Updated January 25, 2016
Automobile shopping can be stressful. Besides trying to find just the right car for you or your family, there is the additional stress of finding the right price, the right financing, as well as factoring a monthly payment into your budget.
But with more online-only banks offering auto loans at extremely competitive interest rates, the auto loan game is changing. Today, your best bet is to obtain financing before setting foot in a dealership so you have a budget to stick to and you know exactly what your monthly payment will be.
LightStream offers both secured and unsecured auto loans from $5,000 to $100,000 and rates as low as 2.19%. LightStream can get money in your account in as little as one day in some cases, and always with no fees whatsoever.
How To Apply
You can complete your LightStream auto loan application online, but you must 1) acknowledge receipt of LightStream’s Statement on the Use of Electronic Records, 2) agree to receive electronic records, and 3) agree to use electronic signature to sign your loan documents.
In order to apply, you will need:
- The purpose, term and amount of desired loan
- Your name
- Your address
- Phone number
- Social Security number
- Employment information
- Annual income
- Total amount of assets and equity in your home
During business hours, LightStream will email you regarding your application. If you are approved, you will be able to then go online, electronically sign your loan agreement, provide any additional information, as well as choose your funding and due dates. The funds will be transferred to your bank account on the funding date that you chose, on the same day in some cases.
To qualify, you must have either excellent or good credit. LightStream lists the following as criteria for excellent credit:
- Five or more years of significant credit history.
- A credit history with a variety of account types such as major credit cards (for example, Visa, MasterCard, Amex), installment debt (vehicle loans) and mortgage debt if applicable.
- An excellent payment history with no delinquencies or other problems repaying debt obligations.
- A proven ability to save evidenced by some or all of the following; liquid assets (stocks, bonds, bank deposits, etc.), cash down payments on real estate, retirement savings, and little, if any, revolving credit card debt.
- Stable and sufficient income and assets to easily repay current debt obligations and any new loan with LightStream.
Good credit is essentially the same criteria as excellent credit, as seen above, but with fewer than 5 years of credit history.
LightStream does not provide any phone customer support for loans. Instead, it offers email support in an effort to keep costs low. Because the lack of phone support is unorthodox, it offers a $100 guarantee within 30 days if you aren’t satisfied with your loan experience. If you are not satisfied and wish to claim the $100 guarantee, you must contact customer service within 30 days of your loan and fill out a questionnaire.
The Fine Print
Your APR will be based on creditworthiness, loan amount, and loan term, as seen in the chart below for an auto-loan on a new car:
Rates in the chart above are shown inclusive of a 0.50% AutoPay Discount. If you choose not to enroll in AutoPay, your rate will reflect a 0.50% increase. AutoPay payments will come directly out of your bank account. Otherwise, you can choose to pay by invoice, which must be returned by mail. You cannot make payments at a SunTrust Bank branch.
LightStream does not charge any closing or disbursement fees. It also does not charge fees for prepayment. You can prepay principal on your loan by logging into your online account.
- Rates as low as 2.19%
- Can borrow as little as $5,000 or as much as $100,000
- You can borrow for a new or used car
- Terms from 24 to 84 months
- No prepayment penalties
- No closing or disbursement fees
- Secured and unsecured loans
- APRs as high as 6.29%
- APR will increase 0.50% if you don’t enroll in AutoPay
- Excellent or good credit required for financing
How It Stacks Up
If a low APR is your priority, consider looking into an auto loan from Capital One. It offers APRs from 1.99% to 2.49% and terms of 36 to 72 months on new vehicles. There is no origination fee, but it only offers loans up to $40,000, with the option to get pre approval online before shopping.
New England Federal Credit Union is another option for an auto loan with rates from 1.45% to 13.99% and terms from 12 to 96 months on new vehicles and 84 months on used cars. NEFCU can loan up to $70,000 with no origination fee, but there is no option for pre approval.
LightStream offers a fairly straightforward auto loan experience whether you’re buying a new or used auto with low rates, long terms, and no fees for closing, disbursement, or prepayment. As with any loan, make sure that you are getting the lowest rate possible, as even one percentage lower can save you thousands of dollars in interest.
Finally, make sure that you can afford the monthly payment. Auto loan terms are getting longer, and you do not want to have an auto loan payment that is more than you can afford for 6+ years.