Discover vs. LightStream: Which Personal Loan Is Right for You?

Discover and LightStream are reputable lenders that offer personal loans. But the best lender for you will depend on your particular needs. Discover may be ideal if you need a smaller loan, whereas LightStream is best if you want to finance a major purchase.

MoneyGeek gathered pertinent information for this guide to help you compare Discover vs. LightStream and decide which option is most suitable.

While Discover and LightStream only accept borrowers with good credit, the latter has a lower credit score requirement. Both have quick fund disbursement times, but LightStream has higher loan amount limits and lower APRs than Discover.

In this guide, MoneyGeek further differentiates the two lenders to help you choose the best option for you. We compared their loan amounts, APR ranges, repayment terms and minimum credit score requirements.

The annual percentage rate (APR) is the interest a borrower must pay annually on a personal loan. Discover charges an APR between 5.99% and 24.99%, whereas LightStream has APRs ranging from 4.49% to 20.49%. Between the two lenders, LightStream has a more favorable APR range.

Keep in mind that your credit profile determines the rate you will get. A lender will likely offer you a lower rate if you have excellent credit, and a lower APR means you pay less.

Your credit score isn’t the only factor affecting your rate. To determine your actual rate, personal loan lenders also consider your loan type, loan amount and loan term.

Although both lenders require good credit scores, Discover has a higher credit score requirement than LightStream. Essentially, borrowers with bad credit should look for personal loans elsewhere.

Your credit score shows how reliable you are at paying debts, including personal loans. Lenders take this factor into account when evaluating your personal loan application. Having a higher credit score — typically 670 and above — can help you secure favorable loan terms, such as a low APR.

You can keep your credit score in good shape by paying your bills on time and spacing out credit inquiries. Also, avoid closing old accounts or using more than 20% of your available credit. Other factors affecting your credit score include outstanding balances and types of credit accounts.

The loan amount range refers to the minimum and maximum amount you can borrow from a lender. Discover offers personal loans from $2,500 to $35,000, whereas LightStream personal loans range between $5,000 and $100,000. Thus, Discover is ideal for borrowers looking to finance minor expenses. On the other hand, LightStream is preferable for major purchases, like a new vehicle.

Before shopping around for a personal loan, assess how much you need to borrow. You can then narrow your options to lenders offering good loan amount ranges for your particular situation.

It’s worth noting, however, that the loan amount a lender will offer you depends on several factors, such as your creditworthiness, loan term and other lender-specific criteria.

A personal loan’s repayment term dictates the amount of time you have to pay off the loan. Between Discover and LightStream, the latter has more flexible repayment terms — 36 to 84 months vs. 24 to 84 months. Your loan’s actual repayment term will depend on several factors, such as your credit score and debt-to-income ratio.

Although a longer repayment term results in a lower monthly payment, you’ll pay more interest over the life of your personal loan. Meanwhile, a shorter repayment term means you’ll have a larger monthly payment but spend less on interest. Knowing this is important when signing a loan agreement.

Both Discover and LightStream are fast-funding options for borrowers in urgent need of a personal loan. However, LightStream is slightly faster as it disburses funds on the same day you sign your loan agreement. On the other hand, Discover releases funds on the next business day.

Applying online is your best option if you want to receive your money as soon as possible. Ensure your loan application is accurate and free of typos. Otherwise, your lender may take additional time to approve your application and release the funds.

Since there’s no significant difference between Discover and LightStream’s loan disbursement times, you’ll need to consider other factors, such as loan amounts and APR ranges, when choosing the best lender for you.

Deciding between Discover and LightStream will depend on your needs. LightStream offers higher loan amounts and more flexible repayment terms than Discover. And although both lenders require good credit and have similar fund disbursement times, LightStream has a lower credit score requirement and quicker funding time.

However, Discover may be the best option if you need a personal loan of less than $5,000. It also has a 30-day money-back guarantee. If you decide you don’t want your Discover personal loan, you can return it within 30 days. The lender won’t charge any interest, and it will cancel your loan.

Ultimately, the best personal loan lender for you will depend on your particular needs. Assess your current situation and determine whether you need a lender that offers smaller loans or shorter repayment terms.

It’s important to have all the necessary information before choosing between Discover and LightStream. To help you, MoneyGeek answered some frequently asked questions about personal loans.