LightStream is a division of SunTrust Bank (Truist), offering online debt consolidation loans for consumers looking to climb out of financial troubles.
A debt consolidation loan is a new loan you take out to pay off your old ones. Rather than making four or five payments, four or five times a month, you make one payment to one lender every month. This makes it easier to manage your debts, and should lower your interest rate in the process. It’s a common strategy that helps consumers get ahead of debts that have grown out of control.
LightStream claims that “in a four-month period, 62% of customers who took a LightStream debt consolidation loan saw their FICO® score increase by more than 20 points.”
We’ll go over some of the pros and cons of taking out a debt consolidation loan with LightStream and we’ll help you decide whether it’s the right method for getting you out of debt.
- Type of Debt Relief – Debt Consolidation Loan
- Eligibility & Requirements – Credit score of 660
- Fees – None
- Credit score impact – Minimal
- Consumer Reviews – Mixed
How LightStream’s Loan Program Works
To apply for a debt consolidation loan through LightStream, head to their website, and click on “apply now.” The entire process can be completed in a few hours, all you need is a solid internet connection. You don’t need to go anywhere or shake anyone’s hand to win approval.
When deciding whether to offer a loan, LightStream goes over your income, credit score, credit history, and debt amounts. It uses this info to decide the likelihood of you repaying the loan. If it deems you a sound enough borrower, you’ll be approved that day and can expect the funds in your account before bedtime, so long as you applied before 2:30 pm. Terms range between 24-84 months and borrowers may consolidate between $5,000 and$100,000.
LightStream Eligibility & Requirements
LightStream decides eligibility for its debt consolidation loans on a case-by-case basis. Having a high credit score won’t guarantee approval, nor does a low score mean automatic rejection. LightStream looks at your entire financial portfolio to gauge the likelihood of you paying back the loan.
Unfortunately, there’s no prequalification option, so if you’re not approved you will still have to endure a hard credit check on your credit report. If your credit score is south of 600, you’d be better off searching elsewhere or working on improving your score for a few months before applying.
A steady income and a clean credit report should help you gain approval since these are the standard marks of a reliable borrower. For your best shot at approval, aim for a credit score of at least 660.
Fees for LightStream’s Services
LightStream’s debt consolidation loan has no fees. This means you won’t have to pay an application fee or origination fee to get started, and you won’t have to suffer a prepayment penalty if you decide to ramp up the repayment process.
Most of LightStream’s debt consolidation loans have interest rates from 5.95%-19.99%. All loans are capped at 20.49%. Interest rates are fixed so you won’t have to worry about the cost of your loan fluctuating and disrupting your repayment schedule.
If you want to qualify for the lowest rate, you’ll need a high, stable income and impeccable credit. Plus, you will have to enroll in autopay for the 0.50% rate discount.
Pros & Cons of Debt Consolidation with LightStream
Pros of LightStream
- Capped interest rates – no higher than 20.49%
- Same day funding
- No fees
Cons of LightStream
- No pre-qualification options
- Minimum loan amount $5,000
On paper, the pros for LightStream’s debt consolidation loan outweigh the cons, especially for those with good credit. If you’re looking for low rates and zero fees, look no further. However, if you need even more flexibility when it comes to loan amounts or your credit score just doesn’t cut it, you may need to look elsewhere.
Is LightStream Right for Me?
A LightStream loan will work best for borrowers with comfortable incomes looking to streamline their credit card debt payments. If you have trouble keeping track of multiple due dates and are sick of getting blindsided by late fees, look into LightStream as a way to simplify your life, at least where your debts are concerned.
LightStream’s slogan is “loans for practically anything,” however, there are certain restrictions that will turn off some borrowers.
For starters, LightStream’s debt consolidation loans are for people (individual consumers) and not for small businesses or corporations. Nor can you use LightStream loans to refinance your student loans or invest in the stock market. If you already have loans with LightStream, you can’t use one of its debt consolidation loans to refinance them. Aside from these specific restrictions, you’re free to use your LightStream loan however you see fit.
Alternatives to LightStream
Maybe its approval process was too stringent or perhaps its loan restrictions won’t let you use the money how you want to. Whatever it was, you don’t have to settle with LightStream; there are plenty of other companies offering consumers debt help and plenty of other debt-relief options besides a debt consolidation loan. Here are a few to choose from:
Debt management works a lot like a debt consolidation loan without actually taking out a loan. You work with a debt management company in charge of lowering interest rate and getting your monthly payments to each of your creditors on time. You pay the debt management company once a month and it distributes the funds to the appropriate financial institutions in agreed upon terms.
You get the benefits that come with streamlining and simplifying your debts through consolidation, plus a shot at cutting down your interest rates and eliminating late fees. A debt management plan takes time. It will put restrictions on your wallet but completing the program will free you from the burden of debt without going through more crippling methods like debt-settlement or bankruptcy.
Prosper Debt Consolidation Loan
Prosper is a P2P marketplace where consumers can find personal loans for debt consolidation. To qualify for a loan with Prosper, borrowers need a credit score over 640 and a debt-to-income ratio (DTI) below 50%.
Avant Debt Consolidation Loan
Avant’s debt consolidation loans are designed for those having a hard time finding loans through traditional funding sources. It’s only asking for a 580 credit score to get your foot in the door. The downside? You pay a lot more in interest and fees compared to LightStream.
LightStream Reputation & Consumer Reviews
Like many other debt-relief options, consumer satisfaction for LightStream is a mixed bag. Some consumers are thrilled by the easy application and approval process offered by LightStream. Everything is done online, and you will know whether you’re approved soon after completing the application.
However, others feel they were misled by LightStream’s lack of information regarding the approval process. LightStream doesn’t disclose the exact qualifications it takes to win approval for a loan. This means some consumers (especially those with lower credit scores) may apply, undergo a hard credit check, and still be denied. This makes it even harder for them to win approval with the next lender.
This is partly why some lenders offer preapproval applications. Hard credit checks are a normal part of getting a loan, but preapproval applications can let consumers know whether or not they’ll be approved before going through with one.
About The Author
Bents Dulcio writes with a humble, field-level view on personal finance. He learned how to cut financial corners while acquiring a B.S. degree in Political Science at Florida State University. Bents has experience with student loans, affordable housing, budgeting to include an auto loan and other personal finance matters that greet all Millennials when they graduate. He has a prodigious appetite for reading, which he helps feed with writing from Scottish philosopher Adam Smith, the “Father of Capitalism.” Bents writing also has been published by JPMorgan Chase, TheSimpleDollar and Interest.com.
- N.A. (ND) FAQs Topics. Retrieved from https://www.lightstream.com/contact-us
- N.A. (ND) Customer Reviews: Truist Bank. Retrieved from https://www.bbb.org/us/ca/san-diego/profile/loans/truist-bank-1126-172014047/customer-reviews
- N.A. (ND) Debt Consolidation Loan. Retrieved from https://www.lightstream.com/debt-consolidation