Types of Debt That Can Be Consolidated
This established player offers a suite of accessible loans in amounts ranging from a minimum of $5,000 to a maximum of $100,000. You can use the funds for a variety of personal purposes, including consolidating credit card debt. SoFi built a reputation as a private student loan financer, but its expansion into personal loans has made it a strong player in the alternative lending industry.
The newcomer in this comparison offers low interest, fixed-rate loans from $5,000 to $100,000. You can use the funds to consolidate credit cards, auto, medical, and other personal debt. You cannot refinance or consolidate student loans. Depending on certain factors, funds may be disbursed as soon as the same business day if approved. The lender gives a 0.05% interest rate deduction if you sign up for automatic payments before receiving your loan funds.
The Winner: Lightstream – since the variety of personal debt eligible for consolidation is more generous. Student loan debt will likely be excluded, but most consumers seek relief from credit card and medical debt. Low interest rates and quick disbursement helps Lightstream outpace SoFi in this chase.
Consolidation Loan Size
With a credit card consolidation loan from SoFi, you’ll save substantial money on the interest you pay annually to your credit card issuer. Unless you pay off your balance every month, your high interest rates will keep you trapped in debt for decades. A balance transfer credit card is a popular option, but you’ll find much better interest rates at SoFi. Plus, you can get a consolidation loan of up to $100,000, whereas you’re generally limited to transferring no more than $25,000 in credit card debt to a new card.
In comparison, Lightstream offers similar consolidation loans up to a maximum of $100,000. You’ll escape the high interest rates on your credit cards as well as other consumer debt. Consolidation loans from Lightstream will help you get control of your debt much more quickly. Lightstream is a significant contender in the debt consolidation loan marketplace. However, it’s a bit more exclusive, seeking out borrowers with good to excellent credit.
The Winner: SoFi – while both platforms offer loans up to a maximum of $100,000, Lightstream’s preference for borrowers with excellent credit makes it less accessible to many borrowers.
Consolidation Loan Interest Rates & Duration
SoFi consolidation loans come with interest rates as low as 5.99% APR to a maximum of 18.28% APR. There’s no origination, prepayment, or annual fee. You have three to seven years to repay the loan. Under exceptional circumstances, SoFi will waive the late fee, a bonus that’s taken on special meaning during this year of economic upheaval.
Best of all, these fixed-rate consolidation loans are designed to help you reach your debt reduction target more quickly. The platform reports that most borrowers experience an increase of 22 points in their FICO score after consolidating $10,000 in credit card debt.
In this case, the consolidation loan provider has carved out a niche in the online lending world by offering interest rates as low as 5.95% APR. If you opt-out of the lender’s automatic payment program, you won’t qualify for this low rate. You won’t get it if your credit isn’t excellent, either.
The maximum rate on a Lightstream consolidation loan is 19.99% APR, and you have from 24 to 84 months to repay. Lightstream promises to beat out its competitors with its Rate Beat program. If you can prove that you’re offered the same loan terms at a better rate, Lightstream will beat it by .10 percentage points.
The Winner: The winner of this Lightstream vs. SoFi battle is SoFi but by a razor-thin margin. Its credit score requirement is a bit more favorable to most borrowers. But, if you have excellent credit, you might get better terms at Lightstream.
It should be standard practice at this point to regularly check your credit score, assess your debt-to-income ratio, and evaluate other criteria to determine your eligibility for financing. While you can qualify with a FICO score of 660, the platform offers its most competitive rates to borrowers with scores better than 700.
Depending on your circumstances, you might want to improve your credit first and then apply for a SoFi consolidation loan. Your debt-to-income ratio also plays a crucial role in establishing eligibility. You can determine your ratio in advance by dividing the total of your expenses by your gross monthly income. SoFi prefers that it doesn’t exceed 40%.
As mentioned earlier, the company prefers borrowers with a strong credit history. Lightstream believes in rewarding financially-responsible consumers. You can qualify for a consolidation loan with a credit score of at least 660, but you won’t access the best loan terms. Lightstream looks for a credit history of at least five years, with a healthy mix of account types such as installment debt, credit cards, mortgage, and other financing types.
You need to have a good payment history and demonstrate sufficient income to cover current expenses plus a new consolidation loan from Lightstream. Another factor in establishing eligibility is your ability to save. They’ll ask for retirement and other savings account balances.
