I’ve decided to bend the rules a little bit and focus on a non-p2p lending company called LightStream that piqued my interest with the goal of helping out the borrowers who visit this site. Just how p2p lending allows borrowers lower rates from credit cards, LightStream may offer better rates to high quality borrowers. The company offers rates that start at just 1.99%.
Although loans like this are offered elsewhere, specifically at local banks and credit unions, it seems like LightStream offers a much better user experience. We are all about convenience and certainly if I was looking for a car loan, I’d be happy to sidestep chasing around town and opt for an online-only application. Like both Lending Club and Prosper, LightStream is able to pass the cost savings from an online only application on to the borrowers.
The most important thing to realize about LightStream is that it is for high quality borrowers only. They believe that consumers who have established good credit have earned the right to a simple loan application process and excellent rates.
On their website, they advertise the AnythingLoan which ranges from $5,000 to $100,000. Using their guide, it seems like rates differ depending on the stated loan purpose. Unlike the p2p lending unsecured loan, these rates start at just 1.99%. According to the LightStream website, borrowers who meet their strict criteria usually meet the following:
- 5 or more years credit history
- Credit history with variety of account types (credit card, vehicle loan, mortgage etc.)
- Excellent payment history with no delinquencies or other problems with debt repayment
- Demonstrated ability to save (assets, stocks, bonds, bank deposits, cash down payments, retirement savings, little (or zero) revolving debt.
- Stable income
The other interesting thing about LightStream is that they currently do not charge fees of any kind and there are no prepayment penalties. Since the underlying loan for the best borrowers is an unsecured loan, LightStream is not listed as a lienholder on an AnythingLoan for a vehicle, boat, RV, or motorcycle that you paid with your loan. However, in the case that your application doesn’t qualify for the AnythingLoan, they may offer a secured auto loan and would thus need to be listed as a lien holder.
Keep in mind that although LightStream isn’t listed as a lien holder on the item purchased for their unsecured loans, they still may ask for documentation regarding the purchase.
For high quality borrowers this seems like a great option. If you can get an auto rate that doesn’t require a lien on the vehicle, it can save many headaches when it comes to buying a car. It seems like LightStream has carved itself a good niche and could be an alternative to p2p lending for the very best investors. Let me know what you think in the comments!
You can learn more about their loans at the LightStream Website