We live in a golden age for personal loans. With interest rates at their lowest in living memory, obtaining a personal loan has never been cheaper. Don’t believe me? Take LightStream, the personal loans division of SunTrust Bank. Qualified borrowers can get fixed rates as low as 3.09%* APR (with AutoPay) for an unsecured new auto loan (as of January 2017). Sure, these record-low rates might soon change, if the Federal Reserve sticks to its plan of gradually raising interest rates. However, that does not change the fact that we live in a time when $100k unsecured loans with 2% APR, no origination fees, and no prepayment penalties are a reality.
So, what’s the catch? Yes, there is a catch.
LightStream’s lowest rates on unsecured personal loans are only available to borrowers with excellent credit, good jobs, and substantial savings. Do you have what it takes to qualify for a LightStream personal loan? By the time you finish this in-depth review of LightStream, you’ll know.
What Are LightStream’s Interest Rates And Terms?
LightStream provides some of the lowest interest rates in the business. In fact, LightStream is so confident about the interest rates it has created the Rate Beat Program, which will beat any other lender’s APR offer by 0.10 percentage points. See below for more details on the Rate Beat program.
One of the reasons LightStream dominates the rate game is that it bases interest rates on the purpose of the loan. This flexibility allows LightStream to differentiate loans by their inherent risk.
Check LightStream’s personal loans, auto loans, and auto refinancing profiles for their latest rates.
As of June 2018 interest rates range from 3.09% to 14.24% APR with AutoPay. Check SuperMoney’s profile on LightStream for the latest rates and terms. Basically, buying a new or used car from a dealer is the loan purpose with the lowest interest rate, and debt consolidation has the highest interest rates.
What determines the rate of your loan?
Of course, the purpose of the loan is not the only factor that determines your rate.
- Your rate depends on your personal credit profile.
- Interest rates also vary by loan amount. The larger the loan amount, the lower the interest rate. For example, a $5,000 debt consolidation loan may have an interest rate of 6.79%, but a loan for another purpose could have a much higher or lower purpose.
- How long you take to pay off a loan will also influence your APR. LightStream borrowers can choose terms of 24 to 84 months (2 to 7 years). For instance, say you get a $25,000 loan to repay medical expenses with an APR of 6.29% to be repaid in 24 months. The same loan with a 7-year term could have an APR of 8.54% to 10.29%.
LightStream’s loans have fixed interest rates, so you’ll know what your monthly payments will be for the duration of the loan. This helps borrowers avoid surprises and makes it easier for them to budget.
Please note that all the interest rates mentioned above include LightStream’s autopay discount. If you prefer not to enroll in automatic payments, add 0.50% to your rate.
LightStream’s Rate Beat Program
LightStream’s Rate Beat Program does one better than your typical price match program by beating any other lenders’ qualifying offers by 0.10 percentage points. Let’s say you shop around for the best interest rate available (as you should) and discover that another lender, such as SoFi or LendingClub, beats LightStream’s price by 0.50%. LightStream will match the offer and lower it further by 0.10%: a total saving of 0.60%.
To qualify for the Rate Beat program, borrowers must meet the following conditions::
1. You have to compare apples to apples. The competing loan has to be for the same amount, term, and purpose. LightStream only offers fixed rate terms, so the loan to beat also has to have fixed rates.
2. A third-party arrangement cannot subsidize the rate. For instance, a 0.0% APR loan offered by a car manufacturer on the purchase of a new vehicle would not qualify.
3. The interest rate to beat must be freely available to customers that share the same credit risk profile. In other words, employee-discount programs or other limited lending programs do not count.
4. Borrowers must be approved for the other lender’s rate and provide the new rate (and corroborating evidence) before 2 p.m Eastern time on the business day before LightStream funds the loan.
Who Qualifies For A LightStream Personal Loan?
LightStream is only available to borrowers with good credit and only applicants with excellent credit can qualify for its lower interest rates.
What qualifies as excellent credit?
Here are some specific characteristics borrowers with excellent credit share:
- Five or more years of credit history.
- A variety of account types: credit cards, installment loans, and mortgage debt
- No delinquencies or late payments on your history
- Proven ability to save. You must have liquid assets, such as bonds, bank deposits, and stocks
- Enough income to comfortably repay all debts
Ok, what about good credit?
What is the minimum bar to qualify for a LightStream loan?
