by the Community Foundation Silicon Valley, and to
     capitalize this foundation, donated 75,000 shares of common stock to the
     E-LOAN Foundation.

(10) Includes 237,376 stock options that are exercisable within 60 days of May
     18, 1999.

                                       64
<PAGE>   68

                      THE FORUM HOLDINGS PRIVATE PLACEMENT

     In May 1999, E-LOAN entered into a stock purchase agreement with Forum
Holdings, Inc. (Forum) in which E-LOAN agreed to sell shares of common stock to
Forum equal to $12,500,000 divided by the initial public offering price less the
underwriting discount, for a per share price equal to the initial public
offering price less the underwriting discount. E-LOAN entered into this
transaction with Forum in order to support E-LOAN's branding efforts in Europe.
Forum, through its affiliation with the European consumer groups conglomerate
LVMH, has offered to assist E-LOAN with its anticipated European expansion.
There is no affiliation between E-LOAN and Forum. The stock purchase agreement
further provides that Forum will not sell, transfer, encumber or otherwise
dispose of any of the common stock acquired in the private placement in a public
or private sale for a period of one year following the closing of the private
placement.

     In addition, Forum has agreed that it will notify E-LOAN of any sale by it
of E-LOAN common stock. Finally, at any time after it owns in excess of 9.5% of
E-LOAN's outstanding common stock and E-LOAN's Board of Directors approves a
sale of substantially all of E-LOAN's assets or a merger in which E-LOAN is not
the surviving entity, Forum has agreed to vote its shares of E-LOAN common stock
in the same proportion as the other stockholders of E-LOAN.

                          DESCRIPTION OF CAPITAL STOCK

GENERAL

     E-LOAN's Restated Certificate of Incorporation, which will become effective
upon the closing of this offering, authorizes the issuance of up to 70 million
shares of common stock, par value $0.001 per share, and five million shares of
preferred stock, par value $0.001 per share, the rights and preferences of which
may be established by E-LOAN's Board of Directors. As of March 31, 1999,
12,742,974 shares of common stock were issued and outstanding and 6,831,307
shares of preferred stock convertible into 20,493,921 shares of common stock
upon the completion of this offering were issued and outstanding. As of March
31, 1999, E-LOAN had 72 stockholders.

COMMON STOCK

     Each holder of common stock is entitled to one vote for each share on all
matters to be voted upon by the stockholders and there are no cumulative voting
rights. After taking into account preferences to which holders of preferred
stock issued after the sale of the common stock in this offering may be
entitled, holders of common stock are entitled to receive dividends, if any, as
may be declared by the Board of Directors out of funds legally available
therefor. See "Dividend Policy". In the event of a liquidation, dissolution or
winding up of E-LOAN, holders of common stock would be entitled to share in
E-LOAN's assets remaining after the payment of liabilities and the satisfaction
of any liquidation preference granted the holders of any outstanding shares of
preferred stock. Holders of common stock have no preemptive or conversion rights
or other subscription rights and there are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock are, and the shares of common stock offered by E-LOAN in this offering,
when issued and paid for, will be, fully paid and nonassessable. The rights,
preferences and privileges of the holders of common stock are subject to, and
may be adversely affected by, the rights of the holders of shares of any series
of preferred stock which E-LOAN may designate in the future.

PREFERRED STOCK

     Upon the closing of this offering, the Board of Directors will be
authorized, absent any limitations prescribed by law, without stockholder
approval, to issue up to an aggregate of
                                       65
<PAGE>   69

five million shares of preferred stock, in one or more series, each of the
series to have rights and preferences, including voting rights, dividend rights,
conversion rights, redemption privileges and liquidation preferences, as shall
be determined by the Board of Directors. The rights of the holders of common
stock will be subject to, and may be adversely affected by, the rights of
holders of any preferred stock that may be issued in the future. Issuance of
preferred stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from attempting to acquire, a majority of the outstanding voting
stock of E-LOAN. E-LOAN has no present plans to issue any shares of preferred
stock.

WARRANTS

     As of March 31, 1999, E-LOAN had outstanding a warrant to purchase 15,000
shares of Series C preferred stock at an exercise price of $2.00 per share,
convertible into 45,000 shares of common stock upon the effectiveness of this
offering, and a warrant to purchase 53,996 shares of Series D preferred stock at
an exercise price of $9.26 per share, convertible into 161,988 shares of common
stock upon the effectiveness of this offering. Each warrant has a net exercise
provision under which the holder may, in lieu of payment of the exercise price
in cash, surrender the warrant and receive a net amount of shares, based on the
fair market value of E-LOAN's stock at the time of the exercise of the warrant,
after deducting the aggregate exercise price. The warrant for 53,996 shares of
Series D preferred stock will expire upon the closing of this offering. The
warrant for 15,000 shares of Series C preferred stock shall expire three years
from the effective date of this offering.

     In May 1999, E-LOAN issued a warrant to purchase 75,000 shares of common
stock at an exercise price equal to the lesser of $13.33 per share and the per
share offering price of the common stock to be issued in this offering. The
warrant has a net exercise provision under which the holder may, in lieu of
payment of the exercise price in cash, surrender the warrant and receive a net
amount of shares, based on the fair market value of E-LOAN's stock at the time
of the exercise of the warrant, after deducting the aggregate exercise price.
The warrant expires May 21, 2000.

REGISTRATION RIGHTS

     Pursuant to the terms of an Investor Rights Agreement among E-LOAN and
certain holders of E-LOAN's securities, after the closing of this offering, the
holders of 17,842,395 shares of the outstanding common stock or their permitted
transferees, including shares issuable upon the exercise of warrants to purchase
common stock, are entitled to certain rights with respect to the registration of
the shares under the Securities Act. The holders of at least 66 2/3% of the
shares entitled to registration rights may require E-LOAN to file a registration
statement covering shares entitled to registration rights with an aggregate
gross offering price of at least $1.5 million. E-LOAN is not required to effect
(i) more than two registrations pursuant to demand registration rights; (ii) a
registration within 60 days following the determination by the Board of
Directors of E-LOAN to file a registration statement; (iii) a registration
during the period in which any other registration statement has been filed or
has been declared effective within the prior 120 days; or (iv) a registration
for a period not to exceed 120 days, if the Board of Directors of E-LOAN has
made a good faith determination that a registration would be seriously
detrimental to E-LOAN or to its stockholders. Pursuant to the terms of the
Investor Rights Agreement, the holders of the shares entitled to registration
rights are entitled to certain piggyback registration rights in connection with
any registration by E-LOAN of its securities for its own account or the account
of other security holders. In the event that E-LOAN proposes to register any
shares of common stock under the Securities Act, the holders of piggyback
registration rights are entitled to receive notice of the registration and are
entitled to include their shares in the registration.

                                       66
<PAGE>   70

     At any time after E-LOAN becomes eligible to file a registration statement
on Form S-3, holders of 20% or more of the Registrable Securities may require
E-LOAN to file an unlimited number of registration statements on Form S-3 under
the Securities Act with respect to their shares of common stock.

     Each of the foregoing registration rights is qualified by certain
conditions and limitations, including the right of the underwriters in any
underwritten offering to limit the number of shares to be included in a
registration. The registration rights with respect to any holder thereof
terminate upon the earlier of (i) seven years from the effective date of this
offering or (ii) when the shares held by the holder may be sold under Rule 144
during any three-month period. E-LOAN is generally required to bear all of the
expenses of all registrations, except underwriting discounts and commissions.
Registration of any of the shares entitled to registration rights would result
in the shares becoming freely tradable without restriction under the Securities
Act immediately upon effectiveness of the registration. The Investor Rights
Agreement also contains a commitment of E-LOAN to indemnify the holders of
registration rights.

PUT/CALL OPTIONS ON COMMON STOCK

     In December 1997, Chris Larsen, E-LOAN's Chief Executive Officer, and
Janina Pawlowski, E-LOAN's President, each entered into a separate Loan and
Pledge Agreement with some of E-LOAN's investors under which each of these
officers were loaned $250,000 on a full recourse basis. Each officer secured his
or her loan with a pledge of 610,491 shares of common stock and a security
interest in the officer's rights under a Put Option Agreement and Call Option
Agreement among the investors and each officer. The loans are due December 19,
2002 and bear interest, compounded annually, at a rate of 7% per annum. Under
the Call Option Agreements, each officer granted the investors an option to call
the 610,491 shares covered by the option at any time from the date of the
agreement up to December 19, 2001 at an exercise price equal to an aggregate of
$500,000. Under the Put Option Agreements, the investors granted to each officer
an option to put the 610,491 shares covered by the option to the investors at an
exercise price equal to an aggregate of $500,000 together with interest at the
rate of 7% per annum, compounded annually, at any time during the eleven-month
period beginning January 20, 2002 and ending November 19, 2002.

     In August 1998, each of these officers entered into a separate Loan and
Pledge Agreement with the investors under which each officer was loaned $5.0
million on a full recourse basis. Each officer secured his or her loan with a
pledge of 1,619,355 shares of common stock and a security interest in the
officer's rights under a Put Option Agreement and Call Option Agreement among
the investors and each officer. The loans are due August 31, 2003 and bear
interest, compounded annually, at a rate of 6% per annum. Under the Call Option
Agreement, each officer granted the investors an option to call the 1,619,355
shares covered by the option at any time from the date of the agreement up to
August 31, 2002 at an exercise price equal to an aggregate of $10.0 million.
Under the Put Option Agreements, the investors granted to each officer an option
to put the 1,619,355 shares covered by the option to the investors at an
exercise price equal to an aggregate $10.0 million together with interest of the
rate of 6% per annum, compounded annually, at any time during the eleven-month
period beginning January 1, 2003 and ending November 30, 2003.

     In March 1999, Softbank America Inc. purchased an aggregate of 972,732
shares of common stock and preferred stock from 25 stockholders of E-LOAN,
including 253,269 and 221,613 shares of common stock from Mr. Larsen and Ms.
Pawlowski, respectively, at a purchase price of $16.00 per share. The
stockholders agreement with Softbank America provides that Softbank America will
not dispose of the acquired shares prior to March 23, 2000.

     At the time of these purchases, Mr. Larsen and Ms. Pawlowski each entered
into a separate Loan and Pledge Agreement with Softbank America under which Mr.
Larsen was loaned

                                       67
<PAGE>   71

$5.5 million on a full recourse basis and Ms. Pawlowski was loaned $4.8 million
on a full recourse basis. Mr. Larsen secured his loan with a pledge of 346,731
shares of common stock and Ms. Pawlowski secured her loan with a pledge of
303,387 shares of common stock and both granted Softbank America a security
interest in the officer's rights under a Put Option Agreement and a Call Option
Agreement. The loans are due March 23, 2004 and bear interest, compounded
annually, at a rate of 7% per annum. Under the Call Option Agreements, both Mr.
Larsen and Ms. Pawlowski granted Softbank America an option to call all of the
shares covered by the option at any time from the date of the agreement up to
March 23, 2003 at an exercise price equal to $5.5 million and $4.8 million,
respectively. Under the Put Option Agreements, Softbank America granted to both
Mr. Larsen and Ms. Pawlowski an option to put all of the shares covered by the
option at an exercise price equal to an aggregate of $5.5 million and $4.8
million, respectively, together with interest at the rate of 7% per annum,
compounded annually, at any time during the eleven-month period beginning in
March 2003 and ending February 2004.

EFFECT OF CERTAIN PROVISIONS OF E-LOAN'S RESTATED CERTIFICATE OF INCORPORATION
AND BYLAWS, AND THE DELAWARE ANTITAKEOVER STATUE

     Certain provisions of E-LOAN's Restated Certificate of Incorporation and
Bylaws, which will become effective upon the closing of this offering, may have
the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from attempting to acquire, control of E-LOAN. These
provisions could limit the price that certain investors might be willing to pay
in the future for shares of E-LOAN's common stock. Certain of these provisions
allow E-LOAN to issue preferred stock without any vote or further action by the
stockholders, eliminate the right of stockholders to act by written consent
without a meeting and eliminate cumulative voting in the election of directors.
These provisions may make it more difficult for stockholders to take certain
corporate actions and could have the effect of delaying or preventing a change
in control of E-LOAN. In addition, E-LOAN is bound by Section 203 of the
Delaware General Corporation Law which, subject to certain exceptions, prohibits
a Delaware corporation from engaging in any business combination with any
interested stockholder, unless:

     - the Board of Directors of the corporation previously approved either the
       business combination or the transaction which resulted in the stockholder
       becoming an interested stockholder;

     - upon consummation of the transaction which resulted in the stockholder
       becoming an interested stockholder, the interested stockholder owned at
       least 85% of the voting stock of the corporation outstanding at the time
       the transaction commenced, excluding for purposes of determining the
       number of shares outstanding (a) shares owned by persons who are
       directors and also officers, and (b) shares owned by employee stock plans
       in which employee participants do not have the right to determine
       confidentially whether shares under the plan will be tendered in a tender
       or exchange offer; or

     - on that date or subsequently, the business combination is approved by the
       Board of Directors and authorized at an annual or special meeting of
       stockholders, and not by written consent, by the affirmative vote of at
       least 66 2/3% of the outstanding voting stock which is not owned by the
       interested stockholder.

     E-LOAN's Restated Certificate of Incorporation provides that, upon the
closing of this offering, the Board of Directors will be divided into three
classes of directors with each class serving a staggered three-year term. The
classification system of electing directors may tend to discourage a third party
from making a tender offer or otherwise attempting to obtain control of E-LOAN
and may maintain the incumbency of the Board of Directors, as the classification
of the Board of Directors generally increases the difficulty of replacing a
majority of the directors. E-LOAN's Bylaws eliminate the right of stockholders
to call special meetings of stockholders. The authorization of undesignated
preferred stock makes it possible for the Board of Directors to

                                       68
<PAGE>   72

issue preferred stock with voting or other rights or preferences that could
impede the success of any attempt to change control of E-LOAN. These and other
provisions may have the effect of deferring hostile takeovers or delaying
changes in control or management of E-LOAN. The amendment of any of these
provisions would require approval by holders of at least 66 2/3% of the
outstanding common stock.

TRANSFER AGENT AND REGISTRAR

     The transfer agent and registrar for the common stock is Chase Mellon
Shareholder Services.

                                       69
<PAGE>   73

                        SHARES AVAILABLE FOR FUTURE SALE

     Prior to this offering there has been no public market for E-LOAN's common
stock. Future sales of substantial amounts of E-LOAN's common stock in the
public market or the availability of such shares for sale, could adversely
affect the prevailing market price and the ability of E-LOAN to raise equity
capital in the future.

     Upon the closing of this offering, E-LOAN will have an aggregate of
38,482,403 shares of common stock outstanding, assuming no exercise of the
underwriters' over-allotment option and no exercise of outstanding options to
purchase common stock.

     Of the 38,482,403 shares of common stock to be outstanding upon the closing
of this offering, the 3,500,000 shares offered hereby will be eligible for
immediate sale in the public market without restriction, unless the shares are
purchased by "affiliates" of E-LOAN within the meaning of Rule 144 promulgated
under the Securities Act of 1933. The remaining 34,982,403 shares of common
stock held by existing stockholders upon the closing of this offering will be
"restricted securities", as that term is defined in Rule 144. Restricted
securities may be sold in the public market only if registered or if they
qualify for an exemption from registration under Rules 144, 144(k) or 701 under
the Securities Act. All of the holders of these "restricted securities,"
including officers and directors of E-LOAN, have entered into "lock-up
agreements" providing that they will not sell, directly or indirectly, any
common stock without the prior consent of the representatives of Goldman, Sachs
& Co. for a period of 180 days from the date of this prospectus. Subject to the
provisions of Rules 144, 144(k) and 701, 32,235,684 shares will be available for
sale in the public market, subject in the case of shares held by affiliates to
compliance with certain volume restrictions, upon expiration of this 180-day
period.

     In general, under Rule 144, a person or persons whose shares are
aggregated, including an affiliate who has beneficially owned shares for at
least one year, is entitled to sell within any three-month period a number of
shares that does not exceed the greater of 1% of the outstanding shares of
common stock, or the average weekly trading volume of the common stock during
the four calendar weeks preceding the date on which notice of such sale is
filed, subject to certain restrictions. In addition, a person who is not deemed
to have been an affiliate of E-LOAN at any time during the three months
preceding a sale, and who has beneficially owned the shares proposed to be sold
for at least two years would be entitled to sell such shares under Rule 144(k)
without regard to the requirements described above. To the extent that shares
were purchased from an affiliate of E-LOAN, the purchasers' holding period for
the purpose of effecting a sale under Rule 144 commences on the date of purchase
from the affiliate. As of March 31, 1999, there were outstanding options to
purchase 5,739,432 shares of common stock which will be eligible for sale in the
public market from time to time subject to vesting and the expiration of lock-up
agreements. As of March 31, 1999, there was outstanding a warrant to purchase
15,000 shares of Series C preferred stock convertible into 45,000 shares of
common stock upon the effectiveness of this offering and a warrant to purchase
53,996 shares of Series D preferred stock convertible into 161,988 shares of
common stock upon the effectiveness of this offering. The 206,988 shares of
common stock that will be issuable upon exercise of these warrants will be
eligible for sale in the public market from time to time subject to the
expiration of lock-up agreements and Rule 144. The possible sale of a
significant number of shares by the holders thereof may have an adverse effect
on the price of the common stock.

     E-LOAN is unable to estimate the number of shares that will be sold under
Rule 144, as this will depend on the market price for the common stock of
E-LOAN, the personal circumstances of the sellers and other factors. Prior to
this offering, there has been no public market for the common stock, and there
can be no assurance that a significant public market for the common stock will
develop or be sustained after this offering. Any future sale of substantial
amounts of common stock in the open market may adversely affect the market price
of the common stock offered hereby.

     E-LOAN will file a registration statement on Form S-8 under the Securities
Act to register the shares of common stock reserved for issuance under its 1997
Stock Option Plan and 1999

                                       70
<PAGE>   74

Employee Stock Purchase Plan. As a result, shares issued upon exercise of stock
options granted under the Stock Option Plan will be available, subject to
special rules for affiliates, for resale in the public market after the
effective date of such registration statement. See "Management -- Stock Plans".

     Pursuant to an Investor Rights Agreement among E-LOAN and certain holders
of E-LOAN's securities, after the closing of this offering, subject to certain
conditions, the holders of 17,842,395 shares of outstanding common stock,
including shares issuable upon the exercise of certain warrants to purchase
common stock, will be entitled to certain demand and piggyback registration
rights. Registration of such shares under the Securities Act would result in
such shares becoming freely tradable without restriction under the Securities
Act, except for shares purchased by Affiliates. Please see "Description of
Capital Stock -- Registration Rights".

                                 LEGAL MATTERS

     The validity of the common stock to be issued in this offering will be
passed upon for E-LOAN by Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto,
California. Certain legal matters will be passed upon for the Underwriters by
Venture Law Group, A Professional Corporation, Menlo Park, California. As of the
date of this prospectus, WS Investment Company 96B and WS Investment Company
97B, investment partnerships composed of certain current and former members of
and persons associated with Wilson Sonsini Goodrich & Rosati, P.C., and Mario M.
Rosati, a member of Wilson Sonsini Goodrich & Rosati, P.C., beneficially own an
aggregate of 166,878 shares of E-LOAN's common stock.

                                    EXPERTS

     The financial statements of E-LOAN as of December 31, 1997 and 1998 and for
each of the three years in the period ended December 31, 1998 included in this
Prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in accounting and auditing.

                             AVAILABLE INFORMATION

     E-LOAN has filed with the Securities and Exchange Commission, a
Registration Statement on Form S-1, including the exhibits and schedules
thereto, under the Securities Act with respect to the shares to be sold in this
offering. This prospectus does not contain all the information set forth in the
Registration Statement. For further information with respect to E-LOAN and the
shares to be sold in this offering, reference is made to the Registration
Statement. Statements contained in this prospectus as to the contents of any
contract, agreement or other document referred to, are not necessarily complete,
and in each instance reference is made to the copy of the contract, agreement or
other document filed as an exhibit to the Registration Statement, each statement
being qualified in all respects by such reference.

     You may read and copy all or any portion of the Registration Statement or
any reports, statements or other information E-LOAN files with the Commission at
the Commission's public reference room at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.C., Washington, D.C. 20549 and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, New York
10048 and the Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. You can request copies of these documents upon payment
of a duplicating fee, by writing to the Commission. Please call the Commission
at 1-800-SEC-0330 for further information on the operation of the public
reference rooms. E-LOAN's Commission filings, including the Registration
Statement will also be available to you on the Commission's Internet site. The
address of this site is http://www.sec.gov.

     E-LOAN intends to send to its stockholders annual reports containing
audited financial statements for each fiscal year and quarterly reports
containing unaudited financial statements for the first three quarters of each
fiscal year.

                                       71
<PAGE>   75

                         INDEX TO FINANCIAL STATEMENTS

                                    CONTENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
  Report of Independent Accountants.........................  F-2
  Balance Sheets at December 31, 1997, 1998 and March 31,
     1999 (unaudited).......................................  F-3
  Statements of Operations for the years ended December 31,
     1996, 1997 and 1998 and the three months ended March
     31, 1998 and 1999 (unaudited)..........................  F-4
  Statements of Stockholders' Deficit for the years ended
     December 31, 1996, 1997 and 1998 and the three months
     ended March 31, 1999 (unaudited).......................  F-5
  Statements of Cash Flows for the years ended December 31,
     1996, 1997 and 1998 and the three months ended March
     31, 1998 and 1999 (unaudited)..........................  F-6
  Notes to Financial Statements.............................  F-7
</TABLE>

                                       F-1
<PAGE>   76

                       REPORT OF INDEPENDENT ACCOUNTANTS

March 24, 1999

To the Stockholders and Board of Directors of E-Loan, Inc.

     In our opinion, the accompanying balance sheets and the related statements
of operations, stockholders' deficit and cash flows present fairly, in all
material respects, the financial position of E-Loan, Inc. (the Company) at
December 31, 1998 and 1997, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP
San Francisco, California

                                       F-2
<PAGE>   77

                                  E-LOAN, INC.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                                          PRO FORMA
                                                                                                        STOCKHOLDERS'
                                                                   DECEMBER 31,                           EQUITY AT
                                                            --------------------------    MARCH 31,       MARCH 31,
                                                               1997           1998           1999           1999
ASSETS                                                      -----------   ------------   ------------   -------------
                                                                                         (UNAUDITED)     (UNAUDITED)
<S>                                                         <C>           <C>            <C>            <C>
CURRENT ASSETS:
Cash and cash equivalents.................................  $ 4,217,687   $  9,141,367   $  3,565,219   $  4,065,219
Mortgage loans held-for-sale..............................           --     42,153,648     63,729,190
Accounts receivable, net..................................       33,924        411,058        241,186
Prepaids and other current assets.........................      168,577        720,681      2,247,370
                                                            -----------   ------------   ------------   ------------
      Total current assets................................    4,420,188     52,426,754     69,782,965     70,282,965
Furniture and equipment, net..............................      146,207      2,365,564      2,543,980
Deposits and other assets.................................      113,480        730,938        635,264
                                                            -----------   ------------   ------------   ------------
      Total assets........................................  $ 4,679,875   $ 55,523,256   $ 72,962,209   $ 73,462,209
                                                            ===========   ============   ============   ============
LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED
  STOCK AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Warehouse lines payable...................................  $        --   $ 41,046,122   $ 60,255,860
Accounts payable, accrued expenses and other..............      518,186      2,654,623      4,755,336
Capital lease obligation..................................           --        252,475        252,475
Notes payable.............................................       78,868         71,299        142,889
                                                            -----------   ------------   ------------   ------------
      Total current liabilities...........................      597,054     44,024,519     65,406,560
Capital lease obligations.................................           --        719,294        686,215
Notes payable.............................................           --        570,393        614,295
                                                            -----------   ------------   ------------   ------------
                                                                597,054     45,314,206     66,707,070
                                                            -----------   ------------   ------------   ------------
MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK:
  Series C, 4,467,912 shares authorized; 4,069,936,
    4,069,936 and 4,269,936 (unaudited) shares issued and
    outstanding at December 31, 1997, 1998 and March 31,
    1999 (unaudited) (aggregate liquidation preference
    $4,997,998 and $5,245,702 at December 31, 1997 and
    1998 and March 31, 1999 (unaudited))..................    5,048,716      5,525,904      6,134,996
  Series C-1, 4,467,912 shares authorized; 0 shares issued
    and outstanding (liquidation preference $1.22852 per
    share)................................................           --             --
  Series D, 1,950,000 shares authorized; 1,662,529 and
    1,702,529 (unaudited) shares issued and outstanding at
    December 31, 1998 and March 31, 1999 (unaudited)
    (aggregate liquidation preference $15,400,006 and
    $15,770,526 at December 31, 1998 and March 31, 1999
    (unaudited))..........................................           --     15,867,098     16,625,127             --
                                                            -----------   ------------   ------------   ------------
COMMITMENTS AND CONTINGENCIES (NOTE 10)
STOCKHOLDERS' DEFICIT:
Convertible preferred stock:
  Series A, 428,635 shares authorized; 428,635 shares
    issued and outstanding (aggregate liquidation
    preference $94,300)...................................       90,901         90,901         90,901             --
  Series B, 450,708 shares authorized; 430,207 shares
    issued and outstanding (aggregate liquidation
    preference $412,999)..................................      411,482        411,482        411,482             --
Common stock, 20,000,000 and 50,000,000 (unaudited) shares
  authorized at December 31, 1997 and 1998, and March 31,
  1999; 12,255,000, 12,524,010 and 12,742,974 (unaudited)
  shares issued and outstanding at December 31, 1997 and
  1998 and March 31, 1999; 70,000,000 shares authorized;
  33,398,883 shares issued and outstanding on a pro forma
  basis (unaudited).......................................        4,085         26,867         50,108     23,812,614
Less: subscription receivable.............................       (4,085)        (4,085)        (4,085)        (4,085)
Unearned compensation.....................................           --     (4,477,000)   (34,488,000)   (34,488,000)
Additional paid-in capital................................      (41,667)     5,366,548     41,414,356     41,414,356
Accumulated deficit.......................................   (1,426,611)   (12,598,665)   (23,979,746)   (23,979,746)
                                                            -----------   ------------   ------------   ------------
      Total stockholders' equity (deficit)................     (965,895)   (11,183,952)   (16,504,984)     6,755,139
                                                            -----------   ------------   ------------   ------------
      Total liabilities, mandatorily redeemable
        convertible preferred stock and stockholders'
        deficit...........................................  $ 4,679,875   $ 55,523,256   $ 72,962,209   $ 73,462,209
                                                            ===========   ============   ============   ============
</TABLE>

The accompanying notes are an integral part of these financial statements.
                                       F-3
<PAGE>   78

                                  E-LOAN, INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                   THREE MONTHS ENDED
                                            YEARS ENDED DECEMBER 31,                   MARCH 31,
                                    ----------------------------------------   --------------------------
                                       1996          1997           1998          1998           1999
                                    -----------   -----------   ------------   -----------   ------------
                                                                                      (UNAUDITED)
<S>                                 <C>           <C>           <C>            <C>           <C>
Revenues (Note 13)................  $   892,995   $ 1,042,729   $  6,831,546   $   526,597   $  4,801,641
Operating expenses:
  Operations......................      902,736     1,318,342      7,626,413       779,167      4,103,795
  Sales and marketing.............           --       470,323      5,642,394       513,044      3,656,761
  Technology......................           --       102,074      1,247,528       163,080        481,363
  General and administrative......       96,865       524,076      2,409,591       378,795      1,422,916
  Amortization of unearned
    compensation..................           --            --      1,251,000        44,000      6,554,000
                                    -----------   -----------   ------------   -----------   ------------
         Total operating
           expenses...............      999,601     2,414,815     18,176,926     1,878,086     16,218,835
                                    -----------   -----------   ------------   -----------   ------------
    Loss from operations..........     (106,606)   (1,372,086)   (11,345,380)   (1,351,489)   (11,417,194)
Other income, net.................       (3,438)       (2,407)       173,326        20,536         36,113
                                    -----------   -----------   ------------   -----------   ------------
         Net loss.................  $  (110,044)  $(1,374,493)  $(11,172,054)  $(1,330,953)  $(11,381,081)
                                    ===========   ===========   ============   ===========   ============
Net loss per share:
  Basic and diluted...............  $     (0.01)  $     (0.12)  $      (0.98)  $     (0.12)  $      (0.94)
                                    ===========   ===========   ============   ===========   ============
  Weighted-average shares --
    basic.........................   12,255,000    12,262,032     12,400,284    12,323,258     12,598,378
                                    ===========   ===========   ============   ===========   ============
Pro forma net loss per share
  (unaudited):
  Basic and diluted...............                              $      (0.41)  $     (0.06)  $      (0.34)
                                                                ============   ===========   ============
  Weighted-average shares --
    basic.........................                                27,153,122    22,743,817     33,100,579
                                                                ============   ===========   ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       F-4
<PAGE>   79

                                  E-LOAN, INC.

                      STATEMENTS OF STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
                                        SERIES A             SERIES B
                                     PREFERRED STOCK     PREFERRED STOCK        COMMON STOCK
                                    -----------------   ------------------   -------------------   SUBSCRIPTION     UNEARNED
                                    SHARES    AMOUNT    SHARES     AMOUNT     SHARES     AMOUNT     RECEIVABLE    COMPENSATION
                                    -------   -------   -------   --------   ---------   -------   ------------   ------------
<S>                                 <C>       <C>       <C>       <C>        <C>         <C>       <C>            <C>
Balance at December 31, 1995......       --   $    --        --   $     --   12,255,000  $ 4,085   $     (4,085)  $         --
Net loss..........................
                                    -------   -------   -------   --------   ---------   -------   ------------   ------------
Balance at December 31, 1996......       --   $    --        --   $     --   12,255,000  $ 4,085   $     (4,085)  $         --
Series A preferred stock issued
 for cash, net of issuance costs
 of $3,399 at $0.22 per share in
 June 1997........................  428,635   $90,901
Series B preferred stock issued
 for cash, net of issuance costs
 of $1,517 at $0.96 per share in
 December 1997....................                      430,207    411,482
Accretion for preferred stock
 Series C.........................
Net loss..........................
                                    -------   -------   -------   --------   ---------   -------   ------------   ------------
Balance at December 31, 1997......  428,635   $90,901   430,207   $411,482   12,255,000  $ 4,085   $     (4,085)  $
Common Stock issued for cash......                                             136,488    20,027
Common Stock issued for cash upon
 exercise of stock options........                                             132,522     2,755
Accretion for preferred stock
 Series C.........................
Accretion for preferred stock
 Series D.........................
Issuance of warrants for capital
 lease............................
Issuance of warrants in relation
 to marketing agreements..........
Issuance of stock options for
 services rendered................
Unearned Compensation.............                                                                                  (4,477,000)
Net Loss..........................
                                    -------   -------   -------   --------   ---------   -------   ------------   ------------
Balance at December 31, 1998......  428,635   $90,901   430,207   $411,482   12,524,010  $26,867   $     (4,085)  $ (4,477,000)
Common stock issued for cash upon
 exercise of stock options
 (unaudited)......................                                             218,964    23,241
Accretion for preferred stock
 Series C (unaudited).............
Accretion for preferred stock
 Series D (unaudited).............
Unearned Compensation
 (unaudited)......................                                                                                 (30,011,000)
Net Loss (unaudited)..............
                                    -------   -------   -------   --------   ---------   -------   ------------   ------------
Balance at March 31, 1999
 (unaudited)......................  428,635   $90,901   430,207   $411,482   12,742,974  $50,108   $     (4,085)  $(34,488,000)
The accompanying notes are an integral part of these financial statements.