The Winner: Once again, the nod goes to Sofi for being a bit more friendly to most borrowers who apply for debt consolidation loans.
Application & Approval Process
When applying for a SoFi consolidation loan, the first step is to set up an account and answer basic questions about your residency, citizenship status, income, employment, education, and how you intend to use the loan funds. Within two minutes, you’ll receive your prequalification rate. No commitment is necessary at this point.
If you’re ready to move forward, you’ll complete the full online application and upload the required documents. SoFi loan consultants are on standby to help you. It can take a week before your application is reviewed and funds are ready to be disbursed.
Here, the consolidation loan application is easy to complete. You’ll begin by selecting debt consolidation as the purpose of your loan. Next, you’ll see the potential interest rates that might be offered for this kind of loan. It takes only a few minutes to enter your details, including the loan’s purpose, the amount requested, how you’ll make repayments, and other personal information. One downside to Lightstream’s easy application process is that it doesn’t offer pre-qualification.
Once Lightstream receives your signed agreement, your funds are ready to be transferred directly to your account. You must accept the funds within 30 days; otherwise, the loan expires.
The Winner: While both platforms offer a similar application process, SoFi’s prequalification process moves it to the winner’s circle.
Quick Access To Funds
The prequalification at SoFi is a speedy process but access to funds takes a bit longer. The website states that loan funds should be available within a few days, but it can be more, especially if you need to correct any errors or omissions on your application.
This platform processes your application within hours, and once approved, the funds are ready to be paid out to your designated account within 24 hours. Assuming you don’t delay, you can have the money on the same day you applied.
The Winner: In this Lightstream vs. SoFi battle, Lightstream is a clear winner. The quick processing of your application and access to funds within 24 hours is hard to beat, especially when you need those loan funds as fast as possible.
As part of SoFi’s efforts to make loans as affordable as possible, there are no origination fees, prepayment penalties, or closing costs. If you make a late payment, you’ll face the larger of a 4% or $5 late fee. The fee isn’t assessed until you’re more than 15 days late. If there are extenuating circumstances, such as job loss due to no fault of your own, SoFi will waive the fee.
Lightstream also doesn’t charge origination fees or prepayment penalties. Unlike its peer, it doesn’t charge a late fee. There’s a benefit to setting up an automatic ACH debit through your bank account. If you prefer to pay manually, you lose out on the 0.5% autopay discount.
The Winner: Lightstream – Neither platform charges origination, closing, or prepayment fees, but the fact that Lightstream doesn’t charge a late fee makes it a winner in this matchup. Of course, falling behind in payments won’t help you rebuild your credit, one of the benefits of taking out a debt consolidation loan.
Special Benefits & Offers
SoFi allows you to modify your repayment terms. Once per year, you can change the payment due date. This is a great benefit should your income situation change. It also offers longer repayment terms than most lenders.
Perhaps the most crucial benefit is the 12-month grace period in case of job loss. You need to check in every three months to update SoFi on the status of your unemployment. You’ll still pay interest, but you have the option of making interest-only payments during this time. SoFi runs a career strategy program that you can tap into to help you find a new job.
Lightstream backs up its claim of excellent customer service by offering a $100 payment if you aren’t happy with your loan experience.
Through its Rate Beat program, Lightstream will more than match a rate offered by a competing lender for the same loan for which you’ve been approved. If you can provide satisfactory evidence that other than the interest rate the loan terms are the same, Lightstream will beat the offer by 0.10 percentage points.
The Winner: SoFi – its 12-month grace period in case of unemployment is hard to beat.
LightStream Vs. SoFi - Comparison
$5,000 - $100,000
$5,000 - $100,000
Minimum Credit Score
Application Approval Time
Within 24 hours
$5 or 4% if payment is later than 15 days
Which Is Better?
So who comes out on top in the ultimate Lightstream vs. SoFi battle? The platforms are similar in many ways. Both offer affordable consolidation loans up to $100,000, and their interest rates are competitive. Lightstream offers a faster turn around on your application and disburses your loan funds more quickly. However, a much more substantial credit history is required than most lending platforms.
In terms of overall categories, SoFi comes out ahead. It has a long history in the alternative lending market and are more accessible to a broader range of consumers. The qualification criteria are more friendly, and you’re more likely to be funded. The prequalification process is easier on your credit report as it results only in a soft pull. Protecting your credit score is vital while you decide whether the loan is good value in terms of your financial needs at the time.