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NerdWallet reviews the LightStream loan
In traditional banking, loans required collateral: You put up something of value (equity in your house, a lien on your car) for the right to borrow money. If a bank did make loans without collateral required, they charged higher interest rates. LightStream is among a new breed of lenders who does not require collateral, as noted in this review from NerdWallet:
“Unsecured loans, on the other hand, are made on your creditworthiness alone. With no collateral, the risk for lenders is bigger, and they charge much higher rates to make up for it. LightStream turns that business model on its head by requiring good to excellent credit for all its borrowers, then pricing loans by their purpose.”
The key is that you must have good to excellent credit to qualify for a LightStream loan. Once that is established, your interest rate will depend upon the purpose of your loan, as NerdWallet points out here:
“LightStream’s twist is that what you buy determines the interest rate you pay. If you have a credit score above 680 and a substantial credit history, LightStream has interest rates tailored for everything from buying a horse to paying for fertility treatments.”
For more on LightStream’s model and history, read the entire NerdWallet story here.