<CAPTION>

                                    ADDITIONAL                       TOTAL
                                       PAID       ACCUMULATED    STOCKHOLDERS'
                                    IN CAPITAL      DEFICIT         DEFICIT
                                    -----------   ------------   -------------
<S>                                 <C>           <C>            <C>
Balance at December 31, 1995......  $        --   $     57,926   $     57,926
Net loss..........................                    (110,044)      (110,044)
                                    -----------   ------------   ------------
Balance at December 31, 1996......  $        --   $    (52,118)  $    (52,118)
Series A preferred stock issued
 for cash, net of issuance costs
 of $3,399 at $0.22 per share in
 June 1997........................                                     90,901
Series B preferred stock issued
 for cash, net of issuance costs
 of $1,517 at $0.96 per share in
 December 1997....................                                    411,482
Accretion for preferred stock
 Series C.........................      (41,667)                      (41,667)
Net loss..........................                  (1,374,493)    (1,374,493)
                                    -----------   ------------   ------------
Balance at December 31, 1997......  $   (41,667)  $ (1,426,611)  $   (965,895)
Common Stock issued for cash......                                     20,027
Common Stock issued for cash upon
 exercise of stock options........                                      2,755
Accretion for preferred stock
 Series C.........................     (500,000)                     (500,000)
Accretion for preferred stock
 Series D.........................     (513,352)                     (513,352)
Issuance of warrants for capital
 lease............................       29,575                        29,575
Issuance of warrants in relation
 to marketing agreements..........      640,150                       640,150
Issuance of stock options for
 services rendered................       23,842                        23,842
Unearned Compensation.............    5,728,000                     1,251,000
Net Loss..........................                 (11,172,054)   (11,172,054)
                                    -----------   ------------   ------------
Balance at December 31, 1998......  $ 5,366,548   $(12,598,665)  $(11,183,952)
Common stock issued for cash upon
 exercise of stock options
 (unaudited)......................                                     23,241
Accretion for preferred stock
 Series C (unaudited).............     (129,095)                     (129,095)
Accretion for preferred stock
 Series D (unaudited).............     (388,097)                     (388,097)
Unearned Compensation
 (unaudited)......................   36,565,000                     6,554,000
Net Loss (unaudited)..............                 (11,381,081)   (11,381,081)
                                    -----------   ------------   ------------
Balance at March 31, 1999
 (unaudited)......................  $41,414,356   $(23,979,746)  $(16,504,984)
The accompanying notes are an inte
</TABLE>

                                       F-5
<PAGE>   80

                                  E-LOAN, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                 THREE MONTHS ENDED
                                                         YEARS ENDED DECEMBER 31,                     MARCH 31,
                                                  ---------------------------------------    ---------------------------
                                                    1996         1997           1998            1998           1999
                                                  ---------   -----------   -------------    -----------   -------------
                                                                                                     (UNAUDITED)
<S>                                               <C>         <C>           <C>              <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss........................................  $(110,044)  $(1,374,493)  $ (11,172,054)   $(1,330,953)  $ (11,381,081)
Adjustments to reconcile net loss to cash used
  in operating activities:
  Amortization of unearned compensation.........         --            --       1,251,000         44,000       6,554,000
  Depreciation and amortization.................         --         6,860         512,998         29,417         210,900
  Loss on disposal of furniture and equipment...         --        37,361          41,092             --              --
  Changes in operating assets and liabilities:
    Accounts receivable.........................     (3,300)      (30,624)       (377,134)        (1,501)        169,872
    Net change in mortgage loans
      held-for-sale.............................         --            --     (42,153,648)            --     (21,575,542)
    Prepaids, deposits and other assets.........      2,862      (276,960)       (641,899)        46,572      (1,431,259)
    Accounts payable, accrued expenses and
      other.....................................     33,668       474,583       2,136,437       (265,626)      2,101,472
                                                  ---------   -----------   -------------    -----------   -------------
        Net cash used in operating activities...    (76,814)   (1,163,273)    (50,403,208)    (1,478,091)    (25,351,638)
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of furniture and equipment..........     (4,557)     (160,775)     (1,608,899)      (156,334)       (389,316)
                                                  ---------   -----------   -------------    -----------   -------------
        Net cash used in investing activities...     (4,557)     (160,775)     (1,608,899)      (156,334)       (389,316)
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock........         --            --          22,782         21,606          23,241
  Payments on obligations under capital
    leases......................................         --            --         (26,875)            --         (33,078)
  Proceeds from notes payable...................     33,565        32,303         641,692             --         115,493
  Repayments of notes payable...................                                  (78,868)       (78,868)             --
  Proceeds from warehouse lines payable.........         --            --     241,242,483             --     270,045,646
  Repayments of warehouse lines payable.........         --            --    (200,196,361)            --    (250,835,908)
  Proceeds from issuance of preferred stock,
    net.........................................         --     5,509,432      15,330,934             --         849,412
                                                  ---------   -----------   -------------    -----------   -------------
        Net cash provided by financing
          activities............................     33,565     5,541,735      56,935,787        (57,262)     20,164,806
                                                  ---------   -----------   -------------    -----------   -------------
  Net increase (decrease) in cash...............    (47,806)    4,217,687       4,923,680     (1,691,687)     (5,576,148)
  Cash and cash equivalents at beginning of
    period......................................     47,806            --       4,217,687      4,217,687       9,141,367
                                                  ---------   -----------   -------------    -----------   -------------
  Cash and cash equivalents at end of period....  $      --   $ 4,217,687   $   9,141,367    $ 2,526,000   $   3,565,219
                                                  =========   ===========   =============    ===========   =============
  SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest......................  $   1,124   $     7,036   $     588,987    $     5,356   $     814,413
                                                  =========   ===========   =============    ===========   =============
  NONCASH INVESTING AND FINANCING ACTIVITIES:
    Furniture and equipment under capital
      leases....................................  $      --   $        --   $     998,642    $   499,610   $          --
                                                  =========   ===========   =============    ===========   =============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       F-6
<PAGE>   81

                                  E-LOAN, INC.

                         NOTES TO FINANCIAL STATEMENTS

 1. THE COMPANY

     E-Loan, Inc. (the Company) was incorporated on August 26, 1996 and began
marketing its services in June 1997. Prior to that date, the Company conducted
business through a predecessor company, Palo Alto Funding Group (PAFG) which was
established in 1992 as a mortgage broker. The stockholders of PAFG and the
Company were the same and on December 18, 1997 PAFG merged with the Company. The
transaction was accounted for in a manner similar to a pooling of interests and,
as a result, the accompanying financial statements represent the combined
balance sheets and results of operations of the Company and PAFG.

     The Company is a provider of mortgage offerings online and is engaged in
the brokerage, origination, and sale of mortgage loans collateralized by
residential real estate. The Company serves U.S. consumers in the first and
second home mortgage loan market over the internet.

 2. BASIS OF PRESENTATION

     The Company has sustained net losses and negative cash flows from
operations since its inception. The Company's ability to meet its obligations in
the ordinary course of business is dependent upon its ability to establish
profitable operations or raise additional financing through public or private
equity financings, collaborative or other arrangements with corporate sources,
or other sources of financing to fund operations. However, there can be no
assurance that the Company will be able to achieve profitable operations.
Management believes that its current funds and available lines of credit will be
sufficient to enable the Company to meet its planned expenditures through at
least December 31, 1999.

 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

     UNAUDITED INTERIM RESULTS

     The accompanying interim financial statements as of March 31, 1999, and for
the three months ended March 31, 1998 and 1999, are unaudited. The unaudited
interim financial statements have been prepared on the same basis as the annual
financial statements and, in the opinion of management, reflect all adjustments,
which include only normal recurring adjustments, necessary to present fairly the
Company's financial position, results of operations and cash flows as of March
31, 1999 and for the three months ended March 31, 1998 and 1999. The financial
data and other information disclosed in these notes to financial statements
related to these periods are unaudited. The results for the three months ended
March 31, 1999 are not necessarily indicative of the results to be expected for
the year ending December 31, 1999.

     RISKS AND UNCERTAINTIES

     The Company has a limited operating history and its prospects are subject
to the risks, expenses and uncertainties frequently encountered by companies in
the new and rapidly evolving markets for internet products and services. These
risks include the failure to develop and extend the Company's online service
brands, the rejection of the Company's services by consumers,

                                       F-7
<PAGE>   82
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

vendors and/or advertisers, the inability of the Company to maintain and
increase the levels of traffic on its online services, as well as other risks
and uncertainties.

     Additionally, in the normal course of business, companies in the mortgage
banking industry encounter certain economic and regulatory risks. Economic risks
include interest rate risk, credit risk and market risk. The Company is subject
to interest rate risk to the extent that in a rising interest rate environment,
the Company will generally experience a decrease in loan production which may
negatively impact the Company's operations. Credit risk is the risk of default,
primarily in the Company's mortgage loan portfolio that result from the
mortgagors' inability or unwillingness to make contractually required payments.
Market risk reflects changes in the value of mortgage loans held-for-sale and in
commitments to originate loans.

     The Company sells loans to mortgage loan purchasers on a servicing released
basis without recourse. As such, the risk of loss or default by the borrower has
been assumed by these purchasers. However, the Company is usually required by
these purchasers to make certain representations relating to credit information,
loan documentation and collateral. To the extent that the Company does not
comply with such representations, or there are early payment defaults, the
Company may be required to repurchase the loans and indemnify these purchasers
for any losses from borrower defaults. For the year ended December 31, 1998 and
the three months ended March 31, 1999 (unaudited), the Company had not
repurchased any loans.

     CASH AND CASH EQUIVALENTS

     The Company considers all highly liquid monetary instruments with an
original maturity of three months or less from the date of purchase to be cash
equivalents.

     MORTGAGE LOANS HELD-FOR-SALE

     Mortgage loans held-for-sale consist of residential property mortgages
having maturities up to 30 years. Pursuant to the mortgage terms, the borrowers
have pledged the underlying real estate as collateral for the loans. It is the
Company's practice to sell these loans to mortgage loan purchasers shortly after
they are funded. Mortgage loans held-for-sale are recorded at the lower of cost
or aggregate market value. Cost generally consists of loan principal balance
adjusted for net deferred fees and costs. No valuation adjustment was required
at December 31, 1998 or March 31, 1999.

     FURNITURE AND EQUIPMENT

     Furniture and equipment, including furniture and equipment under capital
leases, are recorded at cost and depreciated using the straight-line method over
their useful lives, which is generally three years for computers and five years
for furniture and fixtures. Assets under capital leases are depreciated over the
shorter of the useful life of the asset or the term of the lease. Leasehold
improvements are amortized over the remaining life of the lease. Maintenance and
repairs are charged to expense as incurred, and improvements and betterments are
capitalized. When assets are retired or otherwise disposed of, the cost and
accumulated depreciation are removed from the accounts and any resulting gain or
loss is reflected in operations in the period realized.

     BROKERAGE FEES

     Brokerage fees represent compensation earned for the processing of mortgage
loan applications for third party lenders. The Company does not take title to
the mortgages and the

                                       F-8
<PAGE>   83
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

funding for these customers is provided by third party lenders. The fees for
providing these services are recognized at such time as the loans are funded by
the lender.

     GAIN ON SALE OF LOANS

     Gain on sale of loans includes gains or losses determined by loan sales
proceeds less the carrying value of the loans sold. Origination fees, net of
certain direct origination costs, are deferred and recognized when the loan is
sold. The carrying value of the loan is adjusted for the deferred origination
fees and costs. Gain on sale of loans are recognized at the time of settlement
with the mortgage loan purchaser.

     INTEREST INCOME ON LOANS

     Interest income is accrued as earned. Loans are placed on non-accrual
status when any portion of principal or interest is ninety days past due or
earlier when concern exists as to the ultimate collectibility of principal or
interest. Loans return to accrual status when principal and interest become
current and are anticipated to be fully collectible.

     ADVERTISING COSTS

     Advertising costs related to various media content advertising such as
television, radio, and print are charged to other operating expenses as
incurred. These costs include the cost of production as well as the cost of any
airtime.

     INCOME TAXES

     The Company accounts for income taxes using the liability method in
accordance with Statement of Financial Accounting Standards (SFAS) No. 109,
Accounting for Income Taxes. Under this method, deferred tax liabilities and
assets are determined based on the difference between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for
the year in which the differences are expected to reverse. Valuation allowances
are established when necessary to reduce deferred tax assets to the amounts
expected to be realized. The provision for income tax expense represents taxes
payable for the current period, plus the net change in deferred tax assets and
liabilities.

     STOCK-BASED COMPENSATION

     The Company accounts for stock-based employee compensation arrangements in
accordance with provisions of Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, and complies with the disclosure
provision of SFAS No. 123, Accounting for Stock-Based Compensation. Under APB
No. 25, compensation expense is based on the excess of the estimated fair value
of the Company's stock over the exercise price, if any, on the date of the
grant.

     NET INCOME (LOSS) PER SHARE

     The Company computes net loss per share in accordance with SFAS No. 128,
Earnings per Share. Under the provisions of SFAS No. 128 basic net loss per
share is computed by dividing the net loss available to common stockholders for
the period by the weighted average number of common shares outstanding during
the period. Diluted net loss per share is computed by dividing the net loss
available to common stockholders for the period by the weighted average number
of common and common equivalent shares outstanding during the period, to the
extent such

                                       F-9
<PAGE>   84
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

common equivalent shares are dilutive. Common equivalent shares are composed of
incremental common shares issuable upon the exercise of stock options and
warrants and upon conversion of Series A, B, C and Series D convertible
preferred stock.

     The following table sets forth the computation of basic and diluted net
loss per share for the periods indicated:

<TABLE>
<CAPTION>
                                          YEARS ENDED                      THREE MONTHS ENDED
                                          DECEMBER 31,                         MARCH 31,
                            ----------------------------------------   --------------------------
                               1996          1997           1998          1998           1999
                            -----------   -----------   ------------   -----------   ------------
                                                                              (UNAUDITED)
<S>                         <C>           <C>           <C>            <C>           <C>
Numerator:
  Net loss................  $  (110,044)  $(1,374,493)  $(11,172,054)  $(1,330,953)  $(11,381,081)
  Accretion of Series C
    and D mandatorily
    redeemable convertible
    preferred stock to
    redemption value......           --       (41,667)    (1,013,352)     (125,000)      (517,192)
                            -----------   -----------   ------------   -----------   ------------
         Net loss
           available to
           common
           shareholders...  $  (110,044)  $(1,416,160)  $(12,185,406)  $(1,455,953)  $(11,898,273)
                            ===========   ===========   ============   ===========   ============
Denominator:
  Weighted average common
    shares -- basic and
    diluted...............   12,255,000    12,262,032     12,400,284    12,323,258     12,598,378
                            -----------   -----------   ------------   -----------   ------------
Net loss per share:
  Basic and diluted.......  $     (0.01)  $     (0.12)  $      (0.98)  $     (0.12)  $      (0.94)
                            ===========   ===========   ============   ===========   ============
</TABLE>

     PRO FORMA NET LOSS PER SHARE (UNAUDITED)

     Pro forma net loss per share for the year ended December 31, 1998 and the
three months ended March 31, 1998 and 1999 is computed using the weighted
average number of common shares outstanding, including the pro forma effects of
the automatic conversion of the Company's Series A and Series B convertible
preferred stock, Series C and Series D mandatorily redeemable preferred stock
and 53,996 warrants to purchase Series D preferred stock at $9.26 per share into
shares of the Company's Common Stock effective upon the closing of the Company's
initial public offering as if such conversion occurred on January 1, 1998, or at
date of original issuance, if later. Pro forma diluted net loss per share is
computed only using the pro forma weighted average number of common shares as
common stock equivalents are antidilutive.

     Effective upon the closing of the Company's proposed initial public
offering, the outstanding shares of Series A and Series B convertible preferred
stock, Series C and D mandatorily redeemable preferred stock and warrants to
purchase Series D preferred stock will automatically convert into 1,285,905,
1,290,621, 12,809,808, 5,107,587 and 161,988 shares, respectively, of Common
Stock (for a total of 20,655,909 shares). The pro forma effects of these
transactions are unaudited and have been reflected in the accompanying pro forma
balance sheet at March 31, 1999.

                                      F-10
<PAGE>   85
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

     COMPREHENSIVE INCOME

     The Company adopted SFAS No. 130, Reporting Comprehensive Income, during
1998. The Company classifies items of "other comprehensive income" by their
nature in a financial statement and displays the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of the balance sheet. To date the Company has not
had any transactions that are required to be reported in comprehensive income.

     SEGMENT REPORTING

     The FASB issued SFAS No. 131, Disclosure about Segments of an Enterprise
and Related Information. SFAS No. 131 establishes standards for the way public
business enterprises are to report information about operating segments in
annual financial statements and requires those enterprises to report selected
information about operating segments in interim financial reports. The Company
has determined that it does not have any separately reportable business
segments.

 4. SIGNIFICANT CUSTOMERS AND CONCENTRATIONS OF CREDIT RISK

     All cash deposits are held by two financial institutions and exceed
existing federal deposit insurance coverage limits at each institution.
Additionally, approximately 67% and 78% (unaudited) of all loans sold during the
year ended December 31, 1998 and the three months ended March 31, 1999 were sold
to one mortgage loan purchaser.

 5. MORTGAGE LOANS HELD-FOR-SALE

     The inventory of mortgage loans consists primarily of first trust deed
mortgages on residential properties located throughout the United States,
primarily concentrated in California. As of December 31, 1998 and March 31,
1999, the Company has net mortgage loans held-for-sale of $42,153,648 and
$63,729,190 (unaudited), all of which are on accrual basis. All mortgage loans
held-for-sale are pledged as collateral for borrowings at December 31, 1998 and
March 31, 1999 (see Note 8). There were no mortgage loans held-for-sale at
December 31, 1997.

 6. FURNITURE AND EQUIPMENT

     Furniture and equipment are recorded at cost and consist of the following:

<TABLE>
<CAPTION>
                                                   DECEMBER 31,
                                              ----------------------     MARCH 31,
                                                1997         1998          1999
                                              --------    ----------    -----------
                                                                        (UNAUDITED)
<S>                                           <C>         <C>           <C>
Computer equipment..........................  $133,295    $  929,486    $1,225,776
Furniture and fixtures......................    19,772       646,847       677,054
Equipment under capital leases..............        --       998,642       998,642
Leasehold improvements......................        --       144,541       186,456
                                              --------    ----------    ----------
                                               153,067     2,719,516     3,087,928
Accumulated depreciation and amortization...    (6,860)     (353,952)     (543,948)
                                              --------    ----------    ----------
                                              $146,207    $2,365,564    $2,543,980
                                              ========    ==========    ==========
</TABLE>

                                      F-11
<PAGE>   86
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

     Depreciation and amortization expense for the years ended December 31, 1997
and 1998 and three months ended March 31, 1999 was $6,860 and $347,092, $210,900
(unaudited), respectively.

     As of December 31, 1998 and March 31, 1999, accumulated amortization for
equipment under capital leases was $203,447 and $278,205 (unaudited). There was
no amortization for equipment under capital leases as of December 31, 1997. All
equipment under capital leases serves as collateral for the related lease
obligation (see Note 10).

 7. INCOME TAXES

     There was no benefit for income taxes for the years ended December 31,
1996, 1997 and 1998 and the three months ended March 31, 1999 due to the
Company's inability to recognize the benefit of net operating losses. At
December 31, 1998, the Company had net operating loss carryforwards of
approximately $10.0 million for both federal and state income tax purposes. At
March 31, 1999 the Company had net operating loss carryforwards of approximately
$14.0 million (unaudited) for both federal and state income tax purposes. The
federal carryforwards expire in the years 2011 through 2018. For federal and
state tax purposes, a portion of the Company's net operating loss may be subject
to certain limitations on annual utilization in case of changes in ownership, as
defined by federal and state tax laws.

     The primary components of temporary differences, which give rise to
deferred taxes are as follows:

<TABLE>
<CAPTION>
                                                           DECEMBER 31,          MARCH 31,
                                                     ------------------------   -----------
                                                       1997          1998          1999
                                                     ---------    -----------   -----------
                                                                                (UNAUDITED)
<S>                                                  <C>          <C>           <C>
Deferred tax assets:
  Net operating loss carryforwards.................  $ 441,756    $ 4,193,310   $ 5,647,521
  Other............................................     78,951        227,984       814,348
                                                     ---------    -----------   -----------
          Total deferred tax assets................    520,707      4,421,294     6,461,869
Valuation allowance................................   (520,707)    (4,245,551)   (6,461,869)
                                                     ---------    -----------   -----------
                                                     $      --    $        --   $        --
                                                     =========    ===========   ===========
</TABLE>

     Management evaluates the recoverability of the deferred tax asset and the
level of the valuation allowance. Due to the uncertainty surrounding the
realization of the favorable tax attributes in future tax returns, the Company
has recorded a valuation allowance against its net deferred tax asset at
December 31, 1997, 1998 and March 31, 1999 (unaudited). At such time as it is
determined that it is more likely than not that the deferred tax asset will be
realizable, the valuation allowance will be reduced.

 8. WAREHOUSE LINES PAYABLE

     As of December 31, 1998 and March 31, 1999, the Company had a warehouse
line of credit for borrowings up to $18.8 million, which includes a temporary
overdraft limit of $3.75 million, for interim financing of mortgage loans. The
interest rate charged on borrowings against the warehouse line of credit is
variable based on the commercial paper rate of the lender plus various
percentage rates. Borrowings are collateralized by the mortgage loans
held-for-sale. The line of credit which is uncommitted expires on June 30, 1999.
Upon expiration, management believes it will either renew its existing line or
obtain sufficient additional lines. At December 31,

                                      F-12
<PAGE>   87
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1998 and March 31, 1999 approximately $15.0 million and $19.9 million
(unaudited) was outstanding under this line. Either the Company or the Lender
can terminate the agreement at any time. On April 23, 1999 the amount of the
warehouse line of credit was increased to $25 million and the expiration date
was extended to April 20, 2000 (unaudited).

     This line of credit agreement generally requires the Company to comply with
various financial and non-financial covenants. The Company was not in compliance
with certain covenants contained in the credit agreement and has obtained a
waiver from the lender.

     Two of the Company's founding stockholders have provided guarantees for the
Company's obligations under this line of credit.

     Additionally, the Company has a commitment to finance up to $35.0 million
of mortgage loan inventory pending sale of these loans to the ultimate mortgage
loan purchasers. This additional loan inventory financing is secured by the
related mortgage loans. The interest rate charged is LIBOR plus 1.25%. Either
the Company or the lender can terminate the agreement at any time. At December
31, 1998 and March 31, 1999 approximately $26.1 million and $17.1 million
(unaudited), respectively was outstanding under this financial commitment. This
agreement includes various non-financial negative and affirmative covenants. The
Company was not in compliance with a covenant contained in the agreement and has
obtained a waiver from the lender.

     On May 21, 1999 the Company entered into an agreement with this lender for
a $100 million committed line of credit. In addition, after the closing of the
Company's initial public offering, the agreement is expanded to include another
$100 million of uncommitted funds. Interest accrues on these funds at 95 basis
points (.95%) over the monthly average LIBOR rate. The line expires May 20, 2000
(unaudited).

     Subsequent to year end, on January 15, 1999, the Company entered into a
warehouse line of credit agreement for borrowings of up to $40 million for
interim financing of mortgage loans. The interest rate charged on borrowings
against the line is equal to 185 basis points (1.85%) per annum over the Monthly
Average LIBOR Rate. The line of credit expires on January 26, 2000. Upon
expiration, management believes it will either renew its existing line or obtain
sufficient additional lines. At March 31, 1999, approximately $15 million
(unaudited) was outstanding under this line. Either the Company or the lender
can terminate the agreement at anytime.

     This line of credit agreement generally requires the Company to comply with
various financial and non-financial covenants. The Company was not in compliance
with certain covenants contained in the credit agreement and has obtained a
waiver from the lender (unaudited).

 9. NOTES PAYABLE

     In December 1998, the Company entered into two credit facilities in the
aggregate principal amount of $5,000,000 for working capital and equipment
financing. The first credit facility in the amount of $1,500,000 has an interest
rate of prime plus 0.50% and expires in December 1999. The second credit
facility is a $3,500,000 term loan with an interest rate of prime plus 0.50% and
expires in September 2002. At December 31, 1998 and March 31, 1999 $641,692 and
$757,185 (unaudited) was outstanding under these two credit facilities.

     These credit facilities require the Company to meet various financial
covenants. The Company was not in compliance with one of these covenants and has
obtained a waiver from the lender.

     During March 1999, the Company obtained a commitment of $5.0 million for a
revolving line of credit capital facility. The interest rate will be based on
the prime rate and the facility will
                                      F-13
<PAGE>   88
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

expire at the earlier of March 2000 or the closing of the Company's initial
public offering. Two of the Company's founding stockholders have provided
guarantees for the Company's obligation under this line of credit.

10. COMMITMENTS AND CONTINGENCIES

     LEASES

     The Company leases office space under an operating lease which provides for
renewal in October 2003. Rent expense under operating leases amounted to
$77,037, $107,652, $374,794 and $225,059 (unaudited) for the years ended
December 31, 1996, 1997 and 1998 and the three months ended March 31, 1999,
respectively.

     During April 1998, the Company entered into a 48-month capital lease for
equipment (see Note 6). The Company's lease obligations under capital and
operating leases are as follows:

<TABLE>
<CAPTION>
                 YEAR ENDING DECEMBER 31,                    CAPITAL      OPERATING
                 ------------------------                   ----------    ----------
<S>                                                         <C>           <C>
          1999............................................  $  300,408    $  532,580
          2000............................................     332,068       665,797
          2001............................................     332,068       686,336
          2002............................................     162,424       706,874
          2003............................................          --       603,325
                                                            ----------    ----------
          Total minimum lease payments....................   1,126,968    $3,194,912
                                                                          ==========
  Less amount representing interest.......................    (155,199)
                                                            ----------
  Present value of minimum lease payments.................     971,769
  Less current portion of capital lease obligations.......    (252,475)
                                                            ----------
  Long-term portion.......................................  $  719,294
                                                            ==========
</TABLE>

     Under the terms of the office lease, the Company maintains a $900,000
stand-by letter of credit in favor of the lessor. The Company has deposited
$255,000 as collateral for this letter of credit which is recorded as deposits
and other assets in the accompanying balance sheet.

     FACILITY LEASE (UNAUDITED)

     In March 1999, the Company entered into an amendment to the existing
facility lease for an additional 25,474 feet commencing June 1, 1999. The
amended lease expires November 30, 2004. In connection with the amendment, the
Company increased the letter of credit securing the facility to $1,250,000 and
released the $255,000 in collateral.

     FINANCIAL INSTRUMENT CONTINGENCIES

     At December 31, 1998 and March 31, 1999 (unaudited), the Company was party
to commitments to fund loans at interest rates previously agreed (locked) by
both the lender and the borrower for specified periods of time. Prior to
originating loans under these commitments, the Company evaluates each customer's
credit and collateral worthiness. The Company uses its best efforts to fund
these locked loans within the agreed-upon locked period. If the loan cannot be
funded within this period, or if the Company is unable to secure a rate lock
from the lender equal to or less than the rate lock extended to the borrower,
the Company will earn less revenue than it anticipated at the time it locked
with the borrower. At December 31, 1998 and March 31, 1999, the Company has
provided locks to originate loans amounting to approximately $99.1 million and
$52.2 Million (unaudited) (the "locked pipeline"). In addition, the Company

                                      F-14
<PAGE>   89
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

had commitments at December 31, 1998 and March 31, 1999, in its capacity as a
broker, amounting to approximately $45.0 million and $23.7 (unaudited).

     At December 31, 1998 and March 31, 1999, the Company has entered into
non-mandatory forward loan sale agreements, including commitments with lenders
for brokered loans, amounting to approximately $186.3 million and $139.6 million
(unaudited) (this includes the mortgage loans held-for-sale at December 31, 1998
and March 31, 1999, of approximately $42.2 million and $63.7 million
(unaudited)). The forward loan sale agreements do not subject the Company to
mandatory delivery and there is no penalty if the Company does not deliver into
the commitment. The Company is exposed to the risk that these counterparties may
be unable to meet the terms of these sale agreements. The investors are
well-established U.S financial institutions; the Company does not require
collateral to support these commitments, and there has been no failure on the
part of the counterparties to these agreements to date.

     LEGAL

     In the normal course of business, the Company is at times subject to
pending and threatened legal actions and proceedings. After reviewing pending
and threatened actions and proceedings with counsel, management believes that
the outcome of such actions or proceedings is not expected to have a material
adverse effect on the financial position or results of operation of the Company.

     MORTGAGE BANKERS' BLANKET BOND

     At December 31, 1998 and March 31, 1999, the Company carried a mortgage
bankers' blanket bond for $300,000 and carried errors and omissions insurance
coverage for $2,000,000. The premiums for the bond and insurance coverage are
paid through May 27, 1999 and January 9, 2000 (unaudited), respectively.

     MARKETING SERVICE AGREEMENTS

     The Company has entered into several marketing service agreements with
third parties. Under these agreements the third parties will display the
Company's logo and loan information on their internet websites and provide
related marketing services. The Company pays for these services in minimum
monthly and quarterly installments plus, in some cases, a per view charge for
each time the information is displayed. Future minimum payments under these
agreements are as follows:

<TABLE>
<CAPTION>
                YEAR ENDING DECEMBER 31,
                ------------------------
<S>                                                       <C>
          1999..........................................  $5,463,300
          2000..........................................   2,309,800
          2001..........................................     212,000
          Thereafter....................................          --
                                                          ----------
                                                          $7,985,100
                                                          ==========
</TABLE>

     Two of these marketing agreements are with a stockholder of the Company.
The Company has incurred approximately $1.04 million and $0.6 million
(unaudited) in marketing service expenses under these agreements with this
stockholder during the year ended December 31, 1998 and the three months ended
March 31, 1999. There were no such agreements as of December 31, 1996 and 1997.

