LightStream vs. American Express: Which Personal Loan Is Right for You?
Updated: September 26, 2023
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MoneyGeek’s research helps you compare rates for two notable personal loan lenders — LightStream and American Express — so you can make an informed decision about which personal loan is best for you.
With long repayment terms and high loan amounts, LightStream fits borrowers who prefer to avoid shorter repayment periods. In contrast, American Express’ low APRs make it a viable option for borrowers with good credit.
LightStream or American Express: Overview
We evaluated two of the market’s leading lenders to help you decide which lender is the best for you. Both LightStream and American Express offer low APRs relative to other lenders. However, American Express has an APR range from 4.93% to 19.97%, while LightStream has an APR range from 4.49% to 20.49%.
In addition to each lender’s APR, MoneyGeek researched up-to-date information on personal loan lenders' credit score, loan amount and repayment terms so you can choose the best one for you.
LightStream
American Express
APR Range
APR stands for annual percentage rate and refers to the percentage of interest you’ll pay per year for your loan. The APR you receive is impacted by several factors, including your credit history, the loan amount, the term or length of your loan and your debt-to-income ratio.
Although American Express personal loans have a significantly lower APR range than LightStream, only American Express cardholders are eligible for its personal loans.
Personal loans from American Express have a more narrow APR range than those offered by LightStream. The lender also offers low APRs to those with good credit. A loan with a higher APR costs more over time in interest and fees than a loan with a lower one. So, if you're choosing between several financing offers, make sure to compare their APRs before making your final decision.
Minimum Credit Score
When you apply for a loan, a lender will check your credit score to determine whether they are willing to lend you money. Credit scores are based on the information found in your credit report, which is a summary of your credit history. Building a good credit score requires you to show financial responsibility through practices such as paying your monthly bills on time.
If your score is too low, lenders may deny you or charge you a higher interest rate than other borrowers with higher scores. Conversely, if your score is much higher than the lender’s requirement, you may be eligible for its lowest possible interest rate.
LightStream and American Express personal loans have the same minimum credit score requirement of 660, which is considered fair.
In this category, LightStream and American Express tied. However, if your credit score is close to the minimum requirement, you may want to consider improving it before applying. A high credit score can help you secure low-interest rates.
Keep in mind, though, that credit scores are just one factor to consider in choosing the right personal lender. Look at other aspects to arrive at a sound decision.
Loan Amount Range
The loan amount range refers to the amount you can borrow from a lender. Lenders will determine your loan eligibility and capacity for loan repayment based on your credit rating, income and more.
American Express' and LightStream's personal loan amounts are one of the biggest differences between the two lenders. The latter offers loan amounts ranging from $5,000 to $100,000. Meanwhile, American Express can only offer $3,500 up to $40,000. These figures show that LightStream can help fund large expenses, while American Express personal loans are best for those seeking a smaller loan amount.
The loan amount you need to look for depends on your current financial situation. It’s best to assess your needs first, so you don’t get a bigger loan than necessary.
The better choice in this category depends specifically on how much you need. However, most borrowers taking out big personal loans may be attracted to LightStream because it has a higher loan ceiling. Compared to American Express’ personal loan ceiling, the difference is $60,000.
However, loan amounts are not the only aspect you should look at when taking out a personal loan. Assess your needs to find the right lender for you.
Repayment Terms
The repayment term is the length of time over which you’ll repay your loan. A long repayment period correlates to a lower monthly payment; however, you’ll likely pay more in interest over the life of your loan. This isn't always true, though, because factors like your credit score and debt-to-income ratio also affect your interest rate.
LightStream and American Express tie in this category. Both offer repayment terms from 24 to 84 months. Your specific needs and circumstances will determine the repayment term most appropriate for you. Short-term loans may be best if you want to save on interest rates. Long-term loans, on the other hand, are best for those who do not want to be burdened by costly monthly payments.
LightStream and American Express personal loans offer the same repayment terms, so there is no winner for this category. However, while you can choose a repayment term that best fits your budget and ability to repay the debt, it is better to choose a short repayment term, especially if you are able to make higher monthly payments toward your principal. This would mean a lower interest rate on your loan and a simple loan repayment timetable. Consider your financial priorities before securing a repayment term.
That being said, it’s best to consider other factors besides repayment term options. Doing so will allow you to find the best personal loan lender for you.
Time to Receive Funds
LightStream and American Express are two great options for borrowers who need a fast, secure way to get funds. You may be able to get a personal loan from both lenders as soon as it’s approved.
There are, however, some factors that may cause your funding to be delayed. These include the amount you want to borrow, the length of your repayment period and your credit score.
Savvy borrowers can get speedy approvals and easy loans by applying online before visiting a lending office because most companies allow them to prequalify.
If you’re in need of funds sooner rather than later, American Express and LightStream’s personal loan funding times are nearly instantaneous. Both lenders are able to send funds as soon as they approve your application.
Being able to collect the money you need quickly is an attractive option, but take a look at your other options first. In addition to fund disbursement time, you should always compare different lenders' rates, fees and track record before choosing who to borrow from.
Final Thoughts
From this review, it’s clear that LightStream and American Express personal loans are at par with each other in many ways: similar credit score requirements, turnaround times and repayment term options.
The key differences between the two lie in availability, loan amounts and APR ranges. American Express personal loans are only available to American Express cardholders. The loan amounts offered by LightStream are higher than those of American Express, but it also has a higher maximum APR. Meanwhile, American Express may not be able to lend you a large amount of money, but it has a lower maximum APR than LightStream.
If you have a good credit history, American Express is definitely worth considering. This is especially true if you don’t intend on borrowing a larger-than-life amount — just enough to fund small projects.
Nevertheless, your decision depends on your individual circumstances, so make sure you consider all aspects of taking out a loan.
Frequently Asked Questions About Personal Loan Lenders
MoneyGeek answered borrowers’ most frequently asked questions about personal loans to help you make the best financial decision.
Depending on the lender, the required documents may differ. Applicants can prepare for the loan application process by gathering the necessary information and documents. This includes proof of identity, proof of income or employment and proof of address.
Know your credit score by requesting a free copy of your report once a year from the three credit bureaus: Equifax®, Experian®, and TransUnion®. You can also call 1-877-322-8228 toll-free for a credit report. This will allow you to keep track of your credit and spot any fraudulent activity.
Certain lenders may conduct a hard inquiry, which will affect your credit score. You can, however, look for lenders who only soft check your credit score, which allows you to evaluate their rates without harming your credit score. It is best to know your credit score beforehand and check with your lender before applying for a personal loan.
No, rates vary between lenders, but in general, they’ll be similar based on the prime rate. Different factors influence loan rates, including the lender's offer, your income and debt-to-income ratio, credit score and more.
Yes, lenders may charge origination fees, closing cost fees or late payment fees.
Online loan applications allow you to apply and get approved for a personal loan from the comfort of your home. With an online loan application, there is no need to leave your home and wait in line at the bank to apply for a loan. You can get approved in minutes with an online application.
Prepayments or early payoffs are allowed, but some lenders charge prepayment fees due to the lock-in period. If you want to avoid fees and plan to make prepayments, make sure to search the market for a loan provider with zero prepayment fees.
sources
- Consumer Financial Protection Bureau. "Understand Loan Options." Accessed September 20, 2022.
- Equifax. "How Can I Check Credit Scores?." 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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