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Updated on Thursday, May 21, 2020
If you’re in the market for a quick, affordable and hassle-free way to finance your next car, a LightStream auto loan should definitely be on your radar. It’s particularly well-suited for deal-seekers with good credit who don’t mind working with an online company. LightStream has the backing of a brick-and-mortar bank as the online arm of Truist, the bank created by the merger of SunTrust and BB&T. But if you’d rather work with a local company that can offer in-person support, you might want to skip this lender.
- How LightStream auto loans work
- How to apply for a LightStream auto loan
- Pros and cons of LightStream auto loans
- LightStream vs. Capital One
- LightStream vs. Carvana
How LightStream auto loans work
LightStream offers a wide range of options for financing your next ride to borrowers in all 50 states, including:
- Purchase of a new or used car, either from a dealer or an individual
- Auto loan refinance (except it does not refinance its own loans)
- Auto lease buyouts
- Loans for motorcycles, as well as boats and RVs
- Classic car loans
Auto loans at a glance:
- Starting APR range: 3.49%–20.49%
- Fees: None
- Loan amounts: $5,000–$100,000
- Terms: 24–84 months
- Credit requirements: Minimum 660 credit score
- Mileage or vehicle restrictions: None
LightStream offers the same starting rate whether you’re buying a new or used car from a dealer, something you don’t see at other lenders. But keep in mind that the lowest rates go to those with the best credit who opt for the shortest loan terms possible and use autopay to make their car payments.
If you see a lower rate elsewhere, LightStream will beat any verified offer with a rate that is .10 percentage points lower. It also promises a $100 guarantee within 30 days if you aren’t satisfied with your loan experience.
How to apply for a LightStream auto loan
The only way you can apply for a LightStream auto loan is through its online form. It is an online lender, after all, so you should be comfortable with handling your business details — including the loan application — online. You’ll need to:
- Acknowledge receipt of LightStream’s statement on the use of electronic records.
- Agree to receive electronic records.
- Agree to use electronic signatures to sign your loan documents.
You’ll also need to have a Visa or Mastercard credit card to apply, which LightStream uses during the verification process.
You will be asked to provide:
- The purpose, term and amount of desired loan
- Your name
- Your address
- Phone number
- Social Security number
- Employment information
- Annual income
- Total amount of assets and equity in your home
From there, LightStream may contact you for more details and documentation. If approved, you’ll need to sign your loan documents electronically and provide LightStream with your bank account details. The money will then be deposited into your bank account, which means you’ll need to pass it along to the seller, whether that’s a dealer or private seller. LightStream will not send the money to the seller directly.
It’s important to note that LightStream doesn’t offer any pre-qualification or preapproval options, so this means that the application process above involves a hard credit pull. If you apply and are approved for a loan, you are under no obligation to accept the loan.
How to qualify for your best rates
LightStream requires good credit at a minimum, but looks for excellent credit when giving the lowest rates. It defines excellent credit as:
- Five or more years of significant credit history.
- A credit history with a variety of account types such as major credit cards (for example, Visa, MasterCard, Amex), installment debt (vehicle loans) and mortgage debt if applicable.
- An excellent payment history with no delinquencies or other problems repaying debt obligations.
- A proven ability to save as shown by some or all of the following: liquid assets (stocks, bonds, bank deposits, etc.), cash down payments on real estate, retirement savings and little, if any, revolving credit card debt.
- Stable and sufficient income and assets to easily repay current debt obligations and any new loan with LightStream.
Pros and cons of LightStream auto loans
It’s important to weigh all of your options carefully when choosing an auto loan. It’s one of the biggest purchases you’ll make, after all.
- Wide variety of loans: New, used, refinance and lease buyouts loans are available on a wide range of vehicles. Unlike other lenders, LightStream doesn’t place restrictions on your vehicle’s age, make, model or mileage.
- Decent rates: We’ve seen lower starting rates at credit unions, but you’ll have to meet membership requirements. LightStream has no membership requirements and provides the same starting rates for new and used vehicles as well as refinance loans.
- No down payment required: LightStream finances up to 100% of the car’s cost. Of course, it’s always best to put down as much as you can afford on an auto loan. This will help you save money over the life of your loan and avoid becoming underwater on that loan.
- Quick funding: If you complete the application process and are approved by 2:30 p.m. EST, you could receive funds the same day.
- Good reviews: LightStream auto loan reviews are generally positive.
- Good credit required: To qualify for a LightStream auto loan you’ll need a credit score of at least 660 or better.
- No preapproval process: Unlike many lenders, you’ll have to complete a full application in order to see your rates and terms. Still, the process is fast, and if you complete your rate shopping within a certain time period, multiple applications should not impact your credit any more than a single application.
- No face-to-face service: If you’re the type of person who likes to seal the deal with a handshake after signing the documents, you’ll want to stick with some place local.
LightStream vs. Capital One
If you’d like a bit more of a guided approach to the car-buying process, Capital One’s Auto Navigator loan options might be better for you. Rather than sending you cash directly that you can use on whatever car you want to buy, Capital One’s Auto Navigator service lets you first get prequalified for financing, and then shows you which dealers in your area may offer based on the type of car you want to buy and the financing you can afford.
If any of the offerings pique your interest, you can then finish the application and buy the car. It’s still a good idea to compare the offer with other new and used car loan rates.
LightStream vs. Carvana
Carvana works similarly to Capital One Auto Navigator in that you can prequalify for financing and browse real cars in your area that you may then be able to buy. It’s important to remember that Carvana only sells used cars and its financing is only available on Carvana cars. But it is possible to finance here with poor credit — Carvana requires borrowers to be 18 years old, have no active bankruptcies on their credit report and earn at least $4,000 per year.