                                      F-15
<PAGE>   90
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

11. STOCKHOLDERS' (DEFICIT) AND MANDATORILY REDEEMABLE PREFERRED STOCK

     COMMON AND CONVERTIBLE PREFERRED STOCK

     At December 31, 1998 and March 31, 1999, the Company was authorized to
issue 20,000,000 shares and 50,000,000 (unaudited) shares of common stock and
11,765,167 shares of preferred stock. The Company has designated 428,635 shares
of the authorized preferred stock as Series A preferred stock, 450,708 shares as
Series B preferred stock, 4,467,912 shares as Series C preferred stock,
4,467,912 shares as Series C-1 preferred stock and 1,950,000 shares as Series D
preferred stock.

     REDEMPTION

     Series A and B preferred stock are not redeemable.

     The Series C and C-1 preferred stock are redeemable at any time after
December 17, 2001 at the request of no less than 66.67% of the then outstanding
Series C and C-1 stockholders. The redemption price is equal to $1.22852 per
share plus 10% per annum on the amount payable plus all declared but unpaid
dividends. The redemption amounts are payable in three annual installments.

     The Series D preferred stock is redeemable at any time after September 4,
2002 at the request of no less than 66.67% of the then outstanding Series D
stockholders and subject to the consent of a majority of the Series C and C-1
preferred stockholders. The redemption price is equal to $9.263 per share plus
10% per annum on the amount payable plus all declared but unpaid dividends. The
redemption amounts are payable in three annual installments.

     LIQUIDATION PREFERENCE

     In the event of any liquidation, dissolution or winding up of the Company,
either voluntary or involuntary, the holders of preferred stock retain
liquidation preference over common stockholders. The liquidation amounts are
$0.22 per share of Series A, $0.96 per share of Series B, $1.22852 per share of
Series C, $1.22852 per share of Series C-1, and $9.263 per share of Series D
preferred stock.

     The remaining assets and funds of the Company available for distribution
shall be distributed ratably among all holders of Series C, Series C-1, and
Series D preferred stock and common stock pro rata based on the number of shares
of common stock held by each holder (assuming conversion of all Series C, Series
C-1, and Series D preferred stock) until, with respect to holders of Series C
and Series C-1, such holders shall have received an aggregate of $3.6855 per
share and the holders of Series D preferred stock have received an aggregate of
$13.89 per share. Any remaining assets shall be distributed among the holders of
common stock on a pro rata basis.

     VOTING RIGHTS

     Holders of preferred stock are entitled to vote together with holders of
common stock. The number of votes granted to preferred shareholders is to equal
the number of full shares of common stock into which each share of preferred
stock could be converted as described in the Company's Articles of
Incorporation. Special voting rights are provided to Series C, C-1, and D
preferred stockholders for the election of Board of Director members.

                                      F-16
<PAGE>   91
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

     CONVERSION

     At the option of the holder, each share of preferred stock is convertible
at any time into shares of common stock as determined by dividing the Issuance
Price by the Conversion Price. The Issuance Price and Conversion Price for the
preferred stock are as follows: $0.22 per share and $0.07333 per share for
Series A; $0.96 per share and $0.32 per share for Series B; $1.22852 per share
and $0.40951 per share for Series C; $1.22852 per share and $0.40951 per share
for Series C-1; and $9.26 per share and $3.0867 per share for Series D,
respectively. The Conversion Price for each series of preferred stock is subject
to adjustment as described in the Company's articles of incorporation.
Additionally, Series C preferred stock may be automatically converted to Series
C-1 preferred stock in the event such holders of Series C preferred stock do not
exercise their right of first refusal as set forth in the restated investors'
rights agreement.

     All preferred shares will automatically be converted into shares of common
stock upon the earlier of (i) a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act of 1933
at an offering price of not less than $4.63 per share (as adjusted to reflect
any stock splits, stock dividends, or combinations), and an aggregate offering
price of $15.0 million; or (ii) the date specified by written consent or
agreement of (a) the holders of a majority of the then outstanding shares of
Series C and Series C-1 preferred stock, (b) the holders of a majority of the
then outstanding shares of Series D preferred stock and (c) the holders of a
majority of the then outstanding shares of preferred stock.

     DIVIDENDS

     Holders of preferred stock are entitled to receive, when and if declared by
the Board of Directors, dividends at the rate of $0.02 per share of Series A,
$0.096 per share of Series B, $0.122852 per share of Series C, $0.122852 per
share of Series C-1 and $0.926 per share of Series D, respectively, per year,
payable in preference to any payment of any dividend on common stock. After such
dividend payment, any additional dividends declared shall be payable entirely to
the holders of Series C and Series C-1 preferred stock and common stock on a pro
rata basis. The dividends are non-cumulative.

     WARRANTS

     In March 1998, the Company issued warrants to purchase up to 15,000 shares
of Series C preferred stock at an exercise price of $2.00 per share to a lender
in connection with a capital lease. In addition, in connection with two separate
strategic alliance agreements, the Company issued warrants to purchase 200,000
shares of Series C preferred stock at an exercise price of $2.40 per share in
March 1998 and 53,996 shares of Series D preferred stock at an exercise price of
$9.26 per share in September 1998.

     As of December 31, 1998, no warrants had been exercised. As of March 31,
1999, 200,000 warrants for Series C preferred stock had been exercised
(unaudited).

12. STOCK OPTION PLAN AND UNEARNED COMPENSATION

     As of March 31, 1999, the Company has reserved up to 7,500,000 (unaudited)
shares of common stock issuable upon exercise of options issued to certain
employees, directors, and consultants pursuant to the Company's 1997 Stock
Option Plan. Such options are exercisable at prices established at the date of
grant, and have a term of ten years. Each optionee has a vested interest in 25%
of the option shares upon the optionee's completion of one year of service
measured from the grant date. The balance will vest in equal successive monthly
installments of 1/48
                                      F-17
<PAGE>   92
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

upon the optionee's completion of each of the next 36 months of service. If an
option holder ceases to be employed by the Company, vested options held at the
date of termination may be exercised within three months. As of December 31,
1997, 1998 and March 31, 1999, 1,835,649, 3,084,627 and 2,498,280 (unaudited)
options have been granted and 864,351, 621,630 and 1,409,082 (unaudited) options
were still available for grant under the Company's stock option plan. There were
no options granted in 1996.

     Options granted during the years ended December 31, 1997 and 1998 and the
three months ended March 31, 1999 resulted in unearned compensation of $0, $5.7
million and $35.0 million (unaudited), respectively. The amounts recorded
represent the difference between the exercise price and the deemed fair value of
the Company's common stock for shares subject to the options granted. The
amortization of deferred compensation is being charged to operations over the
four-year vesting period of the options. For the year ended December 31, 1998
and the three months ended March 31, 1999, the amortization of unearned
compensation was $1,251,000 and $5,005,000 (unaudited).

     Options under the plan may be either Incentive Stock Options, as defined
under Section 422 of the Internal Revenue Code, or Nonstatutory Options.

     The following information concerning the Company's stock option plan is
provided in accordance with Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation (SFAS 123). As permitted by SFAS 123,
the Company accounts for such plans in accordance with APB No. 25 and related
interpretations. The fair value of each stock option is estimated on the date of
grant using the minimum value option-pricing model with the following weighted
average assumptions.

<TABLE>
<S>                                                           <C>
Expected life...............................................  5 years
Risk-free interest rate.....................................    5.00%
Expected dividend rate......................................    0.00%
Estimated volatility........................................    0.00%
</TABLE>

     As a result of the above assumptions, the weighted average fair value of
options granted during the years ending December 31, 1997 and 1998 and the three
months ended March 31, 1998 and 1999 was $0.22, $2.02, $0.38 (unaudited) and
$14.40 (unaudited), respectively.

     The following pro forma net loss information has been prepared as if the
Company had followed the provisions of SFAS No. 123:

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED
                                   YEAR ENDED DECEMBER 31,               MARCH 31,
                                 ---------------------------    ---------------------------
                                    1997            1998           1998            1999
                                 -----------    ------------    -----------    ------------
                                                                        (UNAUDITED)
<S>                              <C>            <C>             <C>            <C>
Net loss:
  As reported..................  $(1,374,493)   $(11,172,054)   $(1,330,953)   $(11,381,081)
  Pro forma....................  $(1,401,894)   $(11,210,409)   $(1,336,786)   $(11,649,135)
Net loss per share:
  As reported..................  $     (0.12)   $      (0.98)   $     (0.12)   $      (0.94)
  Pro-forma....................  $     (0.12)   $      (0.99)   $     (0.12)   $      (0.97)
</TABLE>

                                      F-18
<PAGE>   93
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

     A summary of the status of the Company's stock option plan and changes
during those periods is presented below:

<TABLE>
<CAPTION>
                                      YEARS ENDED DECEMBER 31,                     THREE MONTHS ENDED
                       ------------------------------------------------------        MARCH 31, 1999
                                 1997                         1998              -------------------------
                       -------------------------   --------------------------          (UNAUDITED)
                                     EXERCISE                     EXERCISE       NUMBER       EXERCISE
                       NUMBER OF     PRICE PER     NUMBER OF      PRICE PER        OF         PRICE PER
                        SHARES         SHARE         SHARES         SHARE        SHARES         SHARE
                       ---------   -------------   ----------   -------------   ---------   -------------
<S>                    <C>         <C>             <C>          <C>             <C>         <C>
Outstanding at
  beginning of year..        --               --    1,835,649   $0.05 - $0.32   3,746,118   $0.05 - $1.33
  Granted............  1,835,649   $0.05 - $0.32    3,084,627   $0.05 - $1.33   2,498,280           $2.00
  Exercised..........        --               --     (132,522)  $0.05 - $0.22    (218,964)  $0.05 - $1.00
  Terminated/
    forfeited........        --               --   (1,041,636)  $0.05 - $1.33    (286,002)  $0.05 - $2.00
                       ---------   -------------   ----------   -------------   ---------   -------------
Outstanding at end of
  year...............  1,835,649   $0.05 - $0.32    3,746,118   $0.15 - $1.33   5,739,432   $0.05 - $2.00
                       =========   =============   ==========   =============   =========   =============
Options exercisable
  at end of year.....   114,999    $        0.05      496,437   $0.05 - $1.00     237,195   $0.05 - $2.00
                       =========   =============   ==========   =============   =========   =============
</TABLE>

     The following table summarizes information about stock options outstanding
at December 31, 1998:

<TABLE>
<CAPTION>
                                OPTIONS OUTSTANDING                     OPTIONS EXERCISABLE
                  -----------------------------------------------   ----------------------------
                                                     WEIGHTED
                                   WEIGHTED          AVERAGE                         WEIGHTED
   RANGE OF         NUMBER         AVERAGE          REMAINING         NUMBER         AVERAGE
EXERCISE PRICES   OUTSTANDING   EXERCISE PRICE   CONTRACTUAL LIFE   EXERCISABLE   EXERCISE PRICE
- ---------------   -----------   --------------   ----------------   -----------   --------------
<S>               <C>           <C>              <C>                <C>           <C>
     $0.05           786,996        $0.05              8.62           425,226         $0.05
     $0.22         1,580,310        $0.22              9.23            30,525         $0.22
     $0.32            10,935        $0.32              8.80             3,186         $0.32
     $0.33           222,000        $0,33              9.52                --            --
     $1.00           408,000        $1.00              9.64            37,500         $1.00
     $1.33           737,877        $1.33              9.90                --            --
                   ---------                                          -------
                   3,746,118                                          496,437
                   =========                                          =======
</TABLE>

                                      F-19
<PAGE>   94
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

     The following table summarizes information about stock options outstanding
at March 31, 1999 (unaudited):

<TABLE>
<CAPTION>
                                OPTIONS OUTSTANDING                     OPTIONS EXERCISABLE
                  -----------------------------------------------   ----------------------------
                                                     WEIGHTED
                                   WEIGHTED          AVERAGE                         WEIGHTED
   RANGE OF         NUMBER         AVERAGE          REMAINING         NUMBER         AVERAGE
EXERCISE PRICES   OUTSTANDING   EXERCISE PRICE   CONTRACTUAL LIFE   EXERCISABLE   EXERCISE PRICE
- ---------------   -----------   --------------   ----------------   -----------   --------------
<S>               <C>           <C>              <C>                <C>           <C>
     $0.05           425,463        $0.05              8.18           103,869         $0.05
     $0.22         1,521,627        $0.22              9.05            72,711         $0.22
     $0.32            10,935        $0.32              8.56             3,870         $0.32
     $0.33           207,750        $0.33              9.27               750         $0.33
     $1.00           394,500        $1.00              9.39            36,000         $1.00
     $1.33           689,877        $1.33              9.65                --            --
     $2.00         2,489,280        $2.00              9.87            19,995         $2.00
                   ---------                                          -------
                   5,739,432                                          237,195
</TABLE>

13. REVENUES AND OTHER INCOME, NET

     The following table provides the components of revenues

<TABLE>
<CAPTION>
                                                                          THREE MONTHS
                                      YEARS ENDED DECEMBER 31,           ENDED MARCH 31,
                                 ----------------------------------   ---------------------
                                   1996        1997         1998        1998        1999
                                 --------   ----------   ----------   --------   ----------
                                                                           (UNAUDITED)
<S>                              <C>        <C>          <C>          <C>        <C>
  Brokerage fees...............  $892,995   $1,042,729   $4,456,070   $526,597   $1,732,464
  Gain on sale of loans........        --           --    1,709,195         --    2,242,116
  Interest income on loans.....        --           --      666,281         --      827,061
                                 --------   ----------   ----------   --------   ----------
          Total revenues.......  $892,995   $1,042,729   $6,831,546   $526,597   $4,801,641
                                 ========   ==========   ==========   ========   ==========
</TABLE>

     The following table provides the components of other income, net

<TABLE>
<CAPTION>
                                                                   THREE MONTHS
                                   YEARS ENDED DECEMBER 31,      ENDED MARCH 31,
                                 ----------------------------   ------------------
                                  1996      1997       1998      1998       1999
                                 -------   -------   --------   -------   --------
                                                                   (UNAUDITED)
<S>                              <C>       <C>       <C>        <C>       <C>
Interest on short-term
  investments..................  $    --   $ 4,629   $237,187   $29,591   $ 62,440
Interest expense on non-
  warehouse facility
  borrowings...................   (3,438)   (7,036)   (63,861)   (9,055)   (26,327)
                                 -------   -------   --------   -------   --------
                                 $(3,438)  $(2,407)  $173,326   $20,536   $ 36,113
                                 =======   =======   ========   =======   ========
</TABLE>

                                      F-20
<PAGE>   95
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

14. OPERATING EXPENSES

     The following table provides the detail of the Company's operating expenses
classified by the following categories:

<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED
                                        YEARS ENDED DECEMBER 31,                MARCH 31,
                                   -----------------------------------   ------------------------
                                     1996        1997         1998          1998         1999
                                   --------   ----------   -----------   ----------   -----------
                                                                               (UNAUDITED)
<S>                                <C>        <C>          <C>           <C>          <C>
Compensation and benefits........  $378,149   $  923,766   $ 7,387,104   $  807,098   $ 3,693,125
Processing costs.................   394,977      624,210     1,219,869      245,278       185,859
Advertising and marketing........    11,430      360,524     5,118,727      424,202     3,256,821
Professional services............    11,201      125,010       307,854       50,673       401,696
Occupancy costs..................    77,037      107,652       374,794       55,509       247,792
Computer and internet............    23,775       42,693       248,929       68,158        42,834
General and administrative.......   103,032      230,960     1,510,618      183,168       805,446
Interest expense on warehouse
  borrowings.....................        --           --       758,031           --     1,031,262
Amortization of unearned
  compensation...................        --           --     1,251,000       44,000     6,554,000
                                   --------   ----------   -----------   ----------   -----------
         Total operating
           expenses..............  $999,601   $2,414,815   $18,176,926   $1,878,086   $16,218,835
                                   ========   ==========   ===========   ==========   ===========
</TABLE>

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

     The fair value of a financial instrument is the amount for which the
instrument could be exchanged in a current transaction between willing parties,
other than in a forced liquidation sale. Fair value estimates are subjective in
nature and involve uncertainties and therefore, cannot be determined with
precision. Changes in assumptions could significantly affect the estimates.

     At December 31, 1998 and March 31, 1999, the fair value of mortgage loans
held-for-sale including the related commitments to sell those mortgage loans
exceeds the carrying value of the mortgage loans held-for-sale by approximately
$300,000 and $400,000 (unaudited), respectively. At December 31, 1998, and March
31, 1999, the fair value of commitments to originate mortgage loans and the
related commitments to sell those loans resulted in an unrecognized gain of
approximately $900,000 and $475,000 (unaudited), respectively. The fair value of
mortgage loans held-for-sale are estimated using quoted market prices for
similar loans or prices for mortgage backed securities backed by similar loans
and the fair value of the commitments to originate and commitments to sell
mortgage loans are estimated using quoted market prices.

     The carrying value of the Company's other financial instruments, including
cash and cash equivalents, accounts receivable and all other financial assets
and liabilities approximate their fair value because of the short-term maturity
of those instruments or because they carry interest rates which approximate
market.

16. SUBSEQUENT EVENTS (UNAUDITED)

     STOCK SPLIT

     In May 1999, the Company's Board of Directors effected a three-for-one
stock split of the outstanding shares of Common Stock. All share and per share
information included in these financial statements have been retroactively
adjusted to reflect this stock split.

                                      F-21
<PAGE>   96
                                  E-LOAN, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

     INITIAL PUBLIC OFFERING AND CONCURRENT PRIVATE PLACEMENT

     In March 1999, the Company's Board of Directors authorized the Company to
file a registration statement with the Securities and Exchange Commission for
the purpose of the initial public offering of the Company's common stock. Upon
the completion of the offering, if requirements set forth in the Certificate of
Incorporation are met, all of the Company's outstanding preferred stock will be
converted into shares of common stock, and all such outstanding shares of
preferred stock will be cancelled and retired. Upon the conversion of the
preferred stock, all rights to accrued and unpaid dividends are waived.
Additionally, upon the completion of the offering, the Company will be
authorized to issue 5,000,000 shares of undesignated preferred stock. The board
of directors will have the authority to determine the price, rights,
preferences, privileges and restrictions of the preferred stock.

     In May 1999, the Company entered into a stock purchase agreement with Forum
Holdings, Inc. in which the Company agreed to sell shares of common Stock to
Forum Holdings, Inc. equal to $12,500,000 divided by the initial public offering
price less the underwriting discount. This sale of shares is conditioned on the
closing of the Company's initial public offering.


     EMPLOYEE STOCK PURCHASE PLAN



     In March 1999, the Company's Board of Directors approved the 1999 Employee
Stock Purchase Plan ("1999 Purchase Plan"). A total of 1,500,000 shares of
common stock have been received for issuance under the 1999 Purchase Plan.


     STOCK OPTION PLAN

     On April 20, 1999, the Board of Directors of the Company voted to increase
the authorized number of common stock options available for grant under the 1997
Stock Option Plan from 7,500,000 to 10,500,000. During April of 1999, the
Company issued 542,055 additional stock options to employees. These options were
issued at exercise prices less than the fair value of the common stock at the
date of the grant. As a result the Company expects to record unearned
compensation amount of approximately $3.3 million.

     SERIES D PREFERRED STOCK PURCHASE

     In February 1999, the Company sold 40,000 shares of Series D convertible
and manditorily redeemable preferred stock at a price of $9.26 per share for
aggregate proceeds of $370,520 to an officer of the Company in connection with
his employment by the Company. This price was below the fair value of the common
stock and resulted in a compensation charge in the amount of $1.55 million
(unaudited) which is equal to the difference between the fair value of the
Series D preferred stock and the price paid for these shares.

     COMMON STOCK ISSUED TO A FOUNDATION

     In May 1999, the Company donated 75,000 shares of common stock in
connection with its establishment of a charitable foundation.

     WARRANT ISSUED

     In May 1999, the Company issued a warrant to purchase 75,000 shares of
common stock at an exercise price equal to the lesser of $13.33 or the initial
public offering price to a lender in connection with a warehouse agreement. This
warrant expires May 21, 2000.

                                      F-22
<PAGE>   97

                                  UNDERWRITING


     E-LOAN, the selling stockholder and the Underwriters named below have
entered into an underwriting agreement with respect to the shares being offered.
Subject to certain conditions, each underwriter has severally agreed to purchase
the number of shares indicated in the following table. Goldman, Sachs & Co.,
Donaldson, Lufkin & Jenrette Securities Corporation, Hambrecht & Quist LLC and
DLJdirect Inc., are the representatives of the underwriters.



<TABLE>
<CAPTION>
                                                              Number of
                        Underwriters                            Shares
                        ------------                          ----------
<S>                                                           <C>
Goldman, Sachs & Co.........................................
Donaldson, Lufkin, & Jenrette Securities Corporation........
Hambrecht & Quist LLC.......................................
E*TRADE Securities, Inc. ...................................
DLJdirect Inc...............................................
          Total.............................................   3,500,000
</TABLE>


                            ------------------------

     If the underwriters sell more than the total number set forth in the table
above, the underwriters have an option to buy up to an additional 525,000 shares
from E-LOAN to cover such sales. They may exercise that option for 30 days. If
any shares are purchased pursuant to this option, the underwriters will
severally purchase shares in approximately the same proportion as set forth in
the table above.

     The following table show the per share and total underwriting discounts and
commissions to be paid to the underwriters by E-LOAN. Such amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares.

<TABLE>
<CAPTION>
                                               PAID BY E-LOAN
                                        ----------------------------
                                        NO EXERCISE    FULL EXERCISE
                                        -----------    -------------
<S>                                     <C>            <C>
Per Share.............................   $               $
          Total.......................   $               $
</TABLE>

     Shares sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a discount
of up to $     per share from the initial public offering price. Any such
securities dealers may resell any shares purchased from the underwriters to
certain other brokers or dealers at a discount of up to $     per share from the
initial public offering price. If all the shares are not sold at the initial
public offering price, the representatives may change the offering price and the
other selling terms.


     E-LOAN and the selling stockholder have agreed with the underwriters not to
dispose of or hedge any of its common stock or securities convertible into or
exchangeable for shares of common stock during the period from the date of this
prospectus continuing through the date 180 days after the date of this
prospectus, except with the prior written consent of the representatives. This
agreement does not apply to any grants under E-LOAN's existing employee benefit
plans. See "Shares Available for Future Sale" for a discussion of certain
transfer restrictions.


     Prior to this offering, there has been no public market for the shares. The
initial public offering price will be negotiated among E-LOAN and the
representatives. Among the factors to be considered in determining the initial
public offering price of the shares, in addition to prevailing market
conditions, will be E-LOAN's historical performance, estimates of the business
potential and earnings prospects of E-LOAN, an assessment of E-LOAN's management
and the consideration of the above factors in relation to market valuation of
companies in related businesses.

                                       U-1
<PAGE>   98

     The shares of common stock have been approved for quotation on the Nasdaq
National Market under the symbol "EELN", subject to official notice of issuance.

     In connection with the offering, the underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in this offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the common
stock while this offering is in progress.

     The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such underwriter in stabilizing or short covering
transactions.

     These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the common stock. As a result, the price of the
common stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by the
underwriters at any time. These transactions may be effected on the Nasdaq
National Market, in the over-the-counter market or otherwise.

     The underwriters do not expect sales to discretionary accounts to exceed
five percent of the total number of shares offered.

     The underwriters have reserved for sale, at the initial public offering
price, up to 300,000 shares of the common stock offered by this prospectus for
certain individuals designated by E-LOAN who have expressed an interest in
purchasing such shares of common stock in the offering. The number of shares
available for sale to the general public will be reduced to the extent such
persons purchase such reserved shares. Any reserved shares not so purchased will
be offered by the underwriters to the general public on the same basis as other
shares offered hereby.

     E-LOAN estimates that the total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately $1.4 million.


     E-LOAN and the selling stockholder have agreed to indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.



     E*Trade Group, Inc., the parent company of E*TRADE Securities, Inc., an
underwriter of the common stock offered hereby, purchased 200,000 shares of
Series C preferred stock of E-LOAN for a total purchase price of $480,000 in
connection with its exercise of the warrant issued to E*Trade Group pursuant to
a marketing agreement with E-LOAN. The shares of Series C preferred stock held
by E*Trade Group are convertible into 600,000 shares of common stock upon the
completion of this offering on the same terms as the other investors in the
private placement of E-LOAN's Series C preferred stock. DLJdirect Inc., an
underwriter of the common stock offered hereby and a wholly owned subsidiary of
Donaldson, Lufkin & Jenrette Securities Corporation, holds a warrant to purchase
53,996 shares of Series D preferred stock of E-LOAN at an exercise price of
$9.26 per share that was issued pursuant to a marketing agreement with E-LOAN.
DLJdirect intends to exercise this warrant prior to the completion of this
offering. The shares of Series D preferred stock to be issued to DLJdirect upon
the exercise of this warrant are convertible into 161,988 shares of common stock
upon the completion of this offering on the same terms as the other investors in
the private placement of E-LOAN's Series D preferred stock. These entities have
agreed that they will not sell, transfer, assign or hypothecate such shares for
180 days after the date of this prospectus, except with the prior written
consent of the representatives.


                                       U-2
<PAGE>   99

                              [INSIDE BACK COVER]

                            DESCRIPTION OF ARTWORK:

[HEADER: E-LOAN LOGO. TEXT UNDER LOGO READS:

     E-LOAN is proud to partner with these financial and real estate industry
leaders by providing their customers with E-LOAN's mortgage products and
services through loan centers on these websites: [there follows a table showing
logos of 34 of E-LOAN's strategic partners, including]:

     E*Trade, DLJdirect, Yahoo!, CBS Marketwatch, SmartMoney.com, Insweb,
Realty.com, USA Today, CCCHome.com, Credit.com, Financenter.com, Homes.com,
HomeSmart USA, InvesTools, Moneyclub, Prism Mortgage Company, NetNoir, NeXTL,
Newconstruction.com, NewRealty.com, Your New House, NextCard, Real Times,
Thomson Investor Network, StockMaster, Talkway, Tegris, Telebank, West Bay
Properties, SiebertNet, Owners.com, Ebtel Federal Credit Union, NetBank,
Bankrate.com.]

     [Text underneath the table of logos reads:

     All of the companies listed here have consented to the use of their logos
in this prospectus.]
<PAGE>   100

- ----------------------------------------------------------
- ----------------------------------------------------------

     No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the shares offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.

                             ----------------------

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                          Page
                                          ----
<S>                                       <C>
Prospectus Summary......................    1
Risk Factors............................    4
Forward Looking Statements..............   13
Use of Proceeds.........................   14
Dividend Policy.........................   14
Capitalization..........................   15
Dilution................................   17
Selected Financial Data.................   18
Management's Discussion and Analysis of
  Financial Condition and Results of
  Operations............................   19
Business................................   31
Management..............................   49
Certain Transactions....................   58
Principal and Selling Stockholders......   61
The Forum Holdings Private Placement....   64
Description of Capital Stock............   64
Shares Available for Future Sale........   69
Legal Matters...........................   70
Experts.................................   70
Available Information...................   70
Index to Financial Statements...........  F-1
Underwriting............................  U-1
</TABLE>


     Through and including             , 1999 (25 days after the date of this
prospectus), all dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to a dealer's obligation to deliver a prospectus when acting
as underwriter and with respect to an unsold allotment or subscription.

- ----------------------------------------------------------
- ----------------------------------------------------------
- ----------------------------------------------------------
- ----------------------------------------------------------
                                3,500,000 Shares
                                  E-LOAN, INC.
                                  Common Stock
                             ----------------------

                                  E-Loan Logo

                             ----------------------
                              GOLDMAN, SACHS & CO.
                          DONALDSON, LUFKIN & JENRETTE
                               HAMBRECHT & QUIST

                            E*TRADE SECURITIES, INC.

                                 DLJDIRECT INC.


- ----------------------------------------------------------
- ----------------------------------------------------------
<PAGE>   101

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

     The following table sets forth the costs and expenses, other than the
underwriting discounts, payable by the Registrant in connection with the sale of
the securities being registered. All amounts are estimates except the SEC
registration fee, the NASD filing fee and the Nasdaq/ NMS listing fee.


<TABLE>
<S>                                                           <C>
SEC Registration Fee........................................  $   15,346
NASD Filing Fee.............................................       6,020
Nasdaq National Market Listing Fee..........................      95,000
Printing Costs..............................................     150,000
Legal Fees and Expenses.....................................     600,000
Accounting Fees and Expenses................................     400,000
Blue Sky Fees and Expenses..................................      10,000
Transfer Agent and Registrar Fees...........................      10,000
Miscellaneous...............................................     113,634
                                                              ----------
  Total.....................................................  $1,400,000
                                                              ==========
</TABLE>


ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933. Article VII of our current
Certificate of Incorporation (Exhibit 3.1 hereto) and Article VI of our current
Bylaws (Exhibit 3.3 hereto) provide for indemnification of our directors,
officers, employees and other agents to the maximum extent permitted by Delaware
law. In addition, we have entered into Indemnification Agreements (Exhibit 10.1
hereto) with our officers and directors. The Underwriting Agreement (Exhibit
1.1) also provides for cross-indemnification among E-LOAN and the Underwriters
with respect to certain matters, including matters arising under the Securities
Act.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

     Since our incorporation in August 1996, we have sold and issued the
following securities:

      1. On September 30, 1996, we issued 12,000,000 shares of common stock to
         two founders for an aggregate consideration of $4,000.00. On September
         30, 1996 we also issued 255,000 shares of common stock to two investors
         for an aggregate consideration of $85.00

      2. On June 10, 1997, we issued 428,635 shares of Series A preferred stock
         to nine investors for an aggregate consideration of $94,299.70.

      3. On December 17, 1997, we issued 430,207 shares of Series B preferred
         stock to twenty-two investors for an aggregate consideration of
         $412,998.72.

      4. On December 19, 1997, we issued 4,069,936 shares of Series C preferred
         stock to two accredited investors for an aggregate consideration of
         $4,999,997.77.

      5. On January 30, 1998, we issued 56,250 shares of common stock to two
         investors for an aggregate consideration of $18.76.

      6. On March 4, 1998, we issued a warrant for 15,000 shares of Series C
         preferred stock convertible into 45,000 shares of common stock to an
         equipment lessor in connection
                                      II-1
<PAGE>   102

         with a Master Lease Agreement. Such warrants have an exercise price of
         $2.00 per share.

