LightStream Personal Loans Review 2021: Low Rates for Those With Good Credit, but Upfront Credit Check Needed

A photo to accompany a review of LightStream personal loans Illustration/NextAdvisor

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LightStream is the online lending arm of Truist Bank, which became the seventh-largest commercial bank in the U.S. after SunTrust Banks and BB&T Corp. merged in 2019

But LightStream has been offering fee-free unsecured personal loans since 2013. To date, the lender has provided loans for about 1 million borrowers—particularly those with strong credit—in all 50 states and the District of Columbia. 

You can apply for a loan, manage your account, and make payments either through an online portal or the lender’s mobile app (available for both Android and iOS). Some customers even get their loan funds within the same business day. LightStream offers a rate beat program that will match a competitor’s offer and then some, along with a Loan Experience Guarantee that will send you $100 if you’re not completely satisfied with your experience. And although its process is virtually paperless, LightStream takes “eco-friendly” a step further and plants one tree for every loan it originates. 

While there’s a lot to like about LightStream, there are a few drawbacks to watch for. You won’t be able to check your rate before applying, the minimum loan limit starts a bit high, and borrowers need several years’ worth of credit history to qualify. If you’re shopping around for the best deal, here’s an overview of what LightStream can do for you. 

What To Know Before Getting a Personal Loan

Personal loans can be a quick way to access cash and cover just about any type of expense. But they’re not all created equally, so it’s important to shop around and compare offers with multiple lenders. One loan might look like a good deal, but the exact rate and loan terms you get might differ from what’s advertised. Loan details usually depend on your credit score, income, the loan amount, and terms. In addition to the interest rate, check if the lender charges any fees — such as origination fees, prepayment penalties, or late fees — that might raise the cost of the loan.

Also look for lenders that pre-qualify customers using a soft credit check. With this method, you can preview your interest rate and loan terms without hurting your credit score. Other lenders — like LightStream — may require a hard credit inquiry, which could lower your credit score by a few points. When you officially apply for the loan, though, all lenders will perform a hard credit inquiry. 

It’s also important to know the difference between a secured loan and an unsecured loan. Most personal loans are unsecured, which means you won’t need to put down collateral to qualify for the loan. Secured loans may offer lower interest rates, but they come with more risk because you could lose your collateral if you fall behind on payments. 

Once you’ve taken out a personal loan, make sure you have a plan to pay it off and always make on-time payments. This can help you avoid additional fees and keep your credit score healthy.

Alternatives To Personal Loans

Personal loans can be a great way to pay for major expenses or consolidate debt, but these alternatives might be better in some situations: 

  • A home equity loan, home equity line of credit (HELOC), or a cash-out refinance. These financing options allow homeowners to borrow cash by tapping into their home equity. They might be a good option if you’ve built a lot of home equity and qualify for a low interest rate. But make sure you know the unique pros and cons of each before applying. 
  • A balance transfer credit card. Some credit cards come with a 0% introductory APR for a specific period of time, usually 15 to 18 months. If you want to consolidate debt and can pay off the balance within the promotional time frame, you might consider this strategy. But watch out for balance transfer fees, which could eat into any savings. And if you end up with a balance at the end of the intro period, you’ll be on the hook for a higher credit card APR. 
  • Personal savings. If your money needs aren’t urgent, consider saving up for your big purchase over the course of a few weeks or months. Paying with cash allows you to avoid interest costs and keep your credit healthy. After you save for your expense, consider setting up an emergency fund if you don’t already have one. Having three to six months’ worth of expenses saved can help you avoid going into debt in the future. 
  • Credit counseling. If you’re struggling with debt or need help managing your finances, many nonprofit organizations offer free or low-cost credit counseling to get you back on track. These services won’t provide you with money directly, but they can provide expert financial advice and direct you to other resources that may be able to help.

Pros and Cons of LightStream

Pros

  • You can use the LightStream app to apply for a loan, monitor your account, and make payments

  • If you get a better offer from another lender, LightStream will beat the rate by 10 basis points (0.10%)

  • Customers pay no fees

  • Fast approval and funding

  • Can add a joint borrower

  • If you’re not completely satisfied with your experience, LightStream will send you $100 if you fill out a questionnaire on what they can improve

Cons

  • No rate check available, so you’ll need to apply for a loan to see your offers. This requires a hard credit pull

  • Borrowers need a credit score of at least 660 and several years’ worth of credit history to qualify

