SoFi vs. LightStream: Which Personal Loan Is Right for You?
Updated: July 25, 2023
Advertising & Editorial Disclosure
SoFi is a fintech company known for offering flexible personal loans with no hidden fees. LightStream, a consumer lender, offers personal loans for a variety of purposes, with lower interest rates for qualified borrowers.
MoneyGeek provides helpful resources about personal loans, including deciding whether a personal loan is right for you and determining which type of personal loan best matches your needs.
If you’re considering getting a personal loan from SoFi vs. LightStream, MoneyGeek’s guide is a helpful resource that will tell you about how these lenders compare. We listed their APR ranges, loan limits, repayment terms and more.
SoFi or LightStream: Overview
MoneyGeek compared SoFi vs. LightStream based on their APR range, loan limits, repayment terms, credit score requirement and fund disbursement period. We also compared the pros and cons of getting a personal loan from each lender.
SoFi and LightStream can disburse your loan quickly and have flexible repayment terms. However, one has a lower APR range, while the other has a more flexible credit score requirement.
The best option for you will depend on your unique financial profile and funding needs.
SoFi
LightStream
APR Range
SoFi offers personal loans with an APR range of 5.74% to 20.28%. LightStream, on the other hand, offers loans with an APR range of 4.49% to 20.49%.
The annual percentage rate is the rate of interest that you need to pay back for having your loan. Lenders with a lower APR are better since it costs less to repay over the course of your loan. Take note that lenders look at your credit score and overall risk profile when calculating your loan’s APR.
Factors such as loan size, term and other variables are also considered.
Both SoFi and LightStream reward responsible borrowers with lower APR offers. However, SoFi is the better lender in this comparison because its maximum APR is lower than what LightStream offers. Even though LightStream has a lower minimum APR, you have to have a great credit score to get that low rate.
A personal loan’s APR increases the total cost of what a borrower needs to pay in total. Interest rates, especially on a longer repayment term, can add up.
However, make sure to evaluate all terms of your loan, not just the APR.
Minimum Credit Score
Credit bureaus rate borrowers’ creditworthiness by assigning them a credit score. Credit scores are a good yardstick to measure how likely you are to pay your debts. Whatever your score, lenders determine a matching APR as well as loan terms and ultimately decide whether they should approve your application. Having good credit gives you better rates, while poor scores will cause you to pay higher interest rates.
SoFi requires a credit score of 680 to be eligible for its loans. LightStream requires applicants to have a score of 660 or higher to be able to access loans.
LightStream wins this category because it has a lower minimum credit score requirement, making it accessible to more borrowers. However, keep in mind that not having enough credit or having a bad credit score may result in higher APR fees.
Be sure to evaluate more than just a lender’s minimum credit score requirement when choosing which loan provider to apply with.
Loan Amount Range
Loan amounts depend on how much you need for funding and how much a lender is willing to offer you.
A loan amount range refers to the minimum and maximum amount each lender can offer. Both SoFi and LightStream offer the same minimum loan amount of $5,000, which can be too high for some borrowers who need less. However, these lenders are both excellent choices if you need more funding. Both SoFi and LightStream allow you to borrow up to $100,000.
In this comparison, both SoFi and LightStream offer the same range of loan amounts, resulting in a tie.
Choosing a loan amount should be based on how much you need for funding. If you need a smaller loan for a minor cash emergency, you may want to consider other lenders, as SoFi and LightStream's minimum loan amounts are fairly high. Even if you get qualified for the maximum amount, you don’t want to borrow more than what you need.
Don’t forget to evaluate all terms of your potential loan before applying.
Repayment Terms
SoFi personal loan repayment terms range from 12 to 60 months, whereas LightStream allows you to repay your loan within 24 to 84 months.
Repayment terms are important since they determine your monthly payments. Longer repayment terms mean low monthly payments spread over a longer time. Shorter terms mean higher monthly payments but a faster repayment period.
Keep in mind that APRs can be higher for longer repayment terms.
LightStream has more flexible repayment terms, extending from 24 to 84 months, compared to SoFi’s 12 to 60 months.
The repayment terms you choose may also affect which APR is assigned to your loan. Shorter repayment terms get a lower APR than a longer repayment term. If you can afford to pay a higher monthly payment, you could pay off a loan much faster, which can give you a lower interest.
Repayment terms are just one factor when choosing a lender. Other factors like credit score requirements, loan amounts and APRs are equally important.
Time to Receive Funds
SoFi and LightStream disburse funds quickly. Once your SoFi personal loan is approved, you can receive the funds directly in your bank account. On the other hand, LightStream funds your loan within the same day as long as it's a banking business day.
To quicken the process of loan funding, borrowers can choose to apply online and ensure that all the relevant documents are complete.
LightStream has a slight edge in this category because it offers same-day funding and gives borrowers the option to choose their funding date.
How fast you can receive your loan could be of particular importance to you, especially when you need the funds for emergencies. The sooner a lender can release the funds to your account, the sooner you can make use of the money.
Make sure to evaluate all factors of your loan prior to applying so that you choose the best option for your financial needs.
Final Thoughts
Between SoFi and LightStream, both are contenders since they have similar loan amount ranges and disbursement periods. However, some borrowers may find one lender better than the other.
SoFi is a great choice for borrowers who want a lower maximum APR. It also has unemployment protection that helps defer payments temporarily if you lose your job.
LightStream, on the other hand, one-ups SoFi for having lower minimum APRs, offering to beat competitor rates and having a wider range of repayment terms.
Keep in mind that these recommendations are based on an average borrower profile. You will want to consider your unique financial profile and needs before choosing a lender.
Frequently Asked Questions About Personal Loan Lenders
Find out more about SoFi vs. LightStream personal loans with these frequently asked questions:
Aside from identification documents, personal loan lenders may look at your financial information, such as income, employment and debt information, to review your eligibility creditworthiness.
Borrowers can visit the Annual Credit Report website for a free credit report, which includes your credit score. You can either visit the website, request a report by phone or submit a form at their office.
Some lenders may conduct a hard credit pull upon initial application, which could hurt your score temporarily. This is why it is important to consider whether it is the right time to apply for a personal loan.
No. Each lender has an APR range offered to each borrower. You may fall into the lower range or higher range depending on your creditworthiness.
Some lenders may charge origination, prepayment and other hidden fees. It can save you a lot of money if you choose a lender that doesn’t impose these fees.
Apart from saving time from having to visit the office, applying for a personal loan online is faster as long as you have all the documents required.
Yes. However, some lenders may penalize you if you decide to pay off and terminate your loan earlier than the agreed period.
sources
- LightStream. "FAQ." Accessed September 21, 2022.
- LightStream. "LightStream Personal Loans." Accessed September 20, 2022.
- SoFi. "FAQ." Accessed September 21, 2022.
- SoFi. "SoFi Personal Loans." Accessed September 20, 2022.
The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.
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