      7. On March 20, 1998, we issued a warrant for 200,000 shares of Series C
         preferred stock to one of our marketing partners pursuant to a
         Marketing Agreement. Such warrants had an exercise price of $2.40 per
         share and were exercised on January 13, 1999 for aggregate
         consideration of $480,000.00

      8. On April 16, 1998, we issued 1,500 shares of common stock to one of our
         directors for services rendered valued at $325.00.

      9. On June 1, 1998, we issued 78,738 shares of common stock to one
         investor for an aggregate consideration of $19,683.24.

     10. On September 4, 1998, we issued 1,662,529 shares of Series D preferred
         stock to twelve accredited investors for an aggregate consideration of
         $15,400,006.14.

     11. On September 4, 1998, we issued a warrant for 53,996 shares of Series D
         preferred stock convertible into 161,988 shares of common stock to one
         of our marketing partners pursuant to a Marketing Agreement. Such
         warrant has an exercise price of $9.26 per share.

     12. On February 24, 1999, we issued 40,000 shares of Series D preferred
         stock to one of our officers for an aggregate consideration of $370,520
         paid in cash.


     13. On May 20, 1999, we issued a warrant for 75,000 shares of common stock
         to a lender in connection with a warehouse line agreement. The warrant
         has an exercise price equal to the lesser of $13.33 per share and the
         initial public offering price per share.



     14. Since our incorporation, we have granted an aggregate of 8,227,811
         options to purchase our common stock to employees, directors, and
         consultants with exercise prices ranging from $0.05 to $12.00.


     The issuance of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of such
Securities Act as transactions by an issuer not involving any public offering.
In addition, certain issuances described in Item 12 were deemed exempt from
registration under the Securities Act in reliance upon Rule 701 promulgated
under the Securities Act. The recipients of securities in each such transaction
represented their intentions to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof and
appropriate legends were affixed to the share certificates and warrants issued
in such transactions. All recipients had adequate access, through their
relationships with us, to information about us.

ITEM 16. EXHIBITS.


<TABLE>
    <C>      <S>
     1.1*    Form of Underwriting Agreement.
     3.1*    Certificate of Incorporation of E-LOAN as currently in
             effect.
     3.2*    Form of Restated Certificate of Incorporation of E-LOAN to
             be filed immediately following the closing of the offering
             made under this Registration Statement.
     3.3*    Bylaws of E-LOAN.
     3.4*    Form of Bylaws of E-LOAN to be adopted immediately following
             the closing of the offering made under this Registration
             Statement.
     4.1*    Specimen Common Stock Certificate.
     5.1*    Opinion of Wilson Sonsini Goodrich & Rosati, Professional
             Corporation.
    10.1*    Form of Indemnification Agreement between the Registrant and
             each of its directors and officers.
</TABLE>


                                      II-2
<PAGE>   103

<TABLE>
    <C>      <S>
    10.2*    1997 Stock Plan and form of agreements thereunder.
    10.3*    1999 Employee Stock Purchase Plan and form of agreements
             thereunder.
    10.4*    Restated Investor Rights Agreement dated September 4, 1998
             among E-LOAN and certain investors.
    10.5*    Warrant Agreement to Purchase Shares of the Series C
             Preferred Stock of E-LOAN, Inc. dated March 4, 1998.
    10.6*    Employment Agreement with Joseph Kennedy dated March 26,
             1999.
    10.7+    Marketing Agreement with DLJdirect, Inc. dated September 4,
             1998.
    10.8+    Co-Marketing Agreement with E*Trade Group, Inc. dated March
             26, 1998.
    10.9+    Marketing Agreement with MarketWatch.com dated February 8,
             1999.
    10.10*   Marketing Agreement with Prism Mortgage Company dated July
             6, 1998.
    10.11+   License Agreement with Yahoo!, Inc. dated September 1998 and
             amended in March 1999.
    10.12*   Warehousing Credit and Security Agreement with Bank United,
             a federal savings bank, dated February 3, 1999.
    10.13*   Broker Agreement with Citicorp Mortgage, Inc. dated
             September 23, 1997.
    10.14*+  Underwriting Review Agreement with CMAC Service Company
             dated September 3, 1998.
    10.15*   Warehouse Credit Agreement with Cooper River Funding, Inc.
             and GE Capital Mortgage Services, Inc. dated June 24, 1998
             and Amended and Restated Note.
    10.16*   Loan Purchase Agreement with Countrywide Home Loans, Inc.
             dated September 25, 1998.
    10.17*   Conventional Loan Purchase Agreement with Crestar Mortgage
             Corporation dated July 1, 1998.
    10.18*   GMAC Mortgage Corporation Seller's Agreement for Residential
             Mortgage Loans with GMAC Mortgage Corporation dated July 1,
             1998.
    10.19*   Mortgage Loan Purchase and Sale Agreement with Greenwich
             Capital Financial Products, Inc. dated September 25, 1998.
    10.19A*  Master Loan and Security Agreement with Greenwich Capital
             Financial Products, Inc. dated May 20, 1999.
    10.19B*  Stock Purchase Warrant issued to Greenwich Capital Financial
             Products, Inc. dated May 20, 1999.
    10.20*   License, Staffing, Purchase and Sale Agreement with NetB@nk
             dated October 1, 1998.
    10.21*   Mortgage Loan Processing Agreement with NetB@nk dated
             October 1, 1998.
    10.22*   Wholesale Mortgage Purchase Agreement with PHH Mortgage
             Services Corporation dated June 1, 1998.
    10.23*   Underwriting Services Agreement with PMI Mortgage Services
             Co. Dated June 12, 1998.
    10.24*   Mortgage Purchase Agreement with Resource Bancshares
             Mortgage Group, Inc. dated May 1, 1998.
    10.25*   Mortgage Selling and Servicing Contract with Federal
             National Mortgage Association dated February 12, 1999.
    10.26*   Multi-Tenant Office Triple Net Lease with Creekside South
             Trust dated August 19, 1998.
</TABLE>


                                      II-3
<PAGE>   104
<TABLE>
    <C>      <S>
    10.26A*  Second Amendment to Lease with Creekside South Trust dated
             March 25, 1999.
    10.27*   Alliance Agreement between E-LOAN, Inc., E-LOAN Europe BV
             and Stater BV dated March 19, 1999.
    10.28*   Lease Agreement between JTC and Palo Alto Funding Group,
             Inc. dated June 20, 1996.
    10.29*   Mortgage Loan Origination Agreement with Chase Home Mortgage
             Corporation dated November 30, 1992.
    10.30*   Correspondent Agreement with Citicorp Mortgage, Inc. dated
             June 15, 1998.
    10.31*   Conventional Wholesale Mortgage Purchase Agreement with
             Colonial Mortgage Company dated September 1, 1998.
    10.32*   Lender Associate Agreement with GreenPoint Mortgage dated
             November 9, 1998.
    10.33*   Correspondent Broker Agreement with New America Financial,
             Inc.
    10.34*   Correspondent Mortgage Services Agreement with PHH Mortgage
             Services Corporation dated May 20, 1998.
    10.35*   Correspondent Purchase Agreement with Prism Mortgage Company
             dated March 22, 1998.
    10.36*   Wholesale Lending Agreement with Union Federal Savings Bank
             of Indianapolis dated March 6, 1998.
    10.37*   Master Lease Agreement with Comdisco, Inc. dated March 4,
             1998.
    10.38*   Loan and Security Agreement with Silicon Valley Bank dated
             December 9, 1998.
    10.39*   Internet Data Center Services Agreement with Exodus
             Communications, Inc. dated November 10, 1997.
    10.40*   Marketing Agreement with PHH Mortgage Services Corporation
             dated January 19, 1998.
    10.41*+  Joint Venture Agreement with Softbank Corp. dated March 31,
             1999.
    10.42*   Stock Purchase Agreement with Forum Holdings, Inc. dated May
             20, 1999.
    11.1*    Statement regarding computation of per share earnings.
    23.1     Consent of PricewaterhouseCoopers LLP, Independent
             Accountants.
    23.2*    Consent of Counsel (included in Exhibit 5.1).
    24.1*    Power of Attorney.
    27.1*    Financial Data Schedule.
</TABLE>

- ---------------
* Previously filed.

+ Confidential treatment requested.

ITEM 17. UNDERTAKINGS.

     The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action,
                                      II-4
<PAGE>   105

suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

     The undersigned registrant hereby undertakes that:

     (1) For purposes of determining any liability under the Securities Act of
         1933, the information omitted from the form of prospectus filed as part
         of this registration statement in reliance upon Rule 430A and contained
         in a form of prospectus filed by the registrant pursuant to Rule
         424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
         be part of this registration statement as of the time it was declared
         effective.

     (2) For the purpose of determining any liability under the Securities Act
         of 1933, each post-effective amendment that contains a form of
         prospectus shall be deemed to be a new registration statement relating
         to the securities offered therein, and the offering of such securities
         at that time shall be deemed to be the initial BONA FIDE offering
         thereof.

                                      II-5
<PAGE>   106

                                   SIGNATURES


     Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Palo Alto,
State of California on June 22, 1999.


                                          By:       /s/ CHRIS LARSEN
                                            ------------------------------------
                                              Chris Larsen
                                              Chief Executive Officer


     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:



<TABLE>
<CAPTION>
              SIGNATURE                                    TITLE                           DATE
              ---------                                    -----                           ----
<C>                                    <S>                                             <C>
          /s/ CHRIS LARSEN             Chief Executive Officer and Director            June 22, 1999
- ------------------------------------   (Principal Executive Officer)
            Chris Larsen

        /s/ JANINA PAWLOWSKI*          President and Director                          June 22, 1999
- ------------------------------------
          Janina Pawlowski

         /s/ FRANK SISKOWSKI           Chief Financial Officer                         June 22, 1999
- ------------------------------------   (Principal Financial and Accounting Officer)
           Frank Siskowski

       /s/ IRA M. EHRENPREIS*          Director                                        June 22, 1999
- ------------------------------------
          Ira M. Ehrenpreis

        /s/ ROBERT C. KAGLE*           Director                                        June 22, 1999
- ------------------------------------
           Robert C. Kagle

           /s/ TIM KOOGLE*             Director                                        June 22, 1999
- ------------------------------------
             Tim Koogle

         /s/ WADE RANDLETT*            Director                                        June 22, 1999
- ------------------------------------
            Wade Randlett

      *By: /s/ FRANK SISKOWSKI
- -------------------------------------
           Frank Siskowski
          Attorney-in-Fact
</TABLE>


                                      II-6
<PAGE>   107

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
                                                                         SEQUENTIALLY
  EXHIBIT                                                                  NUMBERED
  NUMBER                     DESCRIPTION OF DOCUMENT                         PAGE
  -------  ------------------------------------------------------------  ------------
  <C>      <S>                                                           <C>
  1.1*     Form of Underwriting Agreement.
  3.1*     Certificate of Incorporation of E-LOAN as currently in
           effect.
  3.2*     Form of Restated Certificate of Incorporation of E-LOAN to
           be filed immediately following the closing of the offering
           made under this Registration Statement.
  3.3*     Bylaws of E-LOAN.
  3.4*     Form of Bylaws of E-LOAN to be adopted immediately following
           the closing of the offering made under this Registration
           Statement.
  4.1*     Specimen Common Stock Certificate.
  5.1*     Opinion of Wilson Sonsini Goodrich & Rosati, Professional
           Corporation.
  10.1*    Form of Indemnification Agreement between the Registrant and
           each of its directors and officers.
  10.2*    1997 Stock Plan and form of agreements thereunder.
  10.3*    1999 Employee Stock Purchase Plan and form of agreements
           thereunder.
  10.4*    Restated Investor Rights Agreement dated September 4, 1998
           among E-LOAN and certain investors.
  10.5*    Warrant Agreement to Purchase Shares of the Series C
           Preferred Stock of E-LOAN, Inc. dated March 4, 1998.
  10.6*    Employment Agreement with Joseph Kennedy dated March 26,
           1999.
  10.7+    Marketing Agreement with DLJdirect, Inc. dated September 4,
           1998.
  10.8+    Co-Marketing Agreement with E*Trade Group, Inc. dated March
           26, 1998.
  10.9+    Marketing Agreement with MarketWatch.com dated February 8,
           1999.
  10.10*   Marketing Agreement with Prism Mortgage Company dated July
           6, 1998.
  10.11+   License Agreement with Yahoo!, Inc. dated September 1998 and
           amended in March 1999.
  10.12*   Warehousing Credit and Security Agreement with Bank United,
           a federal savings bank, dated February 3, 1999.
  10.13*   Broker Agreement with Citicorp Mortgage, Inc. dated
           September 23, 1997.
  10.14*+  Underwriting Review Agreement with CMAC Service Company
           dated September 3, 1998.
  10.15*   Warehouse Credit Agreement with Cooper River Funding, Inc.
           and GE Capital Mortgage Services, Inc. dated June 24, 1998
           Amended and Restated and Note.
  10.16*   Loan Purchase Agreement with Countrywide Home Loans, Inc.
           dated September 25, 1998.
  10.17*   Conventional Loan Purchase Agreement with Crestar Mortgage
           Corporation dated July 1, 1998.
  10.18*   GMAC Mortgage Corporation Seller's Agreement for Residential
           Mortgage Loans with GMAC Mortgage Corporation dated July 1,
           1998.
</TABLE>

<PAGE>   108


<TABLE>
<CAPTION>
                                                                         SEQUENTIALLY
  EXHIBIT                                                                  NUMBERED
  NUMBER                     DESCRIPTION OF DOCUMENT                         PAGE
  -------  ------------------------------------------------------------  ------------
  <C>      <S>                                                           <C>
  10.19*   Mortgage Loan Purchase and Sale Agreement with Greenwich
           Capital Financial Products, Inc. dated September 25, 1998.
  10.19A*  Master Loan and Security Agreement with Greenwich Capital
           Financial Products, Inc. dated May 20, 1999.
  10.19B*  Stock Purchase Warrant issued to Greenwich Capital Financial
           Products, Inc. dated May 20, 1999.
  10.20*   License, Staffing, Purchase and Sale Agreement with NetB@nk
           dated October 1, 1998.
  10.21*   Mortgage Loan Processing Agreement with NetB@nk dated
           October 1, 1998.
  10.22*   Wholesale Mortgage Purchase Agreement with PHH Mortgage
           Services Corporation dated June 1, 1998.
  10.23*   Underwriting Services Agreement with PMI Mortgage Services
           Co. Dated June 12, 1998.
  10.24*   Mortgage Purchase Agreement with Resource Bancshares
           Mortgage Group, Inc. dated May 1, 1998.
  10.25*   Mortgage Selling and Servicing Contract with Federal
           National Mortgage Association dated February 12, 1999.
  10.26*   Multi-Tenant Office Triple Net Lease with Creekside South
           Trust dated August 19, 1998.
  10.26A*  Second Amendment to Lease with Creekside South Trust dated
           March 25, 1999.
  10.27*   Alliance Agreement between E-LOAN, Inc., E-LOAN Europe BV
           and Stater BV dated March 19, 1999.
  10.28*   Lease Agreement between JTC and Palo Alto Funding Group,
           Inc. dated June 20, 1996.
  10.29*   Mortgage Loan Origination Agreement with Chase Home Mortgage
           Corporation dated November 30, 1992.
  10.30*   Correspondent Agreement with Citicorp Mortgage, Inc. dated
           June 15, 1998.
  10.31*   Conventional Wholesale Mortgage Purchase Agreement with
           Colonial Mortgage Company dated September 1, 1998.
  10.32*   Lender Associate Agreement with GreenPoint Mortgage dated
           November 9, 1998.
  10.33*   Correspondent Broker Agreement with New America Financial,
           Inc.
  10.34*   Correspondent Mortgage Services Agreement with PHH Mortgage
           Services Corporation dated May 20, 1998.
  10.35*   Correspondent Purchase Agreement with Prism Mortgage Company
           dated March 22, 1998.
  10.36*   Wholesale Lending Agreement with Union Federal Savings Bank
           of Indianapolis dated March 6, 1998.
  10.37*   Master Lease Agreement with Comdisco, Inc. dated March 4,
           1998.
  10.38*   Loan and Security Agreement with Silicon Valley Bank dated
           December 9, 1998.
</TABLE>

<PAGE>   109

<TABLE>
<CAPTION>
                                                                         SEQUENTIALLY
  EXHIBIT                                                                  NUMBERED
  NUMBER                     DESCRIPTION OF DOCUMENT                         PAGE
  -------  ------------------------------------------------------------  ------------
  <C>      <S>                                                           <C>
  10.39*   Internet Data Center Services Agreement with Exodus
           Communications, Inc. dated November 10, 1997.
  10.40*   Marketing Agreement with PHH Mortgage Services Corporation
           dated January 19, 1998.
  10.41*+  Joint Venture Agreement with Softbank Corp. dated March 31,
           1999.
  10.42*   Stock Purchase Agreement with Forum Holdings, Inc. dated May
           20, 1999.
  11.1*    Statement regarding computation of per share earnings.
  23.1     Consent of PricewaterhouseCoopers LLP, Independent
           Accountants.
  23.2*    Consent of Counsel (included in Exhibit 5.1).
  24.1*    Power of Attorney.
  27.1*    Financial Data Schedule.
</TABLE>

- ---------------
* Previously filed.

+ Confidential treatment requested.

<PAGE>   1
                                                                   EXHIBIT 10.7



                              MARKETING AGREEMENT

         This Marketing Agreement (the "Agreement") is made as of September 4,
1998 by and between DLJDIRECT Inc., a Delaware corporation with an address at
One Pershing Plaza, Jersey City, NJ 07399 ("DLJdirect"), and E-LOAN, INC., a
California corporation with an address at 540 University Avenue, Palo Alto,
California 94301 ("E-Loan"), for the purpose of defining the terms and
conditions for providing loan services and hypertext links from the DLJdirect
Web site to the E-Loan Web site.

         Whereas DLJdirect and E-Loan intend to enter into an arrangement to
offer DLJdirect customers access to E-Loan content and services:

         1. LOAN CENTER.

                  1.1 LOAN CENTER. E-Loan will create a "Loan Center," an
internet site accessible by DLJdirect customers and the general public, for
DLJdirect that will have the DLJdirect "look and feel," including the current
DLJdirect navigation header, with a graphical reference to E-Loan. The Loan
Center will contain various hypertext links to mortgage tools, services, and
articles provided by E-Loan and shall enable customers of DLJdirect to, at a
minimum, (a) search for rates for mortgages, second mortgages, home equity
loans, and refinancings (collectively, "Loan Products") from a variety of
lenders; (b) apply online for a Loan Product; and (c) prequalify for a Loan
Product. All hypertext links from the Loan Center shall be subject to the prior
written approval of DLJdirect. All tools, services and articles will have an
E-Loan/DLJdirect co-branded header ("Co-Branded Pages"), and use the current
DLJdirect navigation header and E-Loan sidebar and footer. Both parties shall
agree to the "look and feel" of the Loan Center.

                  1.2 NUMBER OF LENDERS. E-Loan shall guarantee that for the
duration of the Agreement it will maintain a relationship with at least [*]
lenders that are eligible to offer Loan Products to DLJdirect customers in the
Loan Center. DLJdirect shall have the right to exclude certain lenders from the
Loan Center for any reason.

                  1.3 MORTGAGE LICENSES. E-Loan shall take steps necessary at
its own cost and expense to become licensed in at least [*] states [*]
by the end of 1998 and in [*] states and [*] by the end of June, 1999 as
a mortgage broker and as a mortgage bank. E-Loan represents that it will not
offer or process mortgage loans in states where it is not licensed or authorized
to do so. Further, E-Loan represents that the establishment of the Loan Center
and the anticipated compensation of DLJdirect hereunder does not constitute
mortgage brokerage by DLJdirect (provided that appropriate disclosures are made
on the Loan Center).

                  1.4 COMPLIANCE WITH CONSUMER LAW AND REGULATION. With regard
to both E-Loan's activities in general and, in particular, in its handling of
each application for each Loan Product, E-Loan shall comply with all State,
Federal and local laws, rules and regulations, including but not limited to:
(i) the Federal Truth in Lending Act, as amended ("TILA"), and Federal Reserve
Regulation Z thereunder; (ii) the Federal Equal Credit Opportunity Act ("ECOA")
and Federal Reserve Regulation B thereunder; (iii) the Federal Fair Credit
Reporting


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.
<PAGE>   2

Act; (iv) the Federal Real Estate Settlement Procedures Act as amended (RESPA),
and Regulation X thereunder; (v) the Home Mortgage Disclosure Act and
Regulation C thereunder; (vi) the Fair Housing Act; and (vii) the National
Affordable Housing Act. In connection with ECOA and Regulation B, E-Loan agrees
that it will not discourage or pre-screen any applicant or in any other manner
violate the Act and Regulation. Further, E-Loan or its agents, or, if
applicable, the originating lender shall be responsible for timely providing
all consumer compliance disclosures (such as Good Faith Estimates of Settlement
Services; HUD-1 Settlement Statements; ECOA adverse action notifications; TILA
disclosures) required by the foregoing laws and regulations. E-Loan shall
maintain, available for DLJdirect's inspection, and shall deliver to DLJdirect
upon demand, evidence of compliance with all such requirements.


         2. LOAN COLLATERALIZED BY SECURITIES ACCOUNT. E-Loan and DLJdirect
will develop a loan product ("Loan Collateralized By Securities Account" or
"LCBSA") that allows customers of DLJdirect to use their DLJdirect account as
collateral for a home mortgage. E-Loan agrees not to offer or announce its
intention to offer a similar product to the customers of any other financial
services company until December 31, 1998. E-Loan shall not preclude any other
Loan Center lenders from originating loans collateralized by DLJdirect
securities accounts through the Loan Center, which lenders have been approved in
writing by DLJdirect to do so. If, for any reason, a separate written agreement
is not executed by the parties regarding the terms of the LCBSA on or before
November 15, 1998 either party may, at its option, terminate all obligations
under this Paragraph 2. In such event, either party may enter into agreements
with other parties to develop and market LCBSA products. All other provisions of
this Agreement shall continue unchanged in the event either party elects to
terminate all obligations of Paragraph 2.


         3. DEBT TRACKER. At DLJdirect's request, E-Loan will work with
DLJdirect to integrate E-Loan's Debt Tracker service into DLJdirect's Web site,
which will allow DLJdirect customers and visitors to the DLJdirect site to
monitor their mortgages. DLJdirect reserves the right not to offer Debt Tracker
to all or some of its customers/visitors.

         4. MARKETING FEES.

                  4.1 MARKETING FEES. E-Loan will pay a marketing fee to
DLJdirect the greater of (i) [*] per month or (ii) [*] per click-through from
the Loan Center to any of the links to E-Loan services (excluding links to
articles or calculators). Upon the delivery of a written opinion of counsel
acceptable to, and in form and substance satisfactory to DLJdirect, to the
effect that RESPA and other applicable laws permit payment on a per completed
loan application or closed loan basis, the marketing fee payment to DLJdirect
with respect to all loans sourced or originated by E-Loan in connection with the
"Co-Branded Pages" shall be not less than [*] per completed application or [*]
per closed loan, whichever is greater (and not on the basis set forth in the
preceding sentence). This fee structure will be re-negotiated by the parties in
good faith if DLJdirect or its affiliates becomes a licensed mortgage broker or
licensed mortgage banker.

                  4.2 PAYMENT. Payment on a click-through basis shall be made
no more than thirty (30) days after the last day of each calendar month. E-Loan
will issue DLJdirect a user code,


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                      -2-
<PAGE>   3

which must be used by DLJdirect to allow E-Loan to monitor traffic coming from
the Loan Center. When and if payment is ever made on a per completed
application or on a per closed loan basis, payment shall be made no more than
sixty (60) days after the last day of each calendar month.

                  4.3 MARKETING. In return for the marketing fees, DLJdirect
shall:

                           (a) Issue a joint press release with E-Loan which
shall be mutually agreed upon by both parties.

                           (b) Announce the Loan Center in its quarterly
newsletter to customers, IQ.

                           (c) Announce the Loan Center in a statement message.

                           (d) Establish a link to the Loan Center from within
at least one (1) of the six (6) main sections of the DLJdirect site (currently
Market Monitor).

                           (e) Include the Loan Center in its marketplace area,
when such area becomes available on its site, but not later than November 30,
1998.

                           (f) Refer to the Loan Center in the "Awards and
Announcements" section of its home page under the heading "DLJdirect Facts."

                           (g) Refer to the Loan Center in the "Common
Questions" section of its home page.

                  4.4 HOME EQUITY LINE OF CREDIT. E-Loan shall offer customers
of DLJdirect, who apply for and obtain a first mortgage loan through the Loan
Center, a Home Equity Line of Credit ("HELOC"), which must close concurrently
with the first mortgage loan. E-Loan will charge no additional fees for the
HELOC and E-Loan will credit DLJdirect customers [*] for closing both the first
mortgage loan and the HELOC. The [*] will be credited to DLJdirect customers at
the time of closing. E-LOAN agrees not to offer this product to customers of any
other company until November 1, 1998.

         5. WARRANTS. In consideration of DLJdirect entering into this
Agreement, E-Loan shall issue to DLJdirect warrants to purchase $500,000 of
E-Loan stock per the Warrant Purchase Agreement ("Purchase Agreement") dated
September 4, 1998 and the Warrant to Purchase Preferred Stock of E-Loan
("Warrant to Purchase Preferred Stock") dated September 4, 1998, both of which
are attached hereto. Any warrants that have become exercisable pursuant to the
Warrant to Purchase Preferred Stock shall be deemed vested and non-forfeitable.

         6. DONALDSON, LUFKIN & JENRETTE (DLJ). With respect to residential
mortgage loans sourced or originated by E-Loan in connection with the
"Co-Branded Pages" and utilizing DLJ's posted price, E-Loan shall sell such
loans to DLJ Mortgage Capital, Inc. (or another DLJ company, at the direction
of DLJdirect), provided the mutually agreed upon underwriting guidelines have
been satisfied.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                      -3-
<PAGE>   4

         7. USAGE INFORMATION. E-Loan will monitor user traffic coming from the
Loan Center and provide DLJdirect with a report of this information on a
monthly basis. DLJdirect shall provide E-Loan with a monthly report of the
number of page views for any page on its site which links to the Loan Center.

         8. LICENSE.

                  8.1 LICENSE OF MARKS. DLJdirect and E-Loan each grants to the
other during the term of this Agreement a non-exclusive, non-transferable,
royalty-free, worldwide license to use those of its trademarks, service marks,
trade names, legal or other commercial or product designations (collectively,
"Marks") on the other's Web site solely in connection with the object of this
Agreement, including but not limited to inclusion in hypertext links,
marketing, promotion, inclusion in content directories or indexes, and in
electronic or print advertising, publicity materials, press releases,
newsletters, and mailings, subject to the prior written approval by the
licensing party of each individual use of that party's Mark(s).

                  8.2 LICENSE OF OTHER PROPRIETARY INTELLECTUAL PROPERTY
MATERIALS. DLJdirect and E-Loan each grants to the other during the term of
this Agreement a non-exclusive, non-transferable, royalty-free, worldwide
license to use any and all other proprietary materials, whether protected under
copyright, patent, trade secret or other law (collectively, "IP Materials") on
the other's Web site solely in connection with the object of this Agreement,
including but not limited to inclusion in Web content pages, marketing,
promotion, inclusion in content directories or indexes, and in electronic or
print advertising, publicity materials, press releases, newsletters, and
mailings, subject to the prior written approval by the licensing party of the
first use of each piece of IP Material and the right of that party to terminate
the use of that IP Material upon thirty (30) days written notice.

                  8.3 PROVIDED IN GOOD FAITH. Both parties represent and
warrant that their respective Web sites, their Marks, and their IP Materials,
as well as all products or services available either through their respective
Web sites or otherwise are provided in good faith, in compliance with
applicable law and current business practices and do not violate the terms of
any agreements with third parties.

                  8.4 REMOVAL OF MARKS. DLJdirect may, upon written request of
E-Loan or on its own initiative, remove the E-Loan Marks and all other
references to E-Loan from its site.

         9. CONTENT. Subject to Paragraphs 1.1 and 10, E-Loan shall give prior
notice to DLJdirect in the event that it intends to materially alter the
essential nature of its Internet site such that it materially affects the
content being provided therein.

         10. ADVERTISING. E-Loan shall not display advertisements of any type
or references to third parties on the Loan Center or on the Co-Branded Pages or
on any of the links from the Loan Center without the prior written consent of
DLJdirect. DLJdirect shall not display advertisements of any type on any pages
which display the E-Loan Marks without the written approval of E-Loan, except
that DLJdirect may display links to other content providers and that this shall
not prevent DLJdirect from linking to the Loan Center from the marketplace
section of its site.






                                      -4-
<PAGE>   5

         11. EXCLUSIVITY. E-Loan will be the exclusive content provider of home
mortgage comparison services to DLJdirect during the first year of this
Agreement. This does not limit DLJdirect from selling advertising to other
single source mortgage providers (e.g. banks) on all pages of the DLJdirect Web
site other than the Loan Center or the Co-Branded pages. Exclusivity will only
be extended during the second year of the term if DLJdirect elects to receive
the second installment of warrants as specified in the Warrant to Purchase
Preferred Stock. Exclusivity shall not apply to the provision of the LCBSA
described in Paragraph 2 in the event either party terminates the obligations
set forth in Paragraph 2.

         12. INTELLECTUAL PROPERTY RIGHTS. Each party represents and warrants
that it owns all right, title and interest or, to the extent not owned, has all
necessary rights to use all materials owned by any third party which are used
in its online service or Web site, and in its Marks and its IP Materials, and
that the use thereof shall not violate any U.S. patent, copyright, intellectual
property, contractual or other right of any third party.

         13. BENEFITS ON THIRD PARTIES. Nothing in this agreement shall be
construed to confer benefits on third parties, including but not limited to the
customers of DLJdirect or E-Loan and/or users of or visitors to the E-Loan Web
site.

         14. AUDIT. Either party may, at its own expense, upon reasonable
notice and during normal business hours, no more than once annually, inspect
and audit the other party's records directly relating to the terms of this
Agreement. Such audits shall be conducted by an independent certified public
accountant at the cost of the requesting party and shall be limited in scope to
a period of twelve (12) months prior to the month in which the audit commences,
but not to include any period of time prior to the commencement of this
Agreement.