  • Minimum loan amount is higher than some of its competitors

LightStream Compared To Other Lenders

LightStreamSoFiMarcus by Goldman Sachs
Current APR2.49% to 19.99% (with autopay discount)5.99% to 19.63%6.99% to 19.99%
Loan Term Range1 to 12 years, depending on loan type 2 to 7 years3 to 6 years
Loan Amount$5,000 to $100,000, depending on loan type$5,000 to $100,000$3,500 to $40,000
Credit Score Needed660680Not specified
Prepayment PenaltyNoneNoneNone
Origination FeeNoneNoneNone
Unsecured or Secured DebtUnsecuredUnsecuredUnsecured

The above rates and loan information is accurate as of August 2, 2021. The NextAdvisor editorial team updates this information regularly, though it is possible APRs and other information has changed since it was last updated. Some of the lowest advertised rates might be for secured loans, which require collateral such as your home, car, or other asset. Also, some loan offerings may be specific to where you live.

How To Qualify For a LightStream Loan

To qualify for one of its personal loans, LightStream says borrowers need a minimum credit score of 660. That score is on the upper end of the “fair” range, according to credit bureau Experian. But the lender says it will review an applicant’s overall credit history and financial situation to see if they qualify. LightStream says it will check your: 

  • Credit history: You’ll need several years of credit history with a mix of account types, such as credit cards, installment loans, and mortgage loans.
  • Assets: When you have access to assets, such as cash and retirement savings, there’s a better chance you can withstand financial emergencies and make your monthly personal loan payment. 
  • Income: LightStream wants to make sure you have enough income to pay for your current debt obligations and the monthly bill on a personal loan. 
  • Payment history: A good payment history with few or no delinquencies shows you’re a responsible borrower.

Who Should Get a LightStream Personal Loan

LightStream’s personal loans are a good fit for borrowers who need cash quickly, have a credit score of at least 660, and have several years’ worth of credit history. And because its loans may stretch to $100,000, LightStream is also a good option for those looking to borrow a large amount. 

But because you can’t check your rate without applying, hold off on submitting the application unless you’re pretty sure you qualify. The application will create a hard inquiry, which may temporarily lower your credit scores by a few points. However, LightStream also offers a rate beat program, reducing the risk that you’ll find a better offer elsewhere. 

If your credit score keeps you from qualifying for a loan with LightStream, check out NextAdvisor’s list of personal loans for bad credit

It’s also a good idea to know whether you can use a LightStream loan for your particular expense. LightStream says borrowers can use its loans to cover many types of expenses, including:

  • A car purchase or refinance
  • Home improvements
  • Pool installations
  • Timeshare financing 
  • A boat or airplane purchase
  • Fractional loans
  • Medical expenses 
  • Jewelry 
  • Adoption financing
  • Pre-K education loans
  • Horse loans

But you can’t use a LightStream loan to pay for college expenses, refinance an existing student loan, fund a business, purchase investments, or pay off another LightStream loan. 

How to Apply For a LightStream Loan

If you’ve determined a personal loan is right for your financial needs, here’s how to apply for a LightStream personal loan:

  1. Fill out the application. You’ll need to provide personal details, such as your name and Social Security number, and financial information, such as your housing costs and annual income. LightStream will also ask how much you need to borrow, how you plan to use the loan, whether you’d like to add a co-borrower, and your preferred loan term.
  2. Create an account. For security purposes, you’ll need to create a LightStream account with a username, password, and a security question and answer. 
  3. Review and electronically sign your loan agreement. If you qualify for a personal loan, LightStream will list your loan amount, monthly payment, APR, and other loan terms. Read through these terms and make sure you understand them before signing electronically.
  4. Complete the verification process. Provide your relevant banking information and requested documentation.
  5. Receive your loan funds. You may receive your money on the same business day if your application is approved and you complete the process by 2:30 p.m. Eastern time.

LightStream FAQs

Is LightStream good for personal loans?

LightStream may be a good option if you qualify and need to borrow a large amount without putting down collateral. The lender doesn’t charge any fees, offers a rate beat program, may fund the loan within the same business day, and allows applicants to sign up with a co-borrower.

What credit score do you need for a LightStream loan?

According to LightStream, customers need a credit score of at least 660 to qualify for one of its personal loans. Additionally, customers with several years’ worth of a credit history, an assorted credit mix, and a strong payment history will have a better chance at qualifying.

Can I get a LightStream personal loan with bad credit?

Customers with poor credit likely won’t qualify for a LightStream personal loan. If your credit score needs work and you need to borrow money, check out other lenders that offer personal loans for bad credit.

Does a LightStream loan hurt your credit?

Taking out any type of personal loan may influence your credit in a couple of ways. The loan application usually results in a hard inquiry, which can lower your credit score temporarily. But getting a personal loan may improve your credit mix, which could help your credit score. Additionally, making consistent on-time payments could also improve your credit over time.