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

Upstart and LightStream are great personal loan options if you need money quickly — but the best depends on your needs and circumstances. Although both providers offer fast turnaround times after application, Upstart is likely the choice for those with less-than-stellar credit. Those with good credit may find LightStream ideal.

MoneyGeek's detailed and up-to-date information on prominent personal loan lenders in the U.S. can help you compare lenders and discover the best option for your needs.

Upstart has no credit score requirements, while LightStream offers a better repayment range and APR. Nevertheless, the better lender for you will depend on your needs and circumstances. Before choosing between Upstart and LightStream, it’s crucial to dive into each lender’s APR, credit score requirements, loan amount and repayment terms.

The annual percentage rate (APR) is the percentage of interest a borrower will pay on their loan in a given year, plus any additional costs and fees from the lender. Although Upstart has the lower starting APR among the two providers, LightStream has a significantly lower APR maximum. This is something to keep in mind since APRs often fluctuate.

You also aren’t guaranteed to get the lowest available APR. Your APR depends on numerous factors, such as your credit score, loan type, loan amount and the lender’s underwriting model.

Upstart uses AI technology to go beyond credit scores when assessing potential borrowers, allowing it to accept borrowers with little to no credit. On the other hand, LightStream uses the traditional underwriting methods, basing your loan’s APR mainly on your credit score.

Your credit score often plays a significant role in whether you can get a loan and what your terms will be. Generally, a higher score can help you secure better loan terms, such as a more favorable APR. You can only build your credit over time through consistent financial practices, like paying your monthly credit card statements in full.

Upstart and LightStream have different underwriting methods, which affect their minimum credit scores. Instead of relying on FICO scores, Upstart uses AI computation to determine borrowers' likelihood of upholding financial obligations. This means that applicants with bad or no credit may be accepted (but will still be subject to unique terms).

Conversely, LightStream requires a minimum credit score of 660. Although this requirement may be higher, it does offer a more desirable APR range and higher loan amounts in return.

The loan amount range is the minimum and maximum amount a provider is willing to lend to a borrower. Between Upstart and LightStream, the latter has a higher maximum — allowing borrowers to get up to $100,000. Therefore, LightStream would be ideal for large purchases like home renovations or a car. Conversely, Upstart personal loans can finance more minor expenses, under $5,000.

It’s best to choose a lender whose range encompasses your loan needs rather than opting for multiple small loans from different lenders. This way, it’s easier to keep track of your overall debts and payments.

The repayment term, sometimes known as the repayment period, dictates how long you will have to pay off a loan. Typically, a shorter repayment term correlates with lower interest rates. But this can still depend on your credit score and other factors.

Whether you want a shorter or longer repayment term, LightStream has a more flexible range than Upstart — two to seven years compared to three to five, respectively. However, remember that a longer repayment window has its drawbacks. Namely, you will pay more interest with a long repayment period, even if your APR is low. Keep this in mind when evaluating a lender's repayment term.

Both Upstart and LightStream provide funds at a faster rate compared to traditional lenders. Conventional lenders typically take anywhere from a few days to a few weeks. Conversely, Upstart can provide funds the next business day after signing your personal loan agreement, whereas LightStream can deliver the funds the same day.

If you have good credit and are in dire need of a loan, LightStream may be the better option. However, Upstart's next-business-day funding is equally suitable. Since there's not much difference here, which lender is best for you will depend on other factors, such as the repayment terms, APR and your approved loan amount.

Although both Upstart and LightStream offer personal loans with fast funding times, LightStream still comes out triumphant as the best personal loan lender of the two. This estimation is thanks to its lower APR range, extended repayment period, higher loan amount limits and shorter time to receive funds.

One caveat is that LightStream follows the traditional underwriting method of heavily weighing borrowers' credit scores. On the flip side, Upstart's unique underwriting method makes it more suited to individuals who have new or bad credit. Although it offers a lower maximum loan amount and has a higher APR range, it may be the better option for those who require a loan but have difficulties meeting credit requirements.

Ultimately, the best personal loan provider will depend on your needs. Evaluate your situation to determine if you need a more extended repayment period or if you need a provider who won't penalize you for your credit history.

Taking out a personal loan requires due consideration. To help you with the process, MoneyGeek answered a few frequently asked questions about personal loan lenders below.