         15. INDEMNIFICATION. Each party (indemnitor) shall indemnify and hold
harmless the other (indemnitee) from and against any losses or damages
(including reasonable attorneys' fees and disbursements) suffered by the
indemnitee arising from any and all claims, suits, actions or causes of action
seeking damages for losses caused by the actions or omissions of the
indemnitor, including without limitation any breach of any warranty made by the
indemnitor in this Agreement, except to the extent that such claims, suits,
actions or causes of action relate to the negligence or willful misconduct of
the indemnitee. E-Loan shall indemnify DLJdirect from all costs and expenses
(including attorneys and other experts) of any mortgage regulatory inquiry that
may be initiated relating to this Agreement. DLJdirect shall indemnify E-Loan
from all costs and expenses (including fees and disbursements of attorneys and
other experts) of any regulatory inquiry related to a securities transaction in
a customer's DLJdirect account that may be initiated relating to this
Agreement. Further, E-Loan shall indemnify DLJdirect from all costs and
expenses (including attorneys, other experts and any related court costs)
arising from E-Loan's failure to comply with the consumer appliance laws and
regulations set forth in Paragraph 1.4 of this Agreement, and in particular,
for failure to timely provide all of the disclosures required by such laws and
regulations.





                                      -5-
<PAGE>   6

         16. NOTIFICATION. Each party shall notify the other as soon as
practicable in the event that it receives a complaint, claim or regulatory
inquiry concerning the other or becomes aware of any misuse of or
misrepresentation concerning Marks, IP Material, Confidential Information, or
services of the other party.

         17. DISCLAIMER OF WARRANTIES. Both parties shall provide all services
hereunder "AS IS" and without any warranty of any kind. E-Loan does not
guarantee continuous or uninterrupted display or distribution of the Co-Branded
Pages and DLJdirect does not guarantee continuous or uninterrupted operation of
its Web site. In the event of interruption of display or distribution of the
Loan Center or of the Co-Branded Pages or of DLJdirect's Web site, the affected
party's sole obligation shall be to restore service as soon as reasonably
possible.

         18. LIMITATIONS ON LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT
NOT LIMITED TO, SUCH DAMAGES ARISING FROM BREACH OF CONTRACT OR WARRANTY OR
FROM NEGLIGENCE OR STRICT LIABILITY), OR FOR INTERRUPTED COMMUNICATIONS OR LOSS
OF USE THEREOF, LOST BUSINESS, LOST DATA OR LOST PROFITS, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT.

         19. TERM AND TERMINATION.


                  19.1 TERM. The initial term of this Agreement shall be for
two (2) years and this Agreement shall automatically renew for one (1) year
periods thereafter unless and until terminated by written notice from one party
to the other given not less than sixty (60) days prior to the beginning of the
next one (1) year period. The following Paragraphs shall survive the termination
of this Agreement: 15; 18; 19; 21; 22; 23; and 26.


                  19.2 TERMINATION FOR BREACH. Except as expressly provided
elsewhere in this Agreement, either party may terminate this Agreement at any
time in the event of a breach of the Agreement by the other party which remains
uncured after thirty (30) days written notice thereof to the other party (or
such shorter period as may be specified elsewhere in this Agreement); provided
that the cure period with respect to any scheduled payment will be fifteen (15)
days following the due date.

                  19.3 TERMINATION FOR BANKRUPTCY/INSOLVENCY. Either party may
terminate this Agreement immediately following written notice to the other
party if the other party (i) abandons its business in the normal course; (ii)
becomes or is declared insolvent or bankrupt; (iii) is the subject of any
proceeding related to its liquidation or insolvency (whether voluntary or
involuntary) which is not dismissed within ninety (90) calendar days; or (iv)
makes an assignment for the benefit of creditors.

                  19.4 TERMINATION ON CHANGE OF CONTROL. In the event of a
change of control of DLJdirect resulting in control of DLJdirect by an
interactive mortgage comparison service company, E-Loan may terminate this
Agreement by providing thirty (30) days prior written notice of such intent to
terminate. In the event of a change of control of E-Loan resulting in control
of E-Loan by an online brokerage service or other securities firm, DLJdirect
may


                                      -6-
<PAGE>   7

terminate this Agreement by providing thirty (30) days prior written notice of
such intent to terminate. A change of control shall be defined as ownership of
more than 50% of the applicable company by a different entity than the owner as
of the date of this Agreement.

                  19.5 TERMINATION ON ACQUISITION OF COMPETITOR. In the event
E-Loan acquires ownership or control of a provider of securities brokerage
services or establishes its own offering of securities brokerage services, then
DLJdirect may terminate this Agreement by providing thirty (30) days prior
written notice of such intent to terminate. In the event DLJdirect acquires
ownership and control of an interactive mortgage comparison service or
establishes its own interactive mortgage comparison service, then E-Loan may
terminate this Agreement by providing thirty (30) days prior written notice of
such intent to terminate.

         20. ARBITRATION. All disputes, claims or controversies arising out of
this Agreement shall be exclusively settled in accordance with the rules of
arbitration of the National Association of Securities Dealers Regulation, Inc.
whose decision shall be final and binding upon the parties. The parties further
agree that the arbitrators shall have the power to grant injunctive relief.
Each party shall bear its own cost and expense of the arbitration. The decision
of the arbitrators may be enforced in a court of competent jurisdiction in New
York City. The location for all arbitration hearings shall be in New York City.

         21. CONFIDENTIAL INFORMATION. Each party acknowledges that during the
term of this Agreement such party may come into possession of Confidential
Information of the other party. For the purposes of this Agreement,
"Confidential Information" means any information which the party disclosing the
information (the "Discloser") designated as confidential or which the party
receiving the information (the "Receiver") knows or has reason to know is
confidential to the Discloser. Without limitation on the foregoing,
Confidential Information includes: the terms of this Agreement, the E-Loan
server logs and all information contained therein, all information provided by
users to E-Loan in connection with the use of the Co-Branded Pages, the
Co-Branded Pages specifications, code for the Co-Branded Pages and the company
content. Confidential Information does not include information which is (a)
already known by the Receiver at time of disclosure; (b) is or becomes, through
no act or fault of the Receiver, publicly known; (c) received by the Receiver
from a third party without a restriction on disclosure or use; (d)
independently developed by the Receiver without reference to Discloser's
Confidential Information; or (e) required to be disclosed by a court or
governmental agency pursuant to a statute, regulation, or valid order.

         22. GOVERNING LAW. This Agreement will be governed and construed in
accordance with the laws of the State of New York without giving effect to
principles of conflict of laws.

         23. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding and agreement of the parties and supersedes any and all oral or
written agreements or understandings between the parties as to the subject
matter of this Agreement. This Agreement may only be amended in a writing
jointly executed by both parties hereto.

         24. ASSIGNMENT. This Agreement is not assignable by either party
without the written consent of the other party except that either party may
assign this Agreement in full to the





                                      -7-
<PAGE>   8

surviving entity in a merger or acquisition or to a purchaser of more than 50%
of its assets, but subject to Paragraph 19.4. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the
successors and permitted assigns of the parties.

         25. YEAR 2000 WARRANTY. E-Loan represents and warrants that its
proprietary technology, system and processes ("Software") will record, store,
process, calculate, and present calendar dates falling on or after (and if
applicable, spans of time including) January 1, 2000, in the same manner, and
with the same functionality, data integrity and performance, as the Software
records, stores, processes, calculates and presents calendar dates on or before
December 31, 1999 ("2000 Compliant"). E-Loan represents that the Software (i)
will lose no functionality with respect to the introduction of records
containing dates falling on or after January 1, 2000; and (ii) will function
with other software used by DLJdirect and/or Pershing ("Other Software") which
may deliver records to the Software or receive records from Software, or
interact with the Software, including but not limited to back-up and archived
data, except to the extent that Other Software is not 2000 Compliant.

         26. GENERAL. If any provision of this Agreement is held to be invalid
or unenforceable for any reason, the remaining provisions will continue in full
force without being impaired or invalidated in any way. The parties of this
Agreement are independent contractors, and no agency, partnership, joint
venture or employee-employer relationship is intended or created by this
Agreement.

<TABLE>
<CAPTION>
DLJDIRECT INC.:                              E-LOAN, INC.:

<S>                                          <C>
By: /s/ Lia Hecht                            By: /s/ Doug Galen
    --------------------------------            ------------------------------------
        Lia Hecht                                 Douglas Galen
        Vice President                            Vice President of Sales & Business
                                                  Development

Date:                                        Date:
    --------------------------------              ----------------------------------
</TABLE>


                                      -8-
<PAGE>   9
                           WARRANT PURCHASE AGREEMENT



         THIS WARRANT PURCHASE AGREEMENT ("Agreement") is made as of the 4th
day of September, 1998, by and among E-Loan, Inc., a California corporation
(the "Company"), and DLJdirect, a Delaware corporation ("DLJdirect" or the
"Holder").

                                   RECITALS:

         WHEREAS, pursuant to the terms of the Marketing Agreement, by and
between the Company and DLJdirect, dated September 4, 1998 (the "Marketing
Agreement"), and in consideration thereof, the Company desires to issue a
Warrant (as hereafter defined) to DLJdirect, and DLJdirect wishes to receive a
Warrant, to purchase that number of shares of the Company's Series D Preferred
Stock ("Series D Preferred Stock") as determined in this Agreement and in the
Warrant;

         WHEREAS, the parties also wish to set forth certain representations,
warranties, covenants, and agreements relating to the purchase of the Warrant
provided for herein.

         NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

         1. Authorization and Issuance of the Warrant.

                  1.1 Authorization. The Company has authorized the sale and
issuance of the Warrant to DLJdirect.

                  1.2 Sale and Issuance of the Warrant. Subject to the terms
and conditions hereof, the Company agrees to issue to the Holder a Warrant
exercisable, at a price per share equal to $9.27, for that number of shares of
Series D Preferred Stock as calculated in accordance with Section 1 of the
Warrant, the form of which is attached hereto as Exhibit A (the "Warrant").

         2. Closing.

                  2.1 Closing; Closing Date. The closing of the issuance of the
Warrant under this Agreement (the "Closing") shall take place on the date of
this Agreement (the "Closing Date"), in accordance with arrangements mutually
satisfactory to the Holder and counsel for the Company.

                  2.2 Closing Delivery. At the Closing, the Company will
deliver to the Holder a Warrant to purchase that number of shares of Series D
Preferred Stock as set forth in Section 1.2 hereto.

         3. Market Stand-Off. The Holder hereby agrees that the Holder shall be
bound by the following market stand-off requirements with respect to the Series
D Preferred Stock obtained upon exercise of the Warrant, and the Common Stock
obtained upon conversion of the Series D Preferred Stock, or any securities
issued in exchange or replacement thereof (any of the foregoing, and
collectively, the "Warrant Shares"):



<PAGE>   10

The Holder hereby agrees that, during a period not to exceed 180 days,
following the effective date of a registration statement of the Company filed
under the Securities Act of 1933, as amended (the "Act"), it shall not, to the
extent requested by the Company and the representative(s) of the underwriters
in connection therewith, directly or indirectly sell, offer to sell, contract
to sell (including, without limitation, any short sale), grant any option to
purchase or otherwise transfer or dispose of (other than to donees who agree to
be similarly bound) any Warrant Shares of the Company held by it at any time
during such period except Common Stock included in such registration; provided,
however, that:

                  3.1 Such agreement shall be applicable only to the first such
registration statement of the Company which covers Common Stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;
and

                  3.2 all officers and directors of the Company enter into
similar agreements.

In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Warrant Shares until the end of
any applicable restricted period.

         4. Representations And Warranties of the Company.

                  4.1 Authorization. Subject to necessary corporate action to
designate and authorize a sufficient number of Warrant Shares to affect the
exercise of the Warrant, all corporate action on the part of the Company, its
officers, directors, and shareholders necessary for the authorization,
execution, and delivery of this Agreement, the performance of all the Company's
obligations hereunder and for the authorization, issuance, sale, and delivery
of the Warrant and the Warrant Shares has been taken or will be taken prior to
the Closing.

                  4.2 Validity of Warrant and Warrant Shares. The Warrant, when
issued in accordance with the terms of this Agreement, shall be duly and
validly issued. The issuance of the Warrant and any subsequent issuance of the
Warrant Shares are not and will not be subject to any preemptive rights and,
when issued, sold, and delivered in compliance with the provisions of this
Agreement and the terms of the Warrant and in accordance with the Company's
Articles of Incorporation, as amended or restated, the Warrant and the Warrant
Shares will be validly issued, fully paid, and nonassessable, and will be free
of any liens or encumbrances; provided, however, that the Warrant and the
Warrant Shares may be subject to restrictions on transfer under state and/or
federal securities laws as set forth herein or as otherwise required by such
laws at the time a transfer is proposed.

                  4.3 Governmental Consents. All consents, approvals, orders,
or authorizations of, or registrations, qualifications, designations,
declarations, or filings with, any governmental authority, required on the part
of the Company in connection with the valid execution and delivery of this
Agreement, the offer, sale, or issuance of the Warrant and the Warrant Shares,
or the consummation of any other transaction contemplated hereby shall have
been obtained and will be effective at the Closing, except (i) for necessary
corporate action to designate and authorize a sufficient number of Warrant
Shares to affect the exercise of the Warrant and (ii) for notices required





                                      -2-
<PAGE>   11

or permitted to be filed with certain state and federal securities commissions,
which notices will be filed on a timely basis.

         5. Representations and Warranties of the Holder. The Holder hereby
represents and warrants to the Company as follows:

                  5.1 Legal Authority. It has the requisite legal power to
enter into this Agreement, to purchase the Warrant hereunder and to carry out
and perform its obligations under the terms of this Agreement.

                  5.2 Due Execution. This Agreement has been duly authorized,
executed, and delivered by it, and, upon execution and delivery by the Company,
this Agreement will be a valid and binding agreement of it.

                  5.3 Investment Representations.

                           (a) It is acquiring the Warrant for its own account,
not as nominee or agent, for investment and not with a view to, or for resale
in connection with, any distribution or public offering of the Warrant or
Warrant Shares within the meaning of the Securities Act of 1933, as amended
(the "1933 Act").

                           (b) It understands that (i) the Warrant and Warrant
Shares have not been registered under the 1933 Act by reason of a specific
exemption therefrom, that they must be held by it indefinitely, and that Holder
must, therefore, bear the economic risk of such investment indefinitely, unless
a subsequent disposition thereof is registered under the 1933 Act or is exempt
from such registration; and (ii) the Warrant and each certificate representing
the Warrant Shares will be endorsed with the following legend:

         "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE PLEDGED OR HYPOTHECATED
         IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
         SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL (WHO MAY BE COUNSEL
         TO THE COMPANY) SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
         NOT REQUIRED."

                           (c) It has been furnished with such materials and
has been given access to such information relating to the Company as it or its
qualified representative has requested and it has been afforded the opportunity
to ask questions regarding the Company and the Warrant and the Warrant Shares,
all as it has found necessary to make an informed investment decision.

                           (d) By reason of its business or financial
experience, or the business or financial experience of its professional
advisor, it has the capacity to protect its own interests in connection with
this transaction.




                                      -3-
<PAGE>   12

                           (e) If it is a corporation, partnership, trust, or
other entity, it was not formed for the specific purpose of acquiring the
Warrant or the Warrant Shares offered hereunder.

                           (f) It is an "accredited investor" as provided under
the 1933 Act and regulations adopted thereunder; and all information supplied
by such Holder to the Company with respect to his or its purchase of the
Warrant and the Warrant Shares has been and shall be true, complete, and
accurate.

         6. Miscellaneous.

                  6.1 California Corporate Securities Law. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR
SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE
IS SO EXEMPT.

                  6.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents, made and to be performed entirely within the State
of California.

                  6.3 Successors and Assigns. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto.

                  6.4 Entire Agreement. This Agreement, the Marketing Agreement
and the Exhibit hereto, and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement among the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other party in any manner by any representations, warranties, covenants, or
agreements except as specifically set forth herein or therein.

                  6.5 Separability. In case any provision of this Agreement
shall be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

                  6.6 Amendment and Waiver. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived with the
written consent of the Company and the Holder.



                                      -4-
<PAGE>   13


                  6.7 Communications. All notices or other communications
hereunder shall be in writing and shall be given by personal delivery,
confirmed facsimile, overnight courier service, or by registered or certified
mail (postage prepaid and return receipt requested) addressed as set forth
below (or at such other address as a party may designate by notice to the other
parties):

                  If to the Company:

                  E-LOAN, INC.
                  540 University Ave #350
                  Palo Alto, CA 94301

                  If to the Holder:

                  At the address indicated for the Holder on the signature
                  pages hereof

Notice sent pursuant to or required by this Agreement shall be deemed given (i)
in the case of personal delivery, on the date of such delivery, (ii) in the
case of telex or facsimile transmission, on the date on which the sender
receives confirmation by telex or facsimile transmission that such notice was
received by the addressee, provided that a copy of such transmission is
additionally sent by overnight air courier or mail as set forth in (iii) or
(iv), respectively, below; (iii) in the case of overnight air courier, on the
next business day following the day sent, with receipt confirmed by the
courier; and (iv) in the case of mailing by first class certified or registered
mail, postage prepaid, return receipt requested, on the fifth business day
following such mailing.

                  6.8 Expenses. The Company and the Holder shall each bear its
respective expenses and legal fees incurred with respect to this Agreement and
the transactions contemplated hereby.

                  6.9 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.

                  6.10 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one instrument.


                                      -5-
<PAGE>   14


         IN WITNESS WHEREOF, the Company has caused this Warrant Purchase
Agreement to be signed by its duly authorized officer.

                                 E-LOAN, INC.


                                 By: /s/ D. Galen
                                    --------------------------------------

                                 Name:   Douglas Galen
                                      ------------------------------------

                                 Title:  VP
                                       -----------------------------------

                                 DLJDIRECT.


                                 By: /s/ Lia Hecht
                                    --------------------------------------

                                 Name:   Lia Hecht
                                      ------------------------------------

                                 Title:  Vice President
                                       -----------------------------------
                                        One Pershing Plaza
                                        Jersey City, NJ 07399


                                      -6-
<PAGE>   15



                                   EXHIBIT A

                                FORM OF WARRANT


                                      E-1
<PAGE>   16



         THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
         NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE
         SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
         TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
         UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL
         SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
         SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.


                  WARRANT TO PURCHASE SERIES D PREFERRED STOCK
                                       OF
                                  E-LOAN, INC.

                          VOID AFTER SEPTEMBER 4, 2001

                  This Warrant is issued to DLJdirect, a Delaware corporation,
or its registered assigns ("Holder") by E-Loan, Inc., a California corporation
(the "Company"), on September 4, 1998 (the "Warrant Issue Date"). This Warrant
is issued pursuant to the terms of that certain Marketing Agreement, by and
between the Company and DLJdirect, dated as of the date hereof (the "Marketing
Agreement") and the Warrant Purchase Agreement, dated as of the date hereof
(the "Purchase Agreement").

         1. Purchase of Shares. Subject to the terms and conditions hereinafter
set forth and set forth in the Purchase Agreement, the Holder is entitled, upon
surrender of this Warrant at the principal office of the Company (or at such
other place as the Company shall notify the holder hereof in writing), to
purchase from the Company up to that number of fully paid and nonassessable
shares of Series D Preferred Stock of the Company, as more fully described
below, that equals the quotient obtained by dividing (a) five hundred thousand
dollars ($500,000), by (b) $9.27. The shares of Series D Preferred Stock
issuable pursuant to this Section 1 (the "Shares") shall also be subject to
adjustment pursuant to Section 8 hereof.

         2. Exercise Price. The purchase price for the Shares shall be $9.27.
Such price shall be subject to adjustment pursuant to Section 8 hereof (such
price, as adjusted from time to time, is herein referred to as the "Exercise
Price").

         3. Exercise Period. This Warrant shall become exercisable upon the
later of (i) 30 days after the date of the initial commercial launch of the
"Loan Center" as described in Section 1.1 of the Marketing Agreement and (ii)
the first to occur of (A) the closing of a Corporate Transaction (as hereafter
defined) or (B) the closing of the Company's Series D Financing; provided,
however, that this Warrant shall not become exercisable with respect to 50% of
the shares purchasable hereby unless DLJdirect shall have irrevocably elected
to extend the term of E-Loan to be the exclusive content provider of home
mortgage comparison services for an additional year in accordance with Section
11 of the Marketing Agreement. This Warrant shall remain so exercisable




<PAGE>   17

until 5:00 p.m. on September 4, 2001; provided, however, that in the event of
(a) the closing of the issuance and sale of shares of Common Stock of the
Company in the Company's first underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "IPO"), (b) the closing of the Company's sale or transfer of all or
substantially all of its assets, or (c) the closing of the acquisition of the
Company by another entity by means of merger, consolidation or other
transaction or series of related transactions, resulting in the exchange of the
outstanding shares of the Company's capital stock such that the stockholders of
the Company prior to such transaction own, directly or indirectly, less than
50% of the voting power of the surviving entity, this Warrant shall, on the
date of such event, no longer be exercisable and become null and void. In the
event of a proposed transaction of the kind described above (any of the
foregoing, a "Corporate Transaction"), the Company shall notify the holder of
the Warrant at least twenty (20) business days prior to the consummation of
such event or transaction; provided that the Board of Directors of the Company
may shorten such twenty (20) business day notice period upon its good faith
determination that a shorter period shall be required to consummate an
acquisition transaction so long as Holder has a reasonable period of time to
exercise the Warrant.

         4. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:

                  (a) the surrender of the Warrant, together with a duly
executed copy of the form of Notice of Election attached hereto, to the
Secretary of the Company at its principal offices; and

                  (b) the payment to the Company of an amount equal to the
aggregate Exercise Price for the number of Shares being purchased.

         5. Net Exercise. In lieu of exercising this Warrant pursuant to
Section 4, the Holder may elect to receive, without the payment by the Holder
of any additional consideration, shares of Series D Preferred Stock equal to
the value of this Warrant (or the portion thereof being canceled) by surrender
of this Warrant at the principal office of the Company together with notice of
such election, in which event the Company shall issue to the holder hereof a
number of shares of Series D Preferred Stock computed using the following
formula:

                                            Y (A - B)
                                            ---------
                                    X =          A

         Where:            X =      The number of shares of Series D Preferred
                                    Stock to be issued to the Holder pursuant
                                    to this net exercise;

                           Y =      The number of Shares in respect of which
                                    the net issue election is made;

                           A =      The fair market value of one share of the
                                    Series D Preferred Stock at the time the
                                    net issue election is made;

                           B =      The Exercise Price (as adjusted to the date
                                    of the net issuance).





                                      -2-
<PAGE>   18

For purposes of this Section 5, the fair market value of one share of Series D
Preferred Stock (or, to the extent all such Series D Preferred Stock has been
converted into the Company's Common Stock) as of a particular date shall be
determined as follows: (i) if traded on a securities exchange or through the
Nasdaq National Market, the value shall be deemed to be the average of the
closing prices of the securities on such exchange over the thirty (30) day
period ending three (3) days prior to the net exercise election; (ii) if traded
over-the-counter, the value shall be deemed to be the average of the closing
bid or sale prices (whichever is applicable) over the thirty (30) day period
ending three (3) days prior to the net exercise; and (iii) if there is no
active public market, the value shall be the fair market value thereof, as
determined in good faith by the Board of Directors of the Company; provided,
that, if the Warrant is being exercised upon the closing of the IPO, the value
will be the initial "Price to Public" of one share of such Series D Preferred
Stock (or Common Stock issuable upon conversion of such Series D Preferred
Stock) specified in the final prospectus with respect to such offering.

         6. Certificates for Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Shares so
purchased shall be issued as soon as practicable thereafter (with appropriate
restrictive legends, if applicable), and in any event within thirty (30) days
of the delivery of the subscription notice.

         7. Issuance of Shares. The Company covenants that the Shares, when
issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and
charges with respect to the issuance thereof.

         8. Adjustment of Exercise Price and Number of Shares. The number of
and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:

                  (a) Subdivisions, Combinations and Other Issuances. If the
Company shall at any time prior to the expiration of this Warrant subdivide its
Series D Preferred Stock, by split-up or otherwise, or combine its Series D
Preferred Stock, or issue additional shares of its Series D Preferred Stock or
Common Stock as a dividend with respect to any shares of its Series D Preferred
Stock, the number of Shares issuable on the exercise of this Warrant shall
forthwith be proportionately increased in the case of a subdivision or stock
dividend, or proportionately decreased in the case of a combination.
Appropriate adjustments shall also be made to the purchase price payable per
share, but the aggregate purchase price payable for the total number of Shares
purchasable under this Warrant (as adjusted) shall remain the same. Any
adjustment under this Section 8(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective, or as of
the record date of such dividend, or in the event that no record date is fixed,
upon the making of such dividend.

                  (b) Reclassification, Reorganization and Consolidation. In
case of any reclassification, capital reorganization, or change in the Series D
Preferred Stock of the Company (other than as a result of a subdivision,
combination, or stock dividend provided for in Section 8(a) above), then, as a
condition of such reclassification, reorganization, or change, lawful provision
shall be made, and duly executed documents evidencing the same from the Company
or its successor shall be delivered to the Holder, so that the Holder shall
have the right at any time prior to the expiration





                                      -3-
<PAGE>   19

of this Warrant to purchase, at a total price equal to that payable upon the
exercise of this Warrant, the kind and amount of shares of stock and other
securities and property receivable in connection with such reclassification,
reorganization, or change by a holder of the same number of shares of Series D
Preferred Stock as were purchasable by the Holder immediately prior to such
reclassification, reorganization, or change. In any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
so that the provisions hereof shall thereafter be applicable with respect to
any shares of stock or other securities and property deliverable upon exercise
hereof, and appropriate adjustments shall be made to the purchase price per
share payable hereunder, provided the aggregate purchase price shall remain the
same.

                  (c) Notice of Adjustment. When any adjustment is required to
be made in the number or kind of shares purchasable upon exercise of the
Warrant, or in the Warrant Price, the Company shall promptly notify the holder
of such event and of the number of shares of Series D Preferred Stock or other
securities or property thereafter purchasable upon exercise of this Warrant.

                  (d) Other Events. In case any event shall occur as to which
the provisions of Section 8(a) and Section 8(b) hereof are not strictly
applicable but the failure to make any adjustment would not, in the opinion of
the Holder of this Warrant, fairly protect the purchase rights represented by
this Warrant in accordance with the essential intent and principles of such
Sections, then, at the request of such holder, the Company and such Holder
shall appoint a mutually and reasonably acceptable arbiter which shall give an
opinion upon the adjustment to this Warrant, if any, on a basis consistent with
the essential intent and principles established in Section 8(a) and Section
8(b) hereof, necessary to preserve the purchase rights represented by this
Warrant. Upon receipt of such opinion, the Company will promptly make the
adjustments described therein. If no adjustment to this Warrant are described
therein, then such Holder shall pay the fees and expenses of such arbiter, and
otherwise the Company shall pay such fees and expenses.

         9.  No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.

         10. No Stockholder Rights. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights of a stockholder with respect to the
Shares, including (without limitation) the right to vote such Shares, receive
dividends or other distributions thereon, exercise preemptive rights or be
notified of stockholder meetings, and such holder shall not be entitled to any
notice or other communication concerning the business or affairs of the
Company. However, nothing in this Section 10 shall limit the right of the
Holder to be provided the Notices required under this Warrant or the Purchase
Agreement.

         11. Transfers of Warrant. Subject to compliance with applicable
federal and state securities laws, this Warrant and all rights hereunder are
transferable in whole or in part by the Holder to any person or entity upon
written notice to the Company. The transfer shall be recorded on the books of
the Company upon the surrender of this Warrant, properly endorsed, to the
Company at its principal offices, and the payment to the Company of all
transfer taxes and other governmental charges imposed on such transfer. In the
event of a partial transfer, the Company shall issue to the holders one or more
appropriate new warrants.




                                      -4-
<PAGE>   20

         12. Successors and Assigns. The terms and provisions of this Warrant
and the Purchase Agreement shall inure to the benefit of, and be binding upon,
the Company and the Holders hereof and their respective successors and assigns.

         13. Amendments and Waivers. Any term of this Warrant may be amended
and the observance of any term of this Warrant may be waived (either generally
or in a particular instance and either retroactively or prospectively), with
the written consent of the Company and the Holder.

         14. Notices. All notices required under this Warrant shall be deemed
to have been given or made for all purposes upon confirmation of receipt when
delivered by: (i) personal delivery, (ii) facsimile; (iii) professional
overnight courier service, or (iv) registered or certified mail. Notices to the
Company shall be sent to the principal office of the Company (or at such other
place as the Company shall notify the Holder hereof in writing). Notices to the
Holder shall be sent to the address of the Holder on the books of the Company
(or at such other place as the Holder shall notify the Company hereof in
writing).

         15. Attorneys' Fees. If any action of law or equity is necessary to
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to its reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which it may be entitled.

         16. Captions. The section and subsection headings of this Warrant are
inserted for convenience only and shall not constitute a part of this Warrant
in construing or interpreting any provision hereof.

         17. Governing Law. This Warrant shall be governed by the laws of the
State of California as applied to agreements among California residents made
and to be performed entirely within the State of California.

         IN WITNESS WHEREOF, E-Loan, Inc. caused this Warrant to be executed by
an officer thereunto duly authorized.

                                  E-Loan, Inc.

                                  /s/ D. Galen
                                  ---------------------------------------------

                                  Print Name: Douglas Galen
                                             ----------------------------------
                                  Title:      VP
                                        ---------------------------------------




                                      -5-
<PAGE>   21




                               NOTICE OF EXERCISE


To:  [CORPORATION NAME]

                  The undersigned hereby elects to [check applicable
                  subsection]:

- --------------    (a)      Purchase _______ shares of Series D Preferred Stock
                           of ______________, pursuant to the terms of the
                           attached Warrant and payment of the Exercise Price
                           per share required under such Warrant accompanies
                           this notice;

                  OR

- --------------    (b)      Exercise the attached Warrant for [all of the
                           shares] [________ of the shares] [cross out
                           inapplicable phrase] purchasable under the Warrant
                           pursuant to the net exercise provisions of Section 5
                           of such Warrant.


         The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.

                                 WARRANTHOLDER:

                                 ----------------------------------------------

                                 By:
                                    -------------------------------------------
                                              [NAME]

                Address:
                                 ----------------------------------------------

                                 ----------------------------------------------

Date:
     ---------------------------------------


Name in which shares should be registered:

- --------------------------------------------



<PAGE>   1
                                                                    EXHIBIT 10.8



                             CO-MARKETING AGREEMENT


    This Co-Marketing Agreement ("Agreement") is made and entered into as of
March 26, 1998 ("Effective Date"), by and between E-Loan Inc., a California
corporation located at 540 University Avenue, Palo Alto, CA 94301 ("E-Loan")
and E*TRADE Group, Inc., a Delaware corporation located at Four Embarcadero
Place, 2400 Geng Road, Palo Alto, CA 94303 ("E*TRADE").

