What we like:
Beat any qualifying rate
|Rates (APR)||5.34% – 16.99%|
|Loan Terms||2 – 7 years|
|Loan Amounts||$5,000 – $100,000|
|Fees||Origination fee: None|
Prepayment penalty: None
Late fee: None
For people seeking out personal loans, it is well established that to qualify for low interest personal loans, they need to have very good credit and a steady income. But, did you know you could qualify for the lowest rates based on what you actually use the loan for?
This LightStream Personal Loan Review will look at the revolutionary business model that LightStream employs to differentiate itself among a crowded field of online lenders like LendingClub and Prosper.
Founded in 2005, FirstAgain was acquired by SunTrust Bank in 2012 and now operates as its national online consumer lending division as LightStream. From the very beginning, its mission has been to deliver an uncommon loan experience for its customers. They even guarantee it with an offer of $100 to anyone who isn’t completely satisfied after the loan has been funded*.
That is why it came up with a proprietary technology that enables customers with very good to excellent credit profiles to be able to qualify for the most competitive rates on loans that most lenders would not issue without collateral. In fact, they are so confident their interest rates are the most competitive, they will beat the APR of any other lender by .1 percent if the other lender’s rate meets certain terms and conditions*.
LightStream Personal Loan Offerings
LightStream offers a range of personal loan products with amounts ranging from $5,000 to $100,000. The loan term can be as long as seven years or as short as two years*, allowing you to fit the payment to your budget. There are no origination or prepayment fees.
LightStream offers competitive APRs compared to other online lenders with rates ranging from 5.34% to 16.99%* with AutoPay. Borrowers can shave 0.5 percent off their rate by setting up automatic payments. The loan rate is determined in part with traditional factors such as your credit score and history; however, loan purpose, loan amount, and loan term are also taken into consideration.
LightStream assigns a risk factor to how the loan proceeds are going to be used. For instance, it considers a loan to consolidate debt to be a higher risk than for one to purchase a car. So, it will assign a higher interest rate to the loan that pays off debt. You will need to include the purpose of your loan in your application. After loan amount, loan term, and payment method are selected, you will then be presented with a range of rates available for that specific purpose. You won’t know the actual rate your loan purpose qualifies for until your credit qualifications are considered.
The credit qualifications for LightStream are stricter than most other online lenders. It probably won’t consider anyone with a credit score less than 680. It also requires that you be able to demonstrate financial stability by listing your retirement account assets along with other investment and savings accounts. If you can’t qualify based on your own credit, LightStream does allow for joint applications.
Everything needed to apply and qualify for a personal loan is done online. The application process is quick and easy and you can expect a quick response during business hours.
LightStream Personal Loan Pros
Flexible loan terms: With loan terms of two to seven years* you can pick one that best fits your needs.
Low interest rates: Borrowers with excellent credit can expect to receive a very competitive rate, even for loans that might require collateral at other lenders.
Direct lender: LightStream originates and funds its own loans which means quicker funding.
LightStream Personal Loan Cons
Loan stipulations: Funds must be used specifically for the purpose stated on the application or the loan will be rescinded.
Stiff credit qualifications: LightStream doesn’t hide the fact that it caters primarily to the most creditworthy borrowers.
LightStream is intent on offering a unique loan experience for creditworthy borrowers, and they are willing to compensate you if they don’t meet expectations. If you have excellent credit, you have the opportunity to receive the most competitive rates available.
*Payment example: Monthly payments for a $10,000 loan at 9.34% APR with a term of 3 years would result in 36 monthly payments of $319.58. LightStream disclosures here.
Author: Jeff Gitlen
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