- Several years of credit history
- A variety of account types: credit cards, installment loans, and mortgage debt
- A good payment history with only a few, if any, delinquencies
- An ability to save. Borrowers must have liquid assets, such as cash down payments on real estate, bank deposits, and stocks
- A stable source of income that is sufficient to repay current debts
How Do LightStream Personal Loans Work?
LightStream’s loan process is simple. It is not completely automated, but there are no documents to fax, no origination fees, and no prepayment penalties. Unfortunately, getting approved isn’t easy. However, the rates are so good it is worth trying. One caveat: LightStream will perform a hard credit check when you apply, whether or not you choose to go ahead with the loan.
- The first step is to apply online. More details below on what to expect from the online application.
- LightStream will email you during business hours concerning your application.
- If you are approved, log in to your account and choose your funding and monthly payment dates. This part of the process can be fast. In some cases, it is possible to get your funds within the same day of applying, if all conditions are met. You will also need to provide LightStream with a Visa or Mastercard. The card is used to confirm your identity.
What Is LightStream’s Application Process Like?
LightStream’s has a fast and easy to complete the application process. This section provides a detailed review of its online application form. LightStream makes a big deal about customer satisfaction and providing a quality customer experience. If after receiving a loan you are not happy with the experience, contact their customer care desk. As part of LightStream’s best loan experience guarantee, you’ll get $100 as part of their apology. The catch is there are some details you need to follow, including completing a questionnaire to help them improve their services.
1. Apply Online For A LightStream Personal Loan
The application is short. Just four pages with questions about your loan, finances, and employment.
2. Provide The Purpose Of The Loan
You must also choose whether you want an individual loan or you’d prefer to include someone else as a joint applicant.
3. Provide Personal Information
LightStream needs to know your full name, address, phone numbers, SSN, date of birth, the last 4 digits of your driver’s license, country of citizenship, and your employment details.
4. Choose A Password And Security Questions
Create a user ID and a password to be able to login to your account. You will also need to establish a security question and answer in case you forget your login information at a later date.
5. Check The Loan Terms And Submit Your Application
The final step involves reviewing the loan information and verifying that your personal information is accurate. Once you have read through the terms and agreements, including e-sign and electronic disclosures acknowledgment, click “Submit” and your application is complete.
That’s it. Once you submit your application, wait for LightStream’s email.
A Quick History Of LightStream
LightStream started out in 2004 when Gary Miller and Dave Zeller founded FirstAgain in San Diego, California. In 2012, SunTrust bought FirstAgain and made it its online lending division. FirstAgain changed its name to LightStream in 2013. Gary Miller has developed a knack of building successful online companies and selling them to large corporations. Before FirstAgain, Gary was the co-founder and CEO of PeopleFirst, which Capital One bought in 2001.
SunTrust is the biggest bank by assets with headquarters in Georgia and the 13th largest bank in the United States. It has $183.2 billion in assets and 1,473 branches spread over 11 states. Although LightStream is a division of SunTrust Bank, you do not have to have an account with SunTrust to qualify for a loan with LightStream.
What Are The Advantages Of LightStream’s Personal Loans?
LightStream is the Bugatti Veyron of personal loans. It has jaw-dropping specs and any borrower with a pulse would want it, but only a select few can aspire to own one.
Here are the top six advantages of LightStream personal loans:
- Rock-bottom interest rates.
- Fast application process. In some cases, funds can be deposited on the same day.
- No origination fees or prepayment penalties.
- LightStream will beat the rate of other lenders by 0.10%.
- Interest rates vary depending on the purpose of the loan.
- Easy to complete the application form and fast loan decisions.
There are two disadvantages to consider when looking at a LightStream loan:
- Only borrowers with excellent credit can qualify for lower rates.
- LightStream is not set up to rely on soft credit inquiries. When you apply, a hard inquiry will be recorded on your credit report, which could cost you a few points. Other loans perform a soft credit inquiry at the application stage and only do a hard pull when the borrower accepts the loan.
* “The APR listed is for an unsecured dealer used auto loan between $10,000 and $24,999 with a term between 24 and 36 months, for applicants with excellent credit. Your APR may differ based on loan purpose, amount, term, and your credit profile. The rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. If your application is approved, your credit profile will determine whether your loan will be unsecured or secured. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.”
Payment example: Monthly payments for a $10,000 loan at 2.49% APR with a term of 3 years would result in 36 monthly payments of $286.38.