    1.  Definitions.

        a. "Co-Branded Site" means the Co-Branded version of the E-Loan Site as
specified in Exhibit A attached hereto.

        b. "E*TRADE Services" means E*TRADE's electronic brokerage services and
related products available at the E*TRADE Site.

        c. "E*TRADE Site" means E*TRADE's web site located at
(http://www.etrade.com) (or any replacement or successor address).

        d. "E-Loan Services" means E-Loan's on-line mortgage brokerage services
and related products available through the E-Loan Site.

        e. "E-Loan Site" means E-Loan's web site located at
(http://www.eloan.com) (or any replacement or successor address) and all third
party Co-Branded or mirrored addresses or sites thereof.

        f. "Investor Tools Page" means the investor tools page on the E*TRADE
Site at (http://www.etrade.com/cgi- bin/cgitrade/investors).

    2.  Co-Branded Web Site; Promotion.

        a. Scope.  The parties shall undertake and perform the obligations for
the marketing and promotion of the E-Loan Services along with the E*TRADE
Services on the CoBranded Site, the E-Loan Site and E*TRADE Site, as described
in Exhibit A attached hereto.  All such promotional activity shall be subject
to the prior approval of both parties, such approval not to be unreasonably
withheld.  E-Loan shall not sell advertising to, or otherwise promote, any
other securities brokers on the Co-Branded Site.  E-Loan shall not sell any
advertising space on the ELoan Site to any third party on-line securities
brokers.  E*TRADE shall not sell advertising to, or otherwise promote, any
other multi-lender vendor or mortgage product offering on the Co-Branded Site.
E*TRADE shall not offer or sell any advertising space on the E*TRADE Site to
any third party multi-lender vendor.  E*TRADE will be included on all other
E-Loan Co-Branded sites, unless prohibited by third party agreement.  However,
upon request from E*TRADE, E-Loan agrees to remove E*TRADE from any E-Loan
Co-Branded site if so instructed by E*TRADE.
<PAGE>   2
        b. Exclusive.  E-Loan will be the exclusive multi-lender vendor
featured on the E*TRADE Site; E*TRADE will be the exclusive on-line securities
broker listed in E-Loan's Site.

        c. Customer Service and Loan Service Support.  E-Loan agrees to provide
customer service support to users accessing the E-Loan Services.  E-Loan will
provide E*TRADE with its standard customer service metrics and policies.  E-
Loan agrees to provide the same level of service to E*TRADE customers as would
be provided to other E-Loan customers.  However, in no case shall such metrics
or policies be below accepted industry standards.

        d. Restrictions.  Other than by engaging in the activities described in
Section 2.a and 2.b above, E-Loan and its employees will not (i) describe
E*TRADE's brokerage services (other than disseminating or posting promotional
or advertising materials approved in each case by E*TRADE pursuant to Section 3
below); (ii) recommend or endorse specific securities (other than by
disseminating publications or information prepared by third parties that are
responsible for such content); (iii) become involved in the financial services
offered by E*TRADE, including, without limitation, by: (A) opening,
maintaining, administering, or closing customer brokerage accounts with
E*TRADE; (B) soliciting, processing, or facilitating securities transactions
relating to customer brokerage accounts with E*TRADE; (C) extending credit to
any customer for the purpose of purchasing securities through, or carrying
securities with, E*TRADE; (D) answering E*TRADE customer inquiries or engaging
in negotiations involving brokerage accounts or securities transactions; (E)
accepting customer securities orders, selecting among broker-dealers or routing
orders to markets for E*TRADE execution; (F) handling funds or securities of
E*TRADE customers, or effecting clearance or settlement of customer securities
trades; or (G) resolving or attempting to resolve any problems, discrepancies,
or disputes involving E*TRADE customer accounts or related transactions.
E-Loan acknowledges that engaging in any of the above activities may subject
E-Loan to broker-dealer registration requirements under the Securities Exchange
Act of 1934 and applicable state law.

    3.  Licensed Marks.

        a. License to E*TRADE Marks.  Subject to all the terms and conditions
of this Agreement, E*TRADE hereby grants E-Loan a nonexclusive,
non-transferable, non-sublicensable license to use the E*TRADE Marks solely on
the E-Loan Site and Co-Branded Site, and solely in connection with the
marketing and promotion of the E-Loan Services and the E*TRADE Services.
"E*TRADE Marks" shall mean solely the E*TRADE name and logo specified in
Exhibit B hereto; provided, however, that E*TRADE, in its sole discretion from
time to time, may change the appearance and/or style of the E*TRADE Marks or
add or subtract from the list in Exhibit B, provided that, unless required
earlier by a court order or to avoid potential infringement liability, E-Loan
shall have fourteen (14) days' notice to implement any such changes.  E-Loan
hereby acknowledges and agrees that (i) the E*TRADE Marks are owned solely and
exclusively by E*TRADE, (ii) except as set forth herein, E-Loan has no rights,
title or interest in or to the E*TRADE Marks and (iii) all use of the E*TRADE
Marks by E-Loan shall inure to the benefit of E*TRADE.  E-Loan agrees not to
apply for registration of the E*TRADE Marks (or any mark confusingly similar
thereto) anywhere in the world.  E-Loan agrees that it shall not engage,


                                     -2-
<PAGE>   3
participate or otherwise become involved in any activity or course of action
that diminishes and/or tarnishes the image and/or reputation of any E*TRADE
Mark.

        b. Use and Display of E*TRADE Marks.  E-Loan acknowledges and agrees
that the presentation and image of the E*TRADE Marks should be uniform and
consistent with respect to all services, activities and products associated
with the E*TRADE Marks.  Accordingly, E-Loan agrees to use the E*TRADE Marks
solely in the manner which E*TRADE shall specify from time to time in E*TRADE's
sole discretion.  All usage by E-Loan of the E*TRADE Marks shall include the
registered trademark symbol and shall be in the following form, as appropriate:
[E*TRADE Mark](R).  All literature and materials printed, distributed or
electronically transmitted by E-Loan and containing the E*TRADE Marks shall
include the following notice:

           [E*TRADE Mark] is a registered trademark of
           E*TRADE Group, Inc.

        c. License to E-Loan Marks.  Subject to all the terms and conditions of
this Agreement, E-Loan hereby grants E*TRADE a nonexclusive, non-transferable,
non-sublicensable license to use the E-Loan Marks solely on the E*TRADE Site
and in connection with the marketing and distribution of the E*TRADE Services
to its customers.  "E-Loan Marks" shall mean solely the E-Loan trade names,
marks and logos specified in Exhibit C hereto; provided, however, that E-Loan,
in its sole discretion from time to time, may change the appearance and/or
style of the E-Loan Marks or add or subtract from the list in Exhibit C,
provided that, unless required earlier by a court order or to avoid potential
infringement liability, E*TRADE shall have fourteen (14) days' notice to
implement any such changes.  E*TRADE hereby acknowledges and agrees that, (i)
the E-Loan Marks are owned solely and exclusively by E-Loan, (ii) except as set
forth herein, E*TRADE has no rights, title or interest in or to the E-Loan
Marks and (iii) all use of the E-Loan Marks by E*TRADE shall inure to the
benefit of E-Loan.  E*TRADE agrees not to apply for registration of the E-Loan
Marks (or any mark confusingly similar thereto) anywhere in the world.  E*TRADE
agrees that it shall not engage, participate or otherwise become involved in
any activity or course of action that diminishes and/or tarnishes the image
and/or reputation of any E-Loan Mark.

        d. Use and Display of E-Loan Marks.  E*TRADE acknowledges and agrees
that the presentation and image of the E- Loan Marks should be uniform and
consistent with respect to all services, activities and products associated
with the E- Loan Marks.  Accordingly, E*TRADE agrees to use the E-Loan Marks
solely in the manner which E-Loan shall specify from time to time in E-Loan's
sole discretion.  All usage by E*TRADE of the E-Loan Marks shall include the
appropriate trademark symbol and shall be in the following form, as
appropriate:  [E-Loan Mark](R) or [E-Loan Mark](TM).  All literature and
materials printed, distributed or electronically transmitted by E-Loan and
containing the E-Loan Marks shall include the following notice:

           [E-Loan Mark] is a [registered] trademark of
           E-Loan Group, Inc.


                                     -3-
<PAGE>   4
    4.  Payment; Reports; Audit Rights.

        a. Fees.  Subject to the terms and conditions of this Agreement, E-Loan
agrees to pay E*TRADE the following fees:

                    (i) "Click-Through" Fees. E-Loan shall pay to E*TRADE [*]
        per each click-through by a user via hyperlinks (hereinafter
        "click-through") from the E*TRADE Site to the Co-Branded Site. E-Loan
        shall guarantee a monthly minimum payment of click-through fees of [*]
        to E*TRADE during such time as E-Loan is featured on the Investor Tools
        Page. Once E*TRADE moves E- Loan content to a new center (yet to be
        named) on the E*TRADE Site that includes, among other things,
        information on mortgage loans as described in Exhibit A hereto
        (hereinafter the "Financial Services Center"), E- Loan shall pay to
        E*TRADE the greater of actual click-through fees for such period or the
        following minimum click-through fees: [*]. At the end of [*] with [*]
        being defined as beginning with the date E-Loan content is moved into
        the Financial Services Center and continuing for the subsequent twelve
        month period, provided that such period may be extended up to two
        months, by the approval of both parties, in order to make up for any
        shortfall of minimum click- through fees.  At the end of [*], with [*]
        being defined as beginning at the end of [*] (including any
        extension) and continuing for the next twelve month period, provided
        that such term may be extended up to three months, by the approval of
        both parties, in order to make up for any shortfall of minimum
        click-through fees. At the end of [*] with [*] being defined as
        beginning at the end of [*] (including any extension) and continuing for
        the next twelve month period, provided that such term may be extended up
        to three months, by the approval of both parties, in order to make up
        for any shortfall of minimum click-through fees.

                    (ii) Educational Articles and Calculators.  E-Loan will
        provide to E*TRADE educational articles and calculators to E*TRADE for
        use on the E*TRADE Site and, which will be served on the E*TRADE
        server, free of charge.

                    (iii) Compensation in Connection with Loans.  When the
        regulations promulgated under the Real Estate Settlement Procedures Act
        ("RESPA") are revised to permit payments of commissions for referrals of
        loan candidates, E-Loan shall pay to E*TRADE either [*] or, if such loan
        application results in a closed loan, [*]. E-Loan shall pay to E*TRADE
        an additional [*] for each such loan that qualifies for volume rebates
        from the lender (for a total of [*] qualifying for volume rebates).
        These loan fees will be paid in lieu of the click-through fees listed in


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                     -4-
<PAGE>   5
        Section 4.a(i) above.  E-Loan shall guarantee a monthly minimum payment
        of loan fees of [*] during such time as E-Loan is featured on the
        Investor Tools Page.  Once E*TRADE moves E-Loan content to the Financial
        Services Center, E-Loan shall pay to E*TRADE the greater of the actual
        loan fees for such period or the following minimum loan fees: [*].  At
        the end of [*], such twelve month period may be extended up to two
        months, by the approval of both parties, in order to make up for any
        shortfall of minimum loan fees.  At the end of [*] each such twelve
        month period may be extended up to three months, by the approval of both
        parties, in order to make up for any shortfall of minimum loan fees.

                    (iv) Credit Reports and Services.  E-Loan shall pay to
        E*TRADE [*] of all revenue E-Loan earns from the sale of three agency
        credit reports, single agency credit reports, and subscriptions to
        credit monitoring services sold through the Co-Branded Site.

                    (v) New Services.  E-Loan and E*TRADE agree to negotiate in
        good faith to determine the terms and conditions for sharing the
        revenue generated from any new services, such as car loans, that become
        features on the Co-Branded Site.

        b. Impression Guarantees.  E*TRADE guarantees to provide the following
page impressions, with impressions being defined as each time a user views a
page on the E*TRADE site featuring the E-Loan Services, as follows: [*] provided
that E-Loan's sole remedy for E*TRADE's failure to meet the foregoing guarantees
shall be the right to terminate this Agreement pursuant to Section 6.b(vi)
below.

        c. Advertising Revenues.  If the parties decide to have third party
advertising on the Co-Branded Site or in E- Loan articles or calculators hosted
by E*TRADE, revenues generated from advertising sales will be shared as
follows:

                    (i) If E*TRADE sells and serves the advertisement, E*TRADE
        shall retain a commission of [*] of the total advertising revenues
        therefrom. Advertising revenue remaining after the commission and other
        required third party fees have been paid will be split equally between
        E*TRADE and E- Loan.

                    (ii) If E-Loan sells and serves the advertisement, E-Loans
        shall retain a commission of [*] of the total advertising revenues
        therefrom.  Advertising revenue remaining after the commission and other
        required third party fees have been paid will be split equally between
        E*TRADE and E-Loan.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                     -5-
<PAGE>   6
                    (iii) If a third party sells and serves the advertisement,
        advertising revenue remaining after the commission to such third party
        and other related fees have been paid will be split equally between
        E*TRADE and E-Loan.

    All advertising activity hereunder shall be subject to the prior approval
of both parties, such approval not to be unreasonably withheld.

        d. Reports and Payment.  The parties shall deliver to one another the
following reports and payments:

                    (i) E*TRADE Reports and Payments.  Within ten (10) days
        following the end of each month, E*TRADE shall furnish E-Loan with a
        report detailing (1) the number of impressions and sources, if
        available, for pages on the E*TRADE Site with links to E-Loan Services
        (2) the number of click-throughs from each link at the E*TRADE Site to
        the Co-Branded Site, and (3) all advertisements that E*TRADE has sold
        and served for the Co-Branded Site.  All fees owning to one party from
        the other pursuant to such report shall be paid within thirty (30) days
        after the end of each month in which they accrue.

                    (ii) E-Loan Reports and Payments.  Within thirty (30) days
        following the end of each month, E-Loan shall furnish E*TRADE with a
        report detailing (1) all advertisements that are sold and/or served
        during such month pursuant to Section 4.c above, whether sold by
        E-Loan, E*TRADE or any third party, (2) the number of three party
        credit reports, single agency credit reports, and subscriptions to
        credit monitoring services sold through the Co-Branded Site, and (3)
        when referral payments are permitted under RESPA, the number of loan
        applications, closed loans, and closed loans qualifying for volume
        discounts from the lender during such month.  Along with each such
        report, E-Loan shall submit all payments due to E*TRADE, including
        payments for click-through fees or loan referral payments, whichever is
        applicable, along with the basis for calculating such payments for each
        such month.

        e. Audit Rights.  Each party shall keep, maintain and preserve for at
least two (2) years following termination or expiration of the term of this
Agreement or any renewal(s) thereof, accurate records relating to such party's
payment obligations hereunder.  Such records shall be maintained as
confidential, but shall be available for inspection and audit as provided
herein.  Each party shall have the right at least once per calendar year to
have an independent public accountant, reasonably acceptable to the other
party, examine such other party's relevant books, records and accounts for the
purpose of verifying the accuracy of payments made to the other party as
required under this Agreement.  Each party acknowledges and agrees that such
accountant shall not have access to the books, records, and accounts relating
to other products or services except as such books, records and accounts also
directly relate to the payments due hereunder.  Each audit will be conducted at
the audited party's place of business, or other place agreed to by E-Loan and


                                     -6-
<PAGE>   7
E*TRADE, during the audited party's normal business hours and with at least
five (5) business days prior written notice to the audited party.  The auditing
party shall pay the fees and expenses of the auditor for the examination;
provided that should any examination disclose a greater than five percent (5%)
shortfall in the payments due the auditing party for the period being audited,
the audited party shall pay the reasonable fees and expenses of the auditor for
that examination.

    5.  Ownership.  Each party or their respective licensors and third party
information and content providers retain all rights, title and interest in and
to all of the information, content, data designs, materials and all copyrights,
patent rights, trademarks rights and other proprietary rights thereto provided
by such Party pursuant to this Agreement.  Except as expressly provided herein,
no other right or license with respect to any copyrights, patent rights,
trademark rights or other proprietary rights is granted under this Agreement.
All rights not expressly granted hereunder by a party are expressly reserved to
such party and its licensors and information and content providers.

    6.  Term and Termination.


        a. This Agreement shall commence on the Effective Date ad shall remain
in full force and effect (unless terminated earlier as provided below) for an
initial term of three (3) years.


        b. This Agreement may be terminated by a party for cause immediately by
written notice upon the occurrence of any of the following events:

                    (i) If the other ceases to do business, or otherwise
        terminates its business operations, except as a result of an assignment
        permitted under Section 13.a below; or

                    (ii) If the other shall fail to promptly secure or renew
        any license, registration, permit, authorization or approval for the
        conduct of its business in the manner contemplated by this Agreement or
        if any such license, registration, permit, authorization or approval is
        revoked or suspended and not reinstated within sixty (60) days; or

                    (iii) If the other materially breaches any material
        provision of this Agreement and fails to cure substantially such breach
        within thirty (30) days of written notice describing the breach,
        excepting a breach of Section 10, in which case the other party shall
        have the right to immediately terminate upon written notice to the
        breaching party; or

                    (iv) Effective immediately and without notice if the other
        becomes insolvent or seeks protection under any bankruptcy,
        receivership, trust deed, creditors arrangement, composition or
        comparable proceeding, or if any such proceeding is instituted against
        the other (and not dismissed within ninety (90) days).


                                     -7-
<PAGE>   8
                    (v) E-Loan is unable to meet the guaranteed annual
        (including extension periods) click-throughs as stated in Section 4.a,
        E*TRADE shall have the right to terminate this Agreement with 30 days
        written notice.

                    (vi) E*TRADE is unable to provide the guaranteed annual
        (including extension periods) impressions as stated in Section 4.b, and
        such shortfall prevents E-Loan from meeting its guaranteed annual
        click-throughs as stated in Section 4.a, E-Loan shall have the right to
        terminate this Agreement with 30 days written notice.

                    (vii) E-Loan does not meet the service level standards as
        specified in Exhibit D to this Agreement for a period of 3 consecutive
        months or 3 out of 6 months.  In such event, E*TRADE shall have the
        right to immediately terminate this Agreement upon written notice.

        c. Survival.  Sections 4.d and 5 through and including 13, all accrued
payment obligations and, except as otherwise expressly provided herein, any
right of action for breach of this Agreement prior to termination shall survive
any termination of this Agreement.  Furthermore, upon termination or expiration
of this Agreement, the Co-Branded Site shall be discontinued and the licenses
and obligations in Sections 2 and 3 shall cease.

    7.  Warranty; Disclaimer.  Each party represents and agrees that any
information, content or other materials or services provided, uploaded or
transmitted by or for it to the other party or any of its customers or
licensees will not, to the best actual knowledge of the providing party (a)
violate any local, state, federal or other law or regulation, (b) contain any
libelous, defamatory, disparaging, pornographic or obscene materials, (c)
contain, or introduce to any system or database of the other party or any of
its customers or licensees, any virus or similar destructive programs, codes,
routines or algorithms or other materials that will interfere with use of such
databases, systems, or networks or will cause any system, network or database
to become erased, contaminated, inoperable or otherwise incapable of being used
in the manner in which they were used prior to introduction of such materials
(collectively "Viruses"), (d) infringe any copyright, trademark or other
proprietary right of any person or (e) give rise to any civil liability.  Each
party agrees that it will only use computer systems or services employing
reasonable means to check for and prevent (i) the spread of Viruses and (ii)
use or access by unauthorized persons.  Except for the foregoing, NEITHER PARTY
MAKES ANY WARRANTIES TO ANY PERSON OR ENTITY WITH RESPECT TO ANY INFORMATION,
CONTENT OR OTHER MATERIALS PROVIDED OR MADE AVAILABLE BY IT HEREUNDER AND
DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

    8.  Indemnification.  Each party (the "Indemnitor") shall defend or settle
at its expense a claim or suit against the other party (the "Indemnitee"), its
sublicensees, distributors, and end users arising out of or in connection with
an assertion that the information, content or other


                                     -8-
<PAGE>   9
materials or services provided or made available by the Indemnitor or the use
thereof as specifically authorized by the Indemnitor, infringe any copyright or
trademark rights of any third party, or are a misappropriation of any third
party's trade secret, or contain any libelous, defamatory, disparaging,
pornographic or obscene materials.  The Indemnitor shall indemnify and hold
harmless the Indemnitee against and from damages, costs, and attorneys' fees,
if any, incurred in defending and/or resolving such suit; and in addition,
E-Loan will indemnify and hold harmless E*TRADE against and from damages,
costs, and attorneys' fees, if any, incurred as a result of any claims for
violations of RESPA rules or regulations relating to transactions under this
Agreement; provided that (a) the Indemnitor is promptly notified in writing of
such claim or suit, (b) the Indemnitor shall have the sole control of the
defense and/or settlement thereof, (c) the Indemnitee furnishes to the
Indemnitor, on request, information available to the Indemnitee for such
defense, and (d) the Indemnitee cooperates in any defense and/or settlement
thereof as long as the Indemnitor pays all of the Indemnitee's reasonable out
of pocket expenses and attorneys' fees.  The Indemnitee shall not admit any
such claim without prior consent of the Indemnitor.

    9.  Limited Liability.  EXCEPT AS OTHERWISE PROVIDED BELOW, AND
NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER PARTY
SHALL BE LIABLE OR OBLIGATED UNDER ANY SECTION OF THIS AGREEMENT OR UNDER
CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR
ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS OR COST OF PROCUREMENT
OF SUBSTITUTE GOODS OR SERVICES.  THE LIMITATIONS IN THIS SECTION 9 SHALL NOT
APPLY TO ANY BREACH OF SECTION 10.

    10. Confidential Information.

        a. Each party ("Receiving Party") agrees to keep confidential and not
disclose or use except in performance of its obligations under this Agreement,
confidential or proprietary information related to the other party's
("Disclosing Party") technology or business that the Receiving Party learns in
connection with this Agreement and any other information received from the
other, including without limitation, to the extent previously, currently or
subsequently disclosed to the Receiving Party hereunder or otherwise:
information relating to products or technology of the Disclosing Party or the
properties, composition, structure, use or processing thereof, or systems
therefor, or to the Disclosing Party's business (including, without limitation,
computer programs, code, algorithms, schematics, data, know- how, processes,
ideas, inventions (whether patentable or not), names and expertise of employees
and consultants, all information relating to customers and customer
transactions and other technical, business, financial, customer and product
development plans, forecasts, strategies and information), all of the
foregoing, "Confidential Information").  Neither party shall disclose the terms
of this Agreement to any third party without the prior written consent of the
other party.  Each party shall use reasonable precautions to protect the
other's Confidential Information and employ at least those precautions that
such party employs to protect its own confidential or proprietary information.
"Confidential Information" shall not include information the Receiving Party
can document (a) is in or (through no improper action or inaction by the
Receiving Party or any affiliate, agent or employee) enters the


                                     -9-
<PAGE>   10

public domain (and is readily available without substantial effort), or (b) was
rightfully in its possession or known by it prior to receipt from the
Disclosing Party, or (c) was rightfully disclosed to it by another person
without restriction, (d) was independently developed by it by persons without
access to such information and without use of any Confidential Information of
the Disclosing Party or (e) is required to be disclosed to a governmental
entity or agency in connection with seeking any governmental or regulatory
approval, or pursuant to the lawful requirement or request of a governmental
entity or agency, provided that reasonable measures are taken to guard against
further disclosure.

        b. The Receiving Party acknowledges and agrees that due to the unique
nature of the Disclosing Party's Confidential Information, there can be no
adequate remedy at law for any breach of its obligations hereunder, that any
such breach may allow the Receiving Party or third parties to unfairly compete
with the Disclosing Party resulting in irreparable harm to the Disclosing
Party, and therefore, that upon any such breach or any threat thereof, the
Disclosing Party shall be entitled to appropriate equitable relief in addition
to whatever remedies it might have at law and to be indemnified by the
Receiving Party from any loss or harm, including, without limitation, lost
profits and attorney's fees, in connection with any breach or enforcement of
the Receiving Party's obligations hereunder or the unauthorized use or release
of any such Confidential Information.  The Receiving Party will notify the
Disclosing Party in writing immediately upon the occurrence of any such
unauthorized release or other breach.  Any breach of this Section 10 will
constitute a material breach of this Agreement.

    11. Relationship of Parties.  The parties hereto expressly understand and
agree that each party is an independent contractor in the performance of each
and every part of this Agreement, is solely responsible for all of its
employees and agents and its labor costs and expenses arising in connection
therewith.  Neither party nor its agents or employees are the representatives
of the other party for any purpose and neither party has the power or authority
as agent, employee or any other capacity to represent, act for, bind or
otherwise create or assume any obligation on behalf of the other party for any
purpose whatsoever.

    12. Notices.  Notices under this Agreement shall be sufficient only if
personally delivered, delivered by a major commercial rapid delivery courier
service or mailed, postage or charges prepaid, by certified or registered mail,
return receipt requested to a party at its addresses set forth on the first
page above or as amended by notice pursuant to this Section.  If not received
sooner, notice by mail shall be deemed received five (5) days after deposit in
the U.S. mails.

    13. Miscellaneous.

        a. Prohibition Against Assignment.  Neither this Agreement nor any
rights, licenses or obligations hereunder, may be assigned by either party
without the prior written approval of the non-assigning party.  Notwithstanding
the foregoing, either party may assign this Agreement to any acquiror of all or
of substantially all of such party's equity securities, assets or business
relating to the subject matter of this Agreement.  Any attempted assignment in
violation of


                                     -10-
<PAGE>   11
this Section will be void and without effect.  Subject to the foregoing, this
Agreement will benefit and bind the parties' successors and assigns.

        b. Applicable Law; Attorneys' Fees.  This Agreement shall be governed
by and construed in accordance with the laws of the State of California without
reference to conflict of law principles thereof.  In any action to enforce this
Agreement the prevailing party will be entitled to costs and attorneys' fees.

        c. Entire Agreement.  This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior discussions, documents, agreements and prior course of dealing, and
shall not be effective until signed by both parties.

        d. Amendment and Waiver.  Except as otherwise expressly provided
herein, any provision of this Agreement may be amended or modified and the
observance of any provision of this Agreement may be waived (either generally
or any particular instance and either retroactively or prospectively) only with
the written consent of the parties.  The failure of either party to enforce its
rights under this Agreement at any time for any period shall not be construed
as a waiver of such rights.

        e. Severability.  In the event that any of the provisions of this
Agreement shall be held by a court or other tribunal of competent jurisdiction
to be unenforceable, such provisions shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain in full
force and effect and enforceable.

        f. Publicity.  Any press releases in connection with this Agreement
shall be subject to the prior written mutual approval of the parties.

        g. Counterparts.  This Agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.

        h. Third Party Beneficiaries.  E*TRADE's and E-Loan's third party
licensors and information providers are intended beneficiaries of this
Agreement.

        i. Headings.  Headings and captions are for convenience only and are
not to be used in the interpretation of this Agreement.


                                     -11-
<PAGE>   12
    IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.  All signed copies of this Agreement shall be deemed originals.

                                        E-LOAN INC.

                                        By: /s/ Chris Larsen
                                           ------------------------------------
                                        Name:   Chris Larsen
                                             ----------------------------------
                                        Title:  President
                                              ---------------------------------

                                        E*TRADE GROUP, INC.
                                        By: /s/ Judy Balint
                                           ------------------------------------
                                        Name:   Judy Balint
                                             ----------------------------------
                                        Title:  Senior Vice President
                                              ---------------------------------


                                     -12-
<PAGE>   13
                                   EXHIBIT A

                        E-Loan's Promotional Obligations

         Pursuant to Section 2.a of the Agreement, E-Loan's promotional efforts
and obligations shall include but are not limited to the following:

         1. Placement of E*TRADE Content.  E-Loan shall feature the E*TRADE's
         Marks, text descriptions of the E*TRADE Services and hyperlinks to the
         E*TRADE Site with prominent display, as agreed upon by the parties, on
         the "Online Resources" area (http://www.eloan.com/cgi-bin/resources)
         or similar area of all versions of the E-Loan Site, including without
         limitation, third party Co-Branded and mirrored versions of the E-Loan
         Site, so long as such placement is not required to be excluded by the
         third party.  Such logos, content and hyperlinks will be featured with
         prominence no less than that provided to other financial service
         companies who may, over time, be listed in the E-Loan's Online
         Resources area.  E-Loan shall use materials and content provided by
         E*TRADE for such promotion.  E*TRADE shall have the right to the
         review and prior approval of all uses of the E*TRADE Marks and
         content, with such approval not unreasonably withheld.

         2. Co-Branded Site.  E-Loan shall develop and host a Co-Branded
         version of the E-Loan Site which shall include, without limitation,
         E-Loan's search engine and process to view, search, monitor, qualify
         and apply for a loan, as well as information to aid the consumer with
         the loan selection and financing process ("Co-Branded Site").  The
         Co-Branded Site shall be available and promoted only to customers from
         the E*TRADE Site and shall be framed by E*TRADE and will include
         E*TRADE's logo, navigation buttons and hyperlinks back to the E*TRADE
         Site. E*TRADE shall have the right to the review and prior approval of
         the co-branding and all uses of the E*TRADE Marks and content, with
         such approval not unreasonably withheld.

         3. Promotion of the relationship created by this Agreement through a
         joint press release and in other appropriate promotional materials and
         campaigns mutually agreed upon by the parties.

E*TRADE's Promotional Obligations

E*TRADE's promotional efforts will include, but are not limited to the
following:

         1. E*TRADE will initially feature a description of E-Loan and the
         E-Loan Services and a hyperlink to the Co- Branded Site on the Investor
         tools page (http://www.etrade.com/cgi-bin/cgitrade/investors) of the
         E*TRADE Site.  By June 1998, E*TRADE will create a center on the
         E*TRADE Site that will include information on mortgage loans.  E-Loan
         will receive a premium position in this center that will serve as the
         access point to the Co-Branded Site.  This position will, at minimum,
         include space for an E-Loan logo and a brief text description.


                                     -13-
<PAGE>   14
         2. E*TRADE will provide its standard level of partner marketing
         support, which includes:

            -    a joint press release with E-Loan announcing the relationship
                 and other promotions as appropriate.

            -    inclusion of E-Loan in the quarterly E*TRADE Edge newsletter.

            -    a headline at the top of the Main Menu page
                 (http://www.etrade.com/cgi- bin/cgitrade/MainMenu) for a
                 period of no less than one week within one month of the move
                 of E- Loan's content to the Financial Services Center.

         These marketing activities will include use of content provided by
E-Loan for such purposes, provided that E- Loan shall have the right to review
and prior approval of such use of E-Loan content, such approval shall not be
unreasonably withheld.

         3. E*TRADE shall utilize excess banner inventory to promote the
         Financial Services Center.


                                     -14-
<PAGE>   15
                                   EXHIBIT B

                                 E*TRADE Marks


         E*TRADE(R)E*TRADE Securities, Inc. (R)

         E*TRADE Group, Inc.(R)

         TELE*MASTER (R)

         Someday, we'll all invest this way.SM

         Personal Market Page SM


         E*TRADE Logo(R)



                                     -15-
<PAGE>   16
                                   EXHIBIT C

                                  E-Loan Marks



                                     -16-
<PAGE>   17
                                   EXHIBIT D


1.  PERFORMANCE.

a)  Average less than [*] of requests.  Measures server response time only, not
     network transmission time.

b)  Average [*] up time.

c)  Post an approved message in the event of a system outage.

2.  MONITORING/REPORTING

a)  Provide details on the method used to monitor performance times.

b)  Provide weekly and monthly reporting which details server up time with the
    following details per period:

       o   average response

       o   actual daily response time detail

       o   average server up time

       o   actual daily up time

This information will be emailed to the appropriate contact within the E*TRADE
Information Systems Division on Monday of each week for the previous week's
reports and the first working day of each month for the previous month's
reports.

3.  ESCALATION PROCEDURES

a)  Notify E*TRADE via the following email addresses in case of a service
    outage:

       o   [email protected]

       o   [email protected]

b)  Notify E*TRADE within 5 minutes of a service outage.  Status information to
    include:

       o   reason for the outage.

       o   ETA for service restoral.

c)  If E*TRADE experiences a service outage and has not been notified by email
    by E-Loan, E*TRADE will contact (insert E-Loan contact name) at E-Loan at
    (insert E-Loan contact phone number) and will be given the information
    listed in 3.b.

d)  Continue to notify E*TRADE with updated status for the duration of the
    outage.

e)  Provided a post incident summary.  This summary should include:

       o   the cause of the problem.

       o   method used to correct the problem.

       o   measures E-Loan will take to prevent further occurrences.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                    -17-
<PAGE>   18

4.  BUSINESS RESUMPTION

a)  E-Loan must prove the ability to switch processing from the primary server
    to a hot backup server within 10 minutes.  Testing of this procedure will
    be conducted as requested by E*TRADE on a designated weekend by both E-Loan
    and E*TRADE personnel.

b)  Perform an analysis that documents all of the single points of failure in
    the E-Loan network and system configuration.  Include network components
    such as routers, hardware and software components.

c)  Provide geographic redundancy to primary server within 2 months from the
    date of the effective date of the Co-Marketing Agreement between E*TRADE
    and E-Loan.

d)  Eliminate all of the single points of failure within the E-Loan domain
    within 3 months from the effective date of the Co-Marketing Agreement
    between E*TRADE and E-Loan.

5.  REVENUE IMPACT RECOUPMENT

a)  In the event that E-Loan fails to meet the performance objectives defined
    in Section 1.a), a penalty of [*] will be due E*TRADE.

b)  In the event that E-Loan fails to meet the performance objectives defined
    in Section 1.b), E-Loan will credit E*TRADE a prorated amount of the
    monthly service fee as compensation for the service outage.  The
    calculation for this credit will be as follows:  The monthly fee as
    specified in Section 4.a.(i) divided by 720 hours (30 days per month times
    24 hours per day) times the total time of the outage.

c)  In the event that E-Loan fails to meet the performance objectives defined
    in Section 1.c), a penalty of [*] will be due E*TRADE.

d)  These penalties will be credited to the month's billing in which the
    performance failure occurred.

e)  Failure by E-Loan to meet these performance objectives for 3 consecutive
    months or 3 out of 6 months shall constitute a breach of this Agreement and
    E*TRADE will have the right to terminate immediately after providing
    written notice to E-Loan of such intent.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                     -18-
<PAGE>   19
                                  [LOGO PAGE]






<PAGE>   1
                                                                    EXHIBIT 10.9

                               MARKETING AGREEMENT

         This Marketing Agreement is entered into as of February 8, 1999
("Contract Date") by and between MarketWatch.com, Inc., a Delaware corporation
having an office at 825 Battery Street, San Francisco, CA 94111 ("MarketWatch")
and E-LOAN, Inc., a California corporation having an office at 540 University
Avenue, Palo Alto, California 94301 ("E-LOAN"). The Launch Date of this
Agreement shall be the date the program described in the Marketing Agreement is
made available to the public ("Launch Date").

         Whereas, MarketWatch is engaged in providing news, expert analysis and
market data for the investing community via its website located at
cbs.marketwatch.com; and

         Whereas, E-LOAN is engaged in marketing mortgage services and related
services via the Internet, including, but not limited to attracting visitors to
E-LOAN's website located at www.eloan.com, providing visitors with a variety of
mortgage loan options, and displaying competitive products in the market for
various types of loans; and

         Whereas, E-LOAN is also engaged in providing various services, goods
and facilities to companies on the Internet, including, but not limited to
website design, technology support and troubleshooting, maintenance of hardware
and software configurations, maintenance of communication links and equipment,
licensing of its brand name, trademarks and service marks; and

         Whereas MarketWatch and E-LOAN wish to develop a program ("Program")
for the purpose of which will be to market E-LOAN's loan products to visitors to
MarketWatch's website;

         Now, therefore, in consideration of the mutual promises contained
herein, the parties hereby agree as follows:

1.       The Program.

         (A)            As soon as possible after the Contract Date, E-LOAN will
              create and host (at no charge to MarketWatch) a Loan Center
              ("Loan Center") for MarketWatch that will have the MarketWatch
              "look and feel" with a graphical reference to E-LOAN. The Loan
              Center will contain various hyperlinks to mortgage tools,
              services and articles provided by E-LOAN for use by
              MarketWatch visitors. All tools, services and articles
              provided by E-LOAN will be co-branded and mutually agreed
              upon.

         (B)            MarketWatch will place hyperlinks to the Loan Center
              reasonably acceptable to MarketWatch as set forth below;

              (i)            The MarketWatch Front Page, left-side navigation
                        bar.

                                        1


<PAGE>   2


              (ii)           Additional hyperlinks to the Loan Center will be
                        added to the bottom of all articles relating to interest
                        rates, real estate or additional articles that
                        MarketWatch deems appropriate.

              (iii)          MarketWatch will provide E-LOAN with [*] ROS
                        banner advertisements each month of the first year of
                        the Agreement. Should this Agreement enter into a
                        second year, both parties will mutually agree in
                        advance of the second year upon the number of banner
                        advertisements E-LOAN will receive each month.

              (iv)           MarketWatch will promote the Loan Center to its
                        e-mail member base no less than once per quarter.
                        Both parties will mutually agree upon the content
                        contained in each e-mail.

              (v)            MarketWatch will offer its portfolio members the
                        capability to include a customized module, the E-LOAN
                        Mortgage Tracker, as part of the portfolio service.

         (C)            MarketWatch guarantees a minimum of [*] page views
              delivered containing hyperlinks to the Loan Center for the first
              year of this Agreement ("Minimum Guarantee"). Should this
              Agreement enter into a second year, both parties will mutually
              agree upon a Minimum Guarantee. In the event that MarketWatch does
              not meet the Minimum Guarantee set forth above, the Agreement will
              be extended until the Minimum Guarantee is met.

         (D)            Within sixty (60) days after execution of this
              Agreement, MarketWatch will develop or otherwise make
              available new services or features for MarketWatch visitors
              which will include, but are not limited to, a "bond area" and
              a "taxation area", as reasonably defined by MarketWatch.
              Subject to any limitations arising from any existing
              agreements, MarketWatch will provide hyperlinks to the Loan
              Center and further integration within these areas. All
              hyperlinks and integration will be mutually agreed upon.

         (E)            In the event that MarketWatch plans to develop or modify
              a service on its site which will have as its primary feature
              mortgages, real estate or mortgage interest rates, MarketWatch
              will notify E-LOAN in advance on a confidential basis to allow
              discussion about the possible provision of such services by
              E-LOAN. MarketWatch agrees to discuss such possible provision
              of services by E-LOAN; provided that neither MarketWatch nor
              E-LOAN will be obligated to contract for such services unless
              agreed by both parties in detail in writing.

         (F)            E-LOAN will ensure that MarketWatch has control over all
              ads that appear on the Loan Center, subject to Section 5.
              MarketWatch will have the sole right to collect revenue from
              such ads.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                        2


<PAGE>   3


2.       Compensation.

         (A)            E-LOAN will compensate MarketWatch for setting up this
              marketing agreement in the nonrefundable amount of [*] per month
              for the first year of this Agreement ("Monthly Fee"), payable in
              advance of each such month. The Monthly Fee is not based on
              MarketWatch providing loan origination services, rather, this fee
              is to compensate MarketWatch for the advertising aspect inherent
              in the links it will be providing E-LOAN.

         (B)            Forty five (45) days prior to the end of the first year
              of this Agreement, both parties shall have the right to
              re-evaluate the fair market value of the goods and services
              being provided by MarketWatch and notify the other party
              should they wish to amend the Monthly Fee. If both parties
              cannot come to an agreement on the amended Monthly Fee, this
              Agreement will be terminated upon the expiration of the first
              year's term.

         (C)            In addition to the Monthly Fee, E-LOAN will compensate
              MarketWatch [*] for each "Lead", defined as a complete loan
              application submitted through the Loan Center from an
              applicant who reached the Loan Center via the MarketWatch
              website, in excess of [*] Leads in the first year. Should this
              Agreement enter into a second year, both parties will mutually
              agree in advance of the commencement of such second year, upon
              a new fee per Lead.

         (D)            The Monthly Fee shall be paid to MarketWatch within
              thirty (30) business days after the beginning of each
              three-month period. The parties acknowledge and agree that the
              Monthly Fee reflects the reasonable and fair market value of
              the marketing services to be provided to E-LOAN by MarketWatch
              under the Program.

3.       Term and Termination.


         (A)            Initial and Renewal Terms. The term of this Agreement
              shall be for a period of two (2) years commencing on the Launch
              Date, unless earlier terminated in accordance with the provisions
              of this Section 3 or 2(B) above. Upon expiration of the initial
              two-year term, the Agreement shall automatically renew for
              additional one-year periods unless and until terminated by a
              45-day written notice from the terminating party to the other
              party. The initial and any renewal terms are referred to
              collectively as the "Term."


         (B)            Termination by the Parties. Both parties may terminate
              this Agreement (1) in the event that either party fails to
              substantially perform its obligations to each other hereunder,
              upon 30 days written notice from the terminating party to the
              other party specifying the default and providing 30 days to
              cure the default, or (2) in the event that either party
              discontinues its business, becomes insolvent or in the event of
              its bankruptcy.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                        3


<PAGE>   4




         (C)            Rights and Obligations Following Termination. Following
              termination of this Agreement for any reason, (1) E-LOAN shall
              continue to process, in due course, any mortgage loan
              applications submitted by consumers prior to termination and
              (2) E-LOAN's obligation to pay any then-due Monthly Fees will
              be pro-rated as of the date of termination. In addition,
              Sections 6 through 10 and 12 through 19 will survive
              termination of this Agreement for any reason.

4.       Reporting.

         (A)            Within fifteen (15) days after the last day of each
              calendar month, MarketWatch-will provide E-LOAN with a monthly
              report of user traffic to include the number of impressions,
              click-through rates and page views for any links, banner
              advertising or other promotions provided by MarketWatch to the
              Loan Center and E-LOAN.

         (B)            Within fifteen (15) days after the last day of each
              calendar month, E-LOAN will provide MarketWatch with a monthly
              report of users and applications received from the Loan Center.

5.       Exclusivity. During the term of this Agreement, E-LOAN will be the
         exclusive, integrated mortgage company of MarketWatch. No other
         mortgage lending services will be offered on the Loan Center other than
         E-LOAN. This does not limit MarketWatch from selling banner
         advertisements, on a cost per thousand or any other basis, to other
         mortgage providers; except that MarketWatch is prohibited from selling
         banner advertisements, sponsorships or other forms of advertisements to
         other mortgage providers on the Loan Center.

6.       Relationship. The relationship between MarketWatch and E-LOAN shall be
         that of independent contractors and neither party shall be or represent
         itself to be an agent, employee, partner or joint venturer of the
         other, nor shall either party have or represent itself to have any
         power or authority to act for, bind or commit the other.

7.       Severability. If any provision of this Agreement is held invalid,
         illegal or in conflict with any applicable state or federal law or
         regulation, such law or regulation shall control, to the extent of such
         conflict, without affecting the remaining portions of this Agreement.

8.       Representations and Warranties.

         (A)            Authority/Legal Actions. MarketWatch is a corporation
              duly organized, validly existing and in good standing under the
              laws of the State of Delaware with full corporate power and
              authority to transact any and all business contemplated by this
              Agreement and it possesses all requisite authority, power,
              licenses, permits and franchises to conduct its business as
              presently conducted. Its execution,

                                        4


<PAGE>   5


              delivery and compliance with its obligations under the terms of
              this Agreement are not prohibited or restricted by any government
              agency. There is no claim, action, suit, proceeding or
              investigation pending or, to the best of MarketWatch's knowledge,
              threatened against it or against any of its principal officers,
              directors or key employees, which, either in any one instance or
              in the aggregate, may result in any adverse change in the
              business, operations, financial condition, properties or assets
              of MarketWatch, or in any impairment of the right or ability of
              MarketWatch to carry on its business substantially as now
              conducted through its existing management group, or in any
              material liability on the part of MarketWatch, or which would
              draw into question the validity of this Agreement.

         (B)            MarketWatch's Compliance. MarketWatch website format,
              information, content and the marketing and use thereof by
              MarketWatch shall be in full compliance with all applicable
              federal and state laws. MarketWatch has obtained, or will have
              obtained in connection with the transactions contemplated by this
              Agreement, all necessary federal and state approvals in
              connection with operation and ownership of its website and the
              content thereof. The Privacy Notices and Privacy Policies of
              MarketWatch website shall be consistent with the Federal Trade
              Commission's procedure or rules, and comply with acceptable trade
              practices.

         (C)            E-LOAN's Compliance. E-LOAN's website format,
              information, content and marketing and use thereof by E-LOAN shall
              be in full compliance with all applicable federal and state laws.
              E-LOAN has obtained, or will have obtained in connection with the
              transactions contemplated by this Agreement, all necessary federal
              and state approvals in connection with operation and ownership of
              its website and the content thereof. The Privacy Notices and
              Privacy Policies of E-LOAN's website shall be consistent with the
              Federal Trade Commission's procedure or rules, and comply with
              acceptable trade practices.

         (D)            Execution/Conflict with Existing Laws or Contracts. The
              parties have taken all necessary action to authorize their
              respective execution, delivery and performance of this Agreement.
              The execution and delivery of this Agreement and the performance
              of the obligations of the respective parties hereunder will not
              (i) conflict with or violate the Certificate of Incorporation or
              By-laws of either party, or any provision of any law or regulation
              or any decree, demand or order to which either party is subject,
              or (ii) conflict with or result in a breach of or constitute a
              default (or an event which, with notice or lapse of time, or
              both, would constitute a default) under any of the terms,
              conditions or provisions of any agreement or instrument to which
              either party is a party or by which it is bound, or any order or
              decree applicable to either party, or result in the creation or
              imposition of any lien on any of their assets or property.

                                        5

<PAGE>   6


         (E)            Noninfringing Content. All content provided by E-LOAN to
              MarketWatch or any third party in connection with this Agreement
              which is the subject of any intellectual property right(s) of any
              third party(s), including but not limited to and copyright and
              trademark rights, and the use of such content by MarketWatch and
              third parties as contemplated in this Agreement, will be licensed
              or otherwise permitted by the owner(s) of such intellectual
              property right(s) and will not infringe such intellectual property
              rights in any way.

9.       Indemnification/Hold Harmless.

         (A)            E-LOAN agrees to indemnify, defend and hold MarketWatch
              harmless from and against any and all claims, suits, actions,
              liability, losses, expenses or damages which may hereafter arise,
              which MarketWatch, its affiliates, directors, officers, agents or
              employees may sustain due to, or arising out of any breach of any
              representation or warranty herein, or arising out of any act or
              omission by E-LOAN, its affiliates, officers, agents,
              representatives or employees in connection with this Agreement.
              However, the above indemnification shall not provide coverage for
              (a) any claim, suit, action, liability, loss, expense or damage to
              the extent resulting from an act or omission of MarketWatch or
              (b) the amount by which any cost, fee, expense or loss associated
              with any of the foregoing were increased as a result of an act or
              omission on the part of MarketWatch. As a condition of the
              foregoing indemnity obligation, MarketWatch agrees to give E-LOAN
              reasonably prompt notice of any third party claim which may be
              indemnified, cooperation and, at E-LOAN's sole cost and expense,
              sole control of the defense and settlement of such claim.

         (B)            MarketWatch agrees to indemnify, defend and hold E-LOAN
              harmless from and against any and all claims, suits, actions,
              liability, losses, expenses or damages which may hereafter arise,
              which E-LOAN, its affiliates, directors, officers, agents or
              employees may sustain due to, or arising out of any breach of any
              representation or warranty herein, or arising out of any act or
              omission by MarketWatch, its affiliates, officers, agents,
              representatives or employees or out of any act by MarketWatch, its
              affiliates, officers, agents, representatives or employees in
              connection with this Agreement. However, the above indemnification
              shall not provide coverage for (a) any claim, suit, action,
              liability, loss, expense or damage to the extent resulting from an
              act or omission of E-LOAN or (b) the amount by which any cost,
              fee, expense or loss associated with any of the foregoing were
              increased as a result of an act or omission on the part of E-LOAN.
              As a condition of the foregoing indemnity obligation, E-LOAN
              agrees to give MarketWatch reasonably prompt notice of any third
              party claim which may be indemnified, cooperation and, at
              MarketWatch's-LOAN's sole cost and expense, sole control of the
              defense and settlement of such claim.

         (C)            Notice of Claims. Each party shall promptly notify the
              other in writing of any and all litigation and claims known to
              such party made against it or the other party in connection with
              this Agreement.


                                        6


<PAGE>   7



10.      Capitalized Terms. Capitalized terms used herein shall have the
         meanings set forth herein.

11.      Trademark Licenses.

         (A)            For the term of this Agreement, MarketWatch hereby
             grants to E-LOAN a non-exclusive, royalty-free, worldwide license
             to reproduce, display, and affix MarketWatch's Marks (as defined
             below) in electronic media in connection with any link from or in
             conjunction with the E-LOAN's website. Neither party may use the
             other party's trademarks, service marks, trade names, logos or
             other commercial or product designation (collectively, "Marks")
             for any purpose whatsoever without the prior written consent of the
             other party except as set forth in this section.

         (B)            For the term of this Agreement, E-LOAN hereby grants to
             MarketWatch a non-exclusive, royalty-free, worldwide license to
             reproduce, display, and affix E-LOAN's Marks (as defined below) in
             electronic media in connection with any link from or in conjunction
             with the MarketWatch website. Neither party may use the other
             party's trademarks, service marks, trade names, logos or other
             commercial or product designation (collectively, "Marks") for any
             purpose whatsoever without the prior written consent of the other
             party except as set forth in this section.

         (C)            Subject only to the express rights granted above, each
             party will retain all proprietary rights and interest in and to its
             respective Marks and retain and own all goodwill in and to such
             Marks resulting from their use, whether such use is by or for the
             owner or the licensee.

12.      Confidential Information. Each party recognizes that during the Term,
         its directors, officers, employees and authorized representatives such
         as attorneys and accountants, may obtain knowledge of trade secrets,
         customer lists, membership lists and other confidential information of
         the other party which is valuable, proprietary, special or unique to
         the continued business of that party, which information is initially
         delivered in written form including electronic form or is summarized
         and delivered in writing within thirty (30) days after initial delivery
         in nonwritten form, and which writing is marked "Confidential" or in a
         similar nature to indicate its nonpublic and proprietary nature
         ("Confidential Information"). However, Confidential Information does
         not include information that is (i) or becomes available to the general
         public other than through a breach by the recipient party, (ii) is
         already known to the recipient party as of the time of communication to
         the recipient party, (iii) is developed by the recipient party
         independently of and without reference to information communicated by
         the other party, or (iv) rightfully received by the recipient party
         from a third party which third party is not under a legal duty of
         confidentiality with respect to such information. Accordingly, each

                                        7


<PAGE>   8


         party as a recipient of the other's Confidential Information agrees to
         hold the Confidential Information of the communicating party and the
         terms and conditions of this Agreement in confidence and to use
         diligent efforts to ensure that the communicating party's Confidential
         Information the terms hereof are held in confidence by its officers,
         directors, employees, representatives and others over whom it exercises
         control. Upon discovering any unauthorized disclosure of the
         communicating party's Confidential Information or the terms of this
         Agreement, the recipient party will use diligent efforts to recover
         such information and to prevent its further disclosure to additional
         third parties. The recipient party will promptly notify the
         communicating party in writing of any such authorized disclosure of the
         communicating party's Confidential Information by the recipient party
         or its personnel. The parties' obligations under this paragraph will
         survive for a period of three (3) years following the expiration or
         earlier termination of this Agreement.

13.      Notices. All notices required or permitted by this Agreement shall by
         in writing and shall be given by certified mail, return receipt
         requested, or by reputable overnight courier with package tracing
         capability and shall be sent to the address at the head of this
         Agreement or to such other address that a party specifies in writing in
         accordance with this section.

14.      Disclaimer Concerning Tax Effects. Neither party to this Agreement
         makes any representation or warranty to the other regarding the effect
         that this Agreement and the consummation of the transactions
         contemplated hereby may have upon the foreign, federal, state or local
         tax liability of the other.

15.      Disclaimer of Warranties. Both parties provide all service hereunder
         "AS IS" and without any warranty of any kind. E-LOAN does not guarantee
         continuous or uninterrupted display or distribution of the link and
         MarketWatch does not guarantee continuous or uninterrupted operation of
         its Web site. In the event of interruption of display or distribution
         of E-LOAN's link or of MarketWatch's web site, both parties' sole
         obligation shall be to restore service as soon as reasonably possible.

16.      Amendments. The terms and conditions of this Agreement may not be
         modified or amended other than by a writing signed by both parties.

17.      Assignment/Binding Nature. Neither party may assign, voluntarily, by
         operation of law, or otherwise, any rights, or delegate any duties
         under this Agreement without the other party's prior written consent,
         except that either party may assign this Agreement or any of its rights
         or obligations arising hereunder to the surviving entity in a merger,
         acquisition, or consolidation in which it participates, or to a
         purchaser of substantially all of its assets; provided that the
         assigning party will give reasonable written notice to the nonassigning
         party in advance of such merger, acquisition or other assignment.
         Subject to the foregoing, this Agreement shall be binding upon and
         shall inure to the benefit of the successors and assigns of the
         parties.

18.      Entire Agreement. This Agreement and any exhibits attached hereto
         constitute the entire agreement between the parties and supersede all
         oral and written negotiations of the parties with respect to the
         subject matter hereof.


                                        8


<PAGE>   9



19.      LIMITATION OF LIABILITY. EXCEPT FOR THE PARTIES' RESPECTIVE OBLIGATIONS
         UNDER SECTIONS 9 AND 12 HEREOF, IN NO EVENT WILL EITHER PARTY BE LIABLE
         TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR
         CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT
         (INCLUDING NEGLIGENCE) OR OTHERWISE, [AND] WHETHER OR NOT THAT PARTY
         HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

20.      Governing Law. This Agreement shall be governed and construed in
         accordance with the laws of the State of California without giving
         effect to its conflicts of laws principles. Both parties agree to
         submit to jurisdiction in California, and further agree that any cause
         of action arising under this Agreement may be brought in a court in
         Santa Clara County, California.

         In witness whereof, the parties have caused this Agreement to be
executed the day and year first above written.

E-LOAN, Inc.                                  MarketWatch.com, Inc.

By: /s/ D. Galen                              By: /s/Signature Illegible 2/8/99
    -------------------------                     -----------------------------
Name:  DOUGLAS GALEN                          Name:  WILLIAM BISHOP
       ----------------------                        --------------------------
Title: VP Bus. Dev.                           Title: VP, BUSINESS DEVELOPMENT
       ----------------------                        --------------------------

                                        9




<PAGE>   1
                                                                   EXHIBIT 10.11

                            YAHOO! INC. - E-LOAN INC.

                                LICENSE AGREEMENT

      This License Agreement (the "Agreement") is entered into as of
___________, 1998 (the "Effective Date") between Yahoo!, Inc., a California
corporation with offices at 3420 Central Expressway, Santa Clara, CA 95051
("Yahoo") and E-LOAN Inc., a California corporation with offices at 540
University Avenue, Suite 150, Palo Alto, CA 94301 ("E-Loan").

      WHEREAS, Yahoo and E-Loan entered into a License Agreement on December 5,
1997 the ("License Agreement") which contained, among other things, a license to
certain of E-Loan's mortgage related content and services; and

      WHEREAS, the parties wish to enter into this Agreement, where subject to
the terms contained herein, E-Loan will license to Yahoo certain of E-Loan's
mortgage related content and services upon the expiration of the term of License
Agreement and the parties will conduct other joint marketing activities.

In consideration of the mutual promises contained herein, the parties agree as
follows:

SECTION 1:  DEFINITIONS.

Unless otherwise specified, capitalized terms used in this Agreement shall have
the meanings attributed to them in Exhibit A hereto.

SECTION 2:  LICENSES.

2.1 License to Yahoo. Subject to the terms and conditions of this Agreement,
E-Loan hereby grants to Yahoo, under E-Loan's Intellectual Property Rights:

(a)   A non-exclusive, worldwide license to use, modify, reproduce, distribute,
      display and transmit the E-Loan Content in connection with the Yahoo Loan
      Center and other Yahoo Properties and to permit Users to download and
      print the E-Loan Content. Yahoo's license to modify the E-Loan Content
      shall be limited to modifying the E-Loan Content to fit the format and
      look and feel of the Yahoo Property.

(b)   A non-exclusive, worldwide, fully paid license to use, reproduce and
      display the E-Loan Brand Features: (i) in connection with the presentation
      of the E-Loan Content on the Yahoo Properties; and (ii) in connection with
      the marketing and promotion of the Yahoo Properties.

(c)   Yahoo shall be entitled to sublicense the rights set forth in this Section
      2.1 (i) to its Affiliates only for inclusion in Yahoo Properties, and (ii)
      in connection with


                                       1

                                                                    CONFIDENTIAL
<PAGE>   2
      any mirror site, derivative site, or distribution arrangement concerning a
      Yahoo Property.

2.2 License to E-Loan. Subject to the terms and conditions of this Agreement,
Yahoo hereby grants to E-Loan, under Yahoo's Intellectual Property Rights a
non-exclusive, worldwide, fully paid license to use, reproduce and display the
Yahoo Brand Features (i) in connection with the co-branded banner described in
3.2(a), (ii) to indicate the location of the graphic link described in Section
3.2(f) below and (iii) in connection with the marketing and promotion of the
Yahoo Loan Center, provided that Yahoo has the right to approve all marketing
and promotional material and all other uses of the Yahoo Brand Features prior to
its first distribution.

2.3   Exclusivity.

(a)   In the Yahoo Loan Center, E-Loan shall be the exclusive integrated on-line
      provider of home mortgage content that provides the User with the same
      features as the E-Loan Transaction Content.  Nothing in this Section
      2.3(a) shall preclude Yahoo from including in the Yahoo Loan Center (i)
      [*], so long as Yahoo does not include content or a direct link to content
      from [*] on the Yahoo Loan Center that has the same features and
      functionality as the E-Loan Transaction Content, (ii) other merchants with
      content relating to loans and home mortgages and (iii) a directory of and
      links to other mortgage providers.   E-Loan acknowledges that Yahoo shall
      not be precluded from including links to merchants and mortgage providers
      on the Yahoo Loan Center that may provide content with the same features
      as the E-Loan Transaction Content or that allow a user to apply for a loan
      on-line so long as such content is not one click away from the Yahoo Loan
      Center.  In addition, Yahoo shall not be restricted from placing banner
      advertisements or other advertisements and promotions from any source on
      the Yahoo Loan Center; provided that Yahoo shall not place any banner
      advertising on the first page of the Yahoo Loan Center by or on behalf of
      any third party whose primarily business is providing customers with
      customized mortgage quotes for first or second home mortgage products
      on-line.

 (b)  E-Loan shall not license, distribute or integrate its content, features or
      services at a level similar or greater than that contained herein with any
      of Yahoo's competitors (which currently include, but are not limited to,
      Excite, Lycos, AOL, Microsoft, C/net, Intuit, Netscape and Infoseek and
      their successors).  Notwithstanding the foregoing, E-Loan shall not be
      restricted from placing banner advertisements or links to the E-Loan Site
      below the line in the normal course of business on any of the foregoing
      sites.

SECTION 3: RESPONSIBILITIES OF THE PARTIES.

3.1   Yahoo's Responsibilities.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                       2


                                                                    CONFIDENTIAL

<PAGE>   3
(a)   Yahoo shall be solely responsible for the design, layout, posting, and
      maintenance of the Yahoo Loan Center and the Co-Branded Pages.  The E-Loan
      Content shall appear on the Yahoo Loan Center in a manner similar to the
      example set forth on Exhibit D.  E-Loan shall have the right to approve
                           ---------
      any material changes to the design and placement of the E-Loan Content,
      such consent not to be unreasonably withheld.  Except for the E-Loan
      Transaction Content and except for Yahoo's obligations regarding the
      module in My Yahoo described in Section 3.1(f) below, Yahoo is under no
      obligation, express or implied, to post or otherwise include any of the
      E-Loan Content in any Yahoo Property, including without limitation, on the
      Yahoo Loan Center.

(b)   Co-Branded Pages will include a co-branded banner with the Yahoo Brand
      Features and the E-Loan Brand Features in a manner similar to the example
      set forth in Exhibit D. [*]. Yahoo shall include on the Co-Branded Pages a
      text link above the fold, and a link at the bottom of the page that shall
      direct users to E-Loan Transaction Content pages hosted by Yahoo.


(c)   Yahoo will include a text link to the Yahoo Loan Center on the Yahoo
      Properties as set forth below. The appearance and placement of such text
      link is in Yahoo's sole discretion.


            (i) http://www.yahoo.com/Business and Economy/Companies/Financial
            Services/Financing/; and
            http://www.yahoo.com/Business and Economy/Finance and
            Investment/Financing


            (ii) The front page of Yahoo Finance currently located at
            http://quote.yahoo.com/

            (iii)The residential real estate listings of Yahoo Real Estate
            Classifieds, which currently appears at the bottom of each such page
            but may be changed as determined by Yahoo.


            (iv) The front page and on the left side, where applicable (or in
            such other location as determined by Yahoo), of the real estate page
            of Yahoo Classifieds currently located at
            http://realestate.yahoo.com


            (v) For not less than [*] days during the Term, on the front page of
            the Yahoo Main Site; provided that such text link may link to the
            front page of the Yahoo Loan Center or any subpages. The timing,
            placement and

- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                       3

                                                                    CONFIDENTIAL

<PAGE>   4
            appearance of such text link shall be at Yahoo's sole discretion and
            shall be subject to availability.


            (vi) For not less than [*] days during the Term, on the "Inside
            Yahoo" module on the top pages of
            http://www.yahoo.com/Business_and_Economy/and
            http://www.yahoo.com/Business_and_Economy/Finance_and_Investment/ in
            a manner similar to the example set forth on Exhibit D.


            (vii) On a navigational area on the top page of real estate news
            that appears in Yahoo Real Estate.

            (viii) A text link or graphic button (to be determined in Yahoo's
            sole discretion) on the keyword and directory pages related to real
            estate on the Yahoo Main Site as set forth on Exhibit E. From time
            to time and at any time Yahoo shall have the right to change such
            keyword and directory pages.

            [*]

            [*]

(d)   Yahoo shall provide [*] page views of banner advertisements that link to
      the Yahoo Loan Center.  Such banner advertisements shall be created by
      Yahoo and placed, subject to availability, on run of Yahoo network.  In
      the event that Yahoo fails to deliver such number of page views at the
      expiration of the Term, Yahoo will "make good" the shortfall by extending
      its obligations to place such banner advertisements beyond the end of the
      Term until such page view obligation is satisfied.  The provisions set
      forth in this Section 3.1(d) set forth the entire liability of Yahoo, and
      E-Loan's sole remedy, for Yahoo's breach of its page view obligations.

(e)   Yahoo shall integrate a text link to the Co-Branded Pages in each
      residential real estate listing of Yahoo Real Estate Classifieds. The
      appearance and look and feel of such text link shall be at Yahoo's
      discretion.

(f)   Yahoo will continue to offer users of My Yahoo the capability to include a
      customized module on the finance page of My Yahoo of E-Loan's monitor a
      loan feature.


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*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                       4

                                                                    CONFIDENTIAL

<PAGE>   5
(g)   [*]

3.2   E-Loan Responsibilities.

(a)   E-Loan shall provide and host the initial page and all subsequent pages
      that contain the results of User's inquiries in connection with the E-Loan
      Transaction Content. Such pages will be co-branded with the Yahoo Brand
      Features and the E-Loan Brand Features. The design and content of such
      pages shall be mutually agreed upon by the parties and shall (i) reflect
      the Yahoo look and feel and (ii) contain a graphic link provided by Yahoo
      that links back to Yahoo. The parties agree that the design and content of
      such pages currently hosted by E-Loan as of the Effective Date are deemed
      acceptable for purposes of this Section 3.2(a).

(b)   E-Loan shall continue to provide users of My Yahoo with customized monitor
      a loan results on a daily basis via the User's account with My Yahoo.

(c)   E-Loan shall use best efforts to ensure that all pages of the E-Loan Site
      linked from any Yahoo Property comply with the scale, speed and
      performance equivalent to that provided by the Yahoo Main Site but in no
      event less than the current speed, scale and performance of the E-Loan
      Site. E-Loan shall also operate and maintain the E-Loan Site to be
      competitive with other similar sites on the world wide web, based on
      performance, quality and comparative standing of the E-Loan Site.

(d)   E-Loan shall provide Yahoo the E-Loan Content and shall use best efforts
      to ensure that Users receive results of inquiries in connection with the
      E-Loan Transaction Content that are accurate, comprehensive and
      error-free. Users that click-through to the E-Loan Site to apply for a
      loan shall also receive results of such requests that are accurate,
      comprehensive and error-free.

(e)   In no event shall any page on the E-Loan Site linked from any Yahoo
      Property contain graphic or textual hyperlinks, sponsorships or
      advertising banners of any kind from [*]

(f)   E-Loan shall place a Yahoo graphic link on those pages of the E-Loan Site
      to which users Click-through.  Such Yahoo graphic link shall (a) be placed
      on the E-


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                       5

                                                                    CONFIDENTIAL
<PAGE>   6

      Loan Site in a manner approved by Yahoo (b) contain the Yahoo name and
      logo as provided by Yahoo and (c) directly link the user back to a page
      designated by Yahoo on the Yahoo Properties. Yahoo shall provide all
      graphic images, text, URLs, URL formats, and any other information or
      technology necessary for E-Loan to place such Yahoo graphic link back to
      Yahoo.

(g)   In the event that E-Loan includes a "tools/other resources" (or similar
      area) on the E-Loan Site, E-Loan shall place a text link to Yahoo Finance.
      In addition, if E-Loan elects to promote any free email service in the
      "tools/other resources" (or similar area) on the E-Loan Site, then E-Loan
      shall promote Yahoo Mail in such area of the E-Loan Site and in a manner
      mutually agreed upon by the parties. E-Loan shall not promote or feature
      any other email service in any manner on the E-Loan Site.

(h)   E-Loan shall ensure that all information provided by users of the E-Loan
      Site is maintained, accessed and transmitted in a secure environment and
      in compliance with security specifications equal to that currently
      provided on the E-Loan Site as of the Effective Date.. E-Loan shall
      provide a link to its policy (or to Yahoo's policy) regarding the
      protection of user data on those pages of the E-Loan Site where the user
      is requested to provide personal or financial information.

(i)   E-Loan shall deliver the E-Loan Content and all updates to Yahoo in
      accordance with the delivery specifications set forth in Exhibit C.

3.3   Mutual Responsibilities.

(a)   Yahoo and E-Loan shall continue the current process where certain
      information submitted by a user is transmitted in an intelligent query to
      E-Loan from Yahoo. For example, if a User is looking for a $1,000,000
      home, that information will be sent to the E-Loan Site and would appear as
      mortgage information for that User.

(b)   Each party shall comply with the trademark guidelines provided by the
      other party with respect to the use of such party's Brand Features and
      neither party will alter or impair any acknowledgment of copyright or
      other Intellectual Property Rights of the other.

(c)   E-Loan will remain solely responsible for the operation of the E-Loan
      Site, and Yahoo will remain solely responsible for the operation of the
      Yahoo Properties. Each party, subject to the terms of this Agreement,
      retains sole right and control over the programming, content and conduct
      of transactions over its respective site.

(d)   Each party shall provide on-going assistance to the other party with
      regard to technical, administrative and service-oriented issues relating
      to the utilization, transmission and maintenance of the E-Loan Content, as
      may be reasonably requested.


                                       6

                                                                    CONFIDENTIAL
<PAGE>   7

SECTION 4: COMPENSATION.

4.1 Slotting Fee. In consideration of Yahoo's performance and obligations as set
forth herein, E-Loan will pay to Yahoo a total slotting fee equal to [*]. The
slotting fee shall not be determined in any manner by the number or amount of
loan applications taken or loans originated by E-Loan. Such fee shall be paid to
Yahoo quarterly on the dates set forth below with the first payment designated
as a set up fee for the design, consultation, development, implementation and
placement of the E-Loan Content.

<TABLE>
<CAPTION>
Payment                                      Date
- ---------                     ---------------------------------
<S>                           <C>
[*]                           [*]
</TABLE>

4.2 Click-through Fee. In addition to the slotting fee, E-Loan shall pay to
Yahoo a fee equal to [*] per Click-through after a total of [*] Click-throughs
have occurred and continuing until [*] Click-throughs have occurred. Thereafter,
E-Loan shall pay Yahoo [*] per Click-through. The Click-through fee shall not
be determined in any manner by the number or amount of loan applications taken
or loans originated by E-Loan. Payments of the Click-through fee are due and
payable within thirty (30) days after the last day of each calendar quarter
during the term of this Agreement.

4.3 Audit Rights. Yahoo shall have the right, at its own expense, to direct an
independent certified public accounting firm to inspect and audit the accounting
and sales books and records of E-Loan that are relevant to the payments set out
in Section 4.2 above; provided, however, that: (i) Yahoo shall provide E-Loan
[*] days notice prior to such audit; (ii) any such inspection and audit shall be
conducted during regular business hours in such a manner as not to interfere
with normal business activities; (iii) in no event shall audits be made more
frequently than [*] per calendar year unless an underpayment of more than [*] is
revealed in any audit and then, no more than [*] every quarter; and (iv) in the
event that any audit reveals an underpayment of more than [*] of the amounts due
Yahoo for any calendar quarter, E-Loan will reimburse the reasonable cost of
such audit. If any audit shall reveal an overpayment of the amounts due Yahoo,
E-Loan shall be entitled to credit such amounts against further payments due,
and if no further payments are due, Yahoo shall promptly refund such amount to
E-Loan.

4.4 Advertising Revenue. Yahoo shall have the sole right to sell, license or
otherwise dispose of all advertising and promotional rights with respect to the
Yahoo Properties, including the Yahoo Loan Center, the Co-Branded Pages and all
other pageviews to


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                       7

                                                                    CONFIDENTIAL
<PAGE>   8

Yahoo's servers. E-Loan shall have the sole right to sell, license or otherwise
dispose of all advertising and promotional rights with respect to the E-Loan
Site and all other pageviews to E-Loan's servers.

4.5 Payment Information. All payments herein are non-refundable and
non-creditable (except as set forth in Section 4.3 above) and shall be made by
E-Loan in U.S. dollars via wire transfer into Yahoo's main account pursuant to
the wire transfer instructions set forth on Exhibit F. Any portion of the above
payments which has not been paid on the dates set forth above shall bear
interest at the lesser of (i) one percent (1%) per month or (ii) the maximum
amount allowed by law. Notwithstanding the foregoing, any failure by E-Loan to
make the payments specified in Sections 4.1 and 4.2 on the dates set forth
therein shall constitute a material breach of this Agreement.

SECTION 5: REPRESENTATIONS AND WARRANTIES.

5.1   Each of Yahoo and E-Loan represents and warrants that at all times during
      the term of this Agreement it shall have all licenses and approvals to
      enter into this Agreement and grant the licenses contained herein and that
      the negotiation, entry and performance of this Agreement will not violate,
      conflict with, interfere with, result in a breach of, or constitute a
      default under any other agreement to which they are a party or any
      government order or decree to which they are subject.

5.2   E-Loan represents and warrants that it is, and at all times during the
      term of this Agreement shall be, in compliance with any and all applicable
      laws, rules and regulations of any jurisdiction, including, without
      limitation, the Federal Real Estate Settlement Procedures Act of 1974 and
      HUD Regulation X promulgated thereunder, the Federal Equal Credit
      Opportunity Act, and Federal Reserve Regulation B, the Federal Truth in
      Lending Act and Federal Reserve Regulation Z promulgated thereunder, the
      Federal Fair Credit Reporting Act, and all federal, state and local
      privacy laws, rules and regulations and any other applicable laws of any
      jurisdiction now in effect and that may come into existence during the
      term hereof.

5.3   E-Loan represents and warrants that the E-Loan Content is substantially
      free from programming errors or viruses and will produce results in
      response to User's inquiries that are accurate, comprehensive and
      error-free. E-Loan further represents and warrants that all User
      information will be obtained, maintained and distributed in a secure
      environment and will not be used or disclosed except as allowed herein.

SECTION 6: INDEMNIFICATION.

6.1   E-Loan, at its own expense, will indemnify, defend and hold harmless
      Yahoo, its Affiliates and their employees, representatives, agents and
      affiliates, against any claim, suit, action, or other proceeding brought
      against Yahoo or an Affiliate


                                       8
                                                                    CONFIDENTIAL
<PAGE>   9
      based on or arising from a claim (a) that, if true, would constitute a
      breach of the representations and warranties set forth in Section 5 above
      or (b) that the E-Loan Brand Features, any E-Loan Content or any material,
      product, information, data or service produced, distributed, offered or
      provided by E-Loan or any material presented on any site on the Internet
      produced, maintained, or published by E-Loan, infringes in any manner any
      copyright, patent, trademark, trade secret or any other intellectual
      property right of any third party, is or contains any material or
      information that is obscene, defamatory, libelous, slanderous, or that
      violates any law or regulation, is negligently performed, or that
      otherwise violates or breaches any duty toward, or rights of any person or
      entity, including, without limitation, rights of publicity, privacy or
      personality, or has otherwise resulted in any consumer fraud, product
      liability, tort, breach of contract, injury, damage or harm of any kind to
      any person or entity and also including any claim relating to any mortgage
      loan approval or mortgage application provided by E-Loan; provided;
      however, that in any such case: (x) Yahoo provides E-Loan with prompt
      notice of any such claim; (y)Yahoo permits E-Loan to assume and control
      the defense of such action, with counsel chosen by E-Loan (who shall be
      reasonably acceptable to Yahoo); and (z) E-Loan does not enter into any
      settlement or compromise of any such claim without Yahoo's prior written
      consent, which consent shall not be unreasonably withheld. E-Loan will pay
      any and all costs, damages, and expenses, including, but not limited to,
      reasonable attorneys' fees and costs awarded against or otherwise incurred
      by Yahoo or an Affiliate in connection with or arising from any such
      claim, suit, action or proceeding. It is understood and agreed that Yahoo
      does not intend and will not be required to edit or review for accuracy or
      appropriateness any E-Loan Content.

6.2   Yahoo, at its own expense, will indemnify, defend and hold harmless E-Loan
      and its employees, representatives, agents and affiliates, against any
      claim, suit, action, or other proceeding brought against E-Loan based on
      or arising from a claim [*] provided, however, that in any such case: (x)
      E-Loan provides Yahoo with prompt notice of any such claim; (y) E-Loan
      permits Yahoo to assume and control the defense of such action upon
      Yahoo's written notice to E-Loan of its intention to indemnify; and (z)
      upon Yahoo's written request, and at no expense to E-Loan, E-Loan will
      provide to Yahoo all available information and assistance necessary for
      Yahoo to defend such claim. Yahoo will not enter into any settlement or
      compromise of any such claim, which settlement or compromise would result
      in any liability to E-Loan, without E-Loan's prior written consent, which
      shall not unreasonably be withheld. Yahoo will pay any and all costs,
      damages, and expenses, including, but not limited to, reasonable
      attorneys' fees and costs awarded against or otherwise incurred by E-Loan
      in connection with or arising from any such claim, suit, action or
      proceeding.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                       9

                                                                    CONFIDENTIAL

<PAGE>   10

SECTION 7: LIMITATION OF LIABILITY.

             EXCEPT AS PROVIDED IN SECTIONS 4 AND 6, UNDER NO CIRCUMSTANCES
SHALL E-LOAN, YAHOO, OR ANY AFFILIATE BE LIABLE TO ANOTHER PARTY FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES ARISING FROM THIS
AGREEMENT, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR
LOST BUSINESS.

SECTION 8: TERM AND TERMINATION.

8.1 Term. This Agreement will become effective as of the Effective Date and
shall, unless sooner terminated as provided below or as otherwise agreed, remain
effective for a term of twelve (12) months following the Launch Date.


      (a) Nine months after the Launch Date, Yahoo will provide written notice
to E-Loan in the event that Yahoo, in its sole discretion, elects to extend the
program described in this Agreement for an additional year. Yahoo shall
describe Yahoo's reasonable business requirements for the opportunity in its
written notice to E-Loan. The parties will use good-faith efforts to negotiate
and execute a written extension or amendment to this Agreement under reasonable
terms and conditions. If E-Loan declines to commence negotiations with Yahoo
within [*] days after receiving such written notice from Yahoo, or if the
parties fail to reach agreement within [*] days following the commencement of
god faith negotiations (or such later date as if agreed by the parties), Yahoo
may offer the opportunity to any third party.


8.2 Termination for Cause. Notwithstanding the foregoing, this Agreement may be
terminated by either party immediately upon notice if the other party: (w)
becomes insolvent; (x) files a petition in bankruptcy; (y) makes an assignment
for the benefit of its creditors; or (z) breaches any of its obligations under
this Agreement in any material respect, which breach is not remedied within
thirty (30) days (ten (10) days in the case of a failure to pay) following
written notice to such party. . In the event that Yahoo provides a notice of
termination under clause (z) above due to a failure to pay, Yahoo shall have the
right to suspend performance under Sections 2.3(a) and 3.1 of this Agreement for
the notice period until the breach is fully remedied by E-Loan.

8.3 Effect of Termination. Any termination pursuant to this Section 8 shall be
without any liability or obligation of the terminating party, other than with
respect to any breach of this Agreement prior to termination. The provisions of
Sections 4.1, 4.3, 4.5, and 5 - 12 shall survive any termination or expiration
of this Agreement; except that if this Agreement terminates due to a breach by
Yahoo, then Section 4.1 shall not survive.

SECTION 9: OWNERSHIP.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                       10


                                                                    CONFIDENTIAL
<PAGE>   11

9.1 By E-Loan. Yahoo acknowledges and agrees that: (i) as between E-Loan on the
one hand, and Yahoo and its Affiliates on the other, E-Loan owns all right,
title and interest in the E-Loan Content and the E-Loan Brand Features; (ii)
nothing in this Agreement shall confer in Yahoo or an Affiliate any right of
ownership in the E-Loan Content or the E-Loan Brand Features; and (iii) neither
Yahoo or its Affiliates shall now or in the future contest the validity of the
E-Loan Brand Features.

9.2 By Yahoo. E-Loan acknowledges and agrees that: (i) as between E-Loan on the
one hand, and Yahoo and its Affiliates on the other, and subject to E-Loan's
right in the E-Loan Content and the E-Loan Brand Features, Yahoo or the
Affiliates own all right, title and interest in the Yahoo Loan Center, the
Co-Branded Pages and any other Yahoo Property and the Yahoo Brand Features; (ii)
nothing in this Agreement shall confer in E-Loan any license or right of
ownership in the Yahoo Brand Features; and (iii) E-Loan shall not now or in the
future contest the validity of the Yahoo Brand Features.


9.3 Data Ownership. [*]


SECTION 10: PUBLIC ANNOUNCEMENTS; CONFIDENTIALTIY.

10.1 Public Announcements. The parties will cooperate to create any and all
appropriate public announcements relating to the relationship set forth in this
Agreement. Neither party shall make any public announcement regarding the
existence or content of this Agreement without the other party's prior written
approval and consent. Yahoo will publicly announce this relationship by issuing
a joint press release.

10.2 Confidentiality. Yahoo and E-Loan have previously entered into a Mutual
Nondisclosure Agreement, dated December 10, 1997, and expressly acknowledge that
such Mutual Nondisclosure Agreement remains in full force and effect in
accordance with its terms.


- ----------
*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.


                                       11

                                                                    CONFIDENTIAL
<PAGE>   12
SECTION 11: INSURANCE.

E-Loan agrees that it will maintain insurance with a carrier that is reasonably
acceptable to Yahoo and with coverage for commercial general liability of at
least two million dollars per occurrence. Prior to the launch of the E-Loan
Content on the Yahoo Loan Center, E-Loan shall obtain coverage for errors and
omissions of at least two million dollars per occurrence and E-Loan will name
Yahoo as an additional insured on such insurance. E-Loan will provide evidence
of such insurance to Yahoo prior to the launch of the E-Loan Content on the
Yahoo Loan Center. Yahoo shall have the right to terminate this Agreement upon
written notice to E-Loan without liability or obligation of any kind to E-Loan
for any such termination by Yahoo. E-Loan shall not cancel or modify such
insurance without Yahoo's prior written consent and such insurance shall remain
in effect after the termination hereof except that E-Loan shall not be obligated
to continue to name Yahoo as an additional insured after the expiration of the
term of this Agreement.

SECTION 12: NOTICE; MISCELLANEOUS PROVISIONS

12.1 Notices. All notices, requests and other communications called for by this
Agreement shall be deemed to have been given immediately if made by telecopy or
electronic mail (confirmed by concurrent written notice sent first class U.S.
mail, postage prepaid), if to Yahoo at 3420 Central Expressway, Santa Clara, CA
95051, Fax: (408) 731-3301 Attention: Vice President (e-mail:
[email protected]), with a copy to its General Counsel (e-mail:
[email protected]), and if to E-Loan at the physical and electronic mail
addresses set forth on the signature page of this Agreement, or to such other
addresses as either party shall specify to the other. Notice by any other means
shall be deemed made when actually received by the party to which notice is
provided.

12.2 Miscellaneous Provisions. This Agreement will bind and inure to the benefit
of each party's permitted successors and assigns. Neither party may assign this
Agreement, in whole or in part, without the other party's written consent;
provided, however, that: (i) either party may assign this Agreement without such
consent in connection with any merger, consolidation, any sale of all or
substantially all of such party's assets or any other transaction in which more
than fifty percent (50%) of such party's voting securities are transferred. Any
attempt to assign this Agreement other than in accordance with this provision
shall be null and void. This Agreement will be governed by and construed in
accordance with the laws of the State of California, without reference to
conflicts of laws rules, and without regard to its location of execution or
performance. If any provision of this Agreement is found invalid or
unenforceable, that provision will be enforced to the maximum extent permissible
and the other provisions of this Agreement will remain in force. The prevailing
party in any action to enforce this Agreement shall be entitled to reimbursement
of its expenses, including reasonable attorneys' fees. Neither this Agreement,
nor any terms and conditions contained herein may be construed as creating or
constituting a partnership, joint venture or agency relationship between the
parties. No failure of either party to exercise or enforce any of its rights
under this Agreement will act


                                       12
                                                                    CONFIDENTIAL
<PAGE>   13
as a waiver of such rights. Except as provided in Section 10.2 and except that
the License Agreement shall continue in effect until it terminates according to
its terms, this Agreement and its exhibits are the complete and exclusive
agreement between the parties with respect to the subject matter hereof,
superseding and replacing any and all prior agreements, communications, and
understandings, both written and oral, regarding such subject matter.
Notwithstanding the foregoing, the provisions of this Agreement expressly
supersedes and replaces the provisions set forth in Section 8.1(a) of the
License Agreement with respect to continuing the program beyond the term set
forth in the License Agreement. This Agreement may only be modified, or any
rights under it waived, by a written document executed by both parties. No third
party beneficiaries are created or established by this Agreement. Except as
otherwise specifically provided for herein, each party shall bear its own
expenses for the negotiation of and the performance of this Agreement. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute a single instrument. Execution and delivery of this
Agreement may be evidenced by facsimile transmission.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first written above.

YAHOO! INC.                               E-LOAN, INC.

By:                                       By:
          ---------------------------               ----------------------------
Title:                                    Title:
          ---------------------------               ----------------------------
Address:                                  Address:
          ---------------------------               ----------------------------
Telecopy:                                 Telecopy:
          ---------------------------               ----------------------------
E-mail:                                   E-mail:
          ---------------------------               ----------------------------


                                       13

                                                                    CONFIDENTIAL
<PAGE>   14
                                    EXHIBIT A
                                   DEFINITIONS

      "Affiliates" shall mean any company or any other entity world-wide,
including, without limitation, corporations, partnerships, joint ventures, and
Limited Liability Companies, in which Yahoo owns at least a twenty percent
ownership, equity, or financial interest.

      "Click-through" shall mean a user presence at the E-Loan Site that
originated from a Yahoo Property.

      "Co-Branded Pages" shall mean those pages hosted by Yahoo that are
co-branded and that solely contain E-Loan Content.

      "Launch Date" shall mean March 1, 1999.

      "E-Loan Brand Features" shall mean all trademarks, service marks, logos
and other distinctive brand features of E-Loan that are used by E-Loan,
including, without limitation, the trademarks, service marks and logos described
in Exhibit B hereto.

      "E-Loan Content" shall mean information and data relating to first and
second mortgage loans and the loan process and includes the E-Loan Transaction
Content as mutually agreed upon from time to time.

      "E-Loan Transaction Content" shall mean (i) E-Loan's mortgage quote
feature that provides a user with customized quotes on mortgage products
designated by the user, (ii) E-Loan's mortgage loan recommendation feature that
provides recommendations on mortgage products based on the user's response to a
series of questions, (iii) E-Loan's mortgage qualification feature that provides
an analysis of a user's position as a borrower compared to general lender
guidelines and, in response to a series of questions, will match a user's
borrowing criteria against a database of lenders and their guidelines, and (iv)
E-Loan's monitor a loan service that, in response to a series of questions,
determines whether any mortgage products are available in the market that are
superior to a user's current mortgage. E-Loan Transaction Content includes the
foregoing features and services set forth in clauses (i) through (iv) above as
applied to second loans and home equity loans when such features and services
are available in a significant number of states and acceptable to both parties
and does not include any content or feature allowing a user to apply for a loan
on-line.

      "E-Loan Site" shall mean E-Loan's World Wide Web site currently located at
http://www.eloan.com.

      "Intellectual Property Rights" shall mean all rights in and to trade
secrets, patents, copyrights, trademarks, know-how, as well as moral rights and
similar rights of any type under the laws of any governmental authority,
domestic or foreign.

                                                                    CONFIDENTIAL
<PAGE>   15

      "Internet" shall mean the collection of computer networks commonly known
as the Internet, and shall include, without limitation, the World Wide Web.

      "My Yahoo" shall mean that personalized web product that is part of the
Yahoo Main Site and currently located at http://www.my.yahoo.com.

      "User" shall mean a user of the Yahoo Properties.

      "Yahoo Brand Features" shall mean all trademarks, service marks, logos and
other distinctive brand features of Yahoo that are used in or relate to a Yahoo
Property, including, without limitation, the trademarks, service marks and logos
described in Exhibit B.

      "Yahoo Loan Center" shall mean the Yahoo branded U.S. based property with
information relating to home mortgages currently located at
http://loan.yahoo.com/. Yahoo shall have the right to change the name of the
Yahoo Loan Center from time to time.

      "Yahoo Main Site" shall mean Yahoo's principal U.S. based directory to the
World Wide Web currently located at http://www.yahoo.com.

      "Yahoo Real Estate Classifieds" shall mean the portion of Yahoo's U.S.
based web site that contains classified listings of residential real estate and
is currently located at http://classifieds.yahoo.com/residential.html

      "Yahoo Properties" shall mean any Yahoo branded or co-branded media
properties, including, without limitation, Internet guides, developed in whole
or in part by Yahoo or its Affiliates and distributed or made available by Yahoo
or its Affiliates over the Internet.

                                                                    CONFIDENTIAL
<PAGE>   16
                                    EXHIBIT B

                              E-LOAN BRAND FEATURES


                              YAHOO BRAND FEATURES


Yahoo!
Yahoo related logos


                                                                    CONFIDENTIAL
<PAGE>   17
                                    EXHIBIT C


A. E-Loan's Responsibilities:

E-Loan will deliver the E-Loan Content to Yahoo via e-mail.

B. Yahoo's Responsibilities:

                                                                    CONFIDENTIAL
<PAGE>   18
                                    EXHIBIT D

                                  SAMPLE PAGES

Co-Branded Page (E-Loan Content)

[GRAPHIC]


                                                                    CONFIDENTIAL
<PAGE>   19

Co-Branded Page (E-Loan Transaction Content)

[GRAPHIC]

                                                                    CONFIDENTIAL
<PAGE>   20
Inside Yahoo! Module

[GRAPHIC]

                                                                    CONFIDENTIAL
<PAGE>   21
                                   EXHIBIT E

                          KEYWORD AND DIRECTORY PAGES


Directory Pages:
http://www.yahoo.com/Business and Economy/Companies/Financial Services/Financing
/Real Estate/

http://www.yahoo.com/business and Economy/Real Estate/http://www.yahoo.com/
Business and Economy/Companies/Real Estate/


                                                                    CONFIDENTIAL


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*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.
<PAGE>   22
                                   EXHIBIT F

                           WIRE TRANSFER INSTRUCTIONS

[*]


                                                                    CONFIDENTIAL


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*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.
<PAGE>   23


                                    AMENDMENT
                            YAHOO, INC. - E-LOAN INC.
                                LICENSE AGREEMENT

         This Amendment is entered into as of March 19, 1999 (the
"Effective Date") between Yahoo! Inc., a California corporation ("Yahoo") and
E-LOAN Inc., a California corporation ("E-Loan") and amends the License
Agreement (the "Agreement") entered into between Yahoo and E-Loan with a Launch
Date of March 1, 1999.

         For good and valuable consideration, the receipt of which is hereby
acknowledged, Yahoo and E-Loan hereby agree to amend the Agreement as follows:

1. The term of the Agreement described in Section 8.1 will be extended for an
additional term of one year commencing March 1, 2000 and continuing until
February 28, 2001 (the "Subsequent Term").

2. During the Subsequent Term, Section 4.1 of the Agreement which describes the
slotting fee to be paid by E-Loan will be replaced in its entirety by the
following paragraph:

"4.1 Slotting Fee. In consideration of Yahoo's performance and obligations as
set forth herein, E-Loan will pay to Yahoo a slotting fee calculated as follows:
[*]

3. During the Subsequent Term, E-loan will pay Yahoo a Click-through fee as
described in Section 4.2 of the Agreement. In addition, during the original term
of the Agreement and the Subsequent Term, the following provisions are added to
the end to the last sentence of Section 4.2:

"Click-through fees are calculated and will be paid by E-Loan based on Yahoo's
advertising tracking system. [*]

4. The following new provision is added to Section 3.2 regarding E-Loan
Responsibilities:


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*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.
<PAGE>   24

"(j) E-Loan shall deliver to Yahoo a monthly report specifying the following:
[*]

5. The following amendments are made to the definitions set forth in Exhibit A:

The definition of Click-through is replaced by the following:

"Click-through" shall mean a user presence at the E-Loan Site that originated
from a Yahoo Property including, without limitation, a user selecting or
clicking on any link on a Yahoo Property that will link the user to the E-Loan
Site.

A new definition of Unique Users is added as follows:

"Unique Users" shall mean the total number of unduplicated users that visited
the Yahoo Loan Center once during any month as reported by Media Metrix or
similar third party internet measurement and reporting agency.

The definition of Yahoo Loan Center is replaced by the following:

"Yahoo Loan Center" shall mean the Yahoo branded U.S. based property with
information related to loans currently located at http://loan.yahoo.com."

6. Except as expressly amended as set forth herein, the Agreement shall remain
in full force and effect in accordance with its terms.

7. This Amendment has been executed by the duly authorized representatives of
the parties, effective as of the date first set forth above.



YAHOO! INC.                                  E-LOAN INC.

By:  Illegible                                By: /s/ Doug Galen
   -----------------------                       -----------------------

Name: Illegible                               Name: Doug Galen
     ---------------------                         ---------------------

Title:  VP                                    Title:  VP
      --------------------                         ---------------------


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*Confidential treatment requested pursuant to a request for confidential
 treatment filed with the Securities and Exchange Commission. Omitted portions
 have been filed separately with the Commission.

<PAGE>   1

                                                                    EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS

     We hereby consent to the use in this Registration Statement on Form S-1 of
our report dated March 24, 1999 relating to the financial statements of E-Loan,
Inc., which appears in such Registration Statement. We also consent to the
references to us under the headings "Experts" and "Selected Financial Data" in
such Registration Statement.

/s/ PricewaterhouseCoopers LLP

San Francisco, CA

June 22, 1999



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