Updated: October 29, 2024
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Discover and LightStream are reputable lenders that offer personal loans. But the best lender for you will depend on your particular needs. Discover may be ideal if you need a smaller loan, whereas LightStream is best if you want to finance a major purchase.
MoneyGeek gathered pertinent information for this guide to help you compare Discover vs. LightStream and decide which option is most suitable.
Discover and LightStream are great fast-funding options for borrowers looking to take out personal loans.
Personal loan lenders have different requirements, terms and conditions. Thus, it’s important to consider various factors when choosing the best option for your needs.
An excellent credit score can get you favorable loan terms, such as a low APR.
While Discover and LightStream only accept borrowers with good credit, the latter has a lower credit score requirement. Both have quick fund disbursement times, but LightStream has higher loan amount limits and lower APRs than Discover.
In this guide, MoneyGeek further differentiates the two lenders to help you choose the best option for you. We compared their loan amounts, APR ranges, repayment terms and minimum credit score requirements.
Best for borrowers who want a small loan with flexible repayment terms
Discover is a digital bank offering a variety of banking and credit products, including personal loans. It provides loans ranging from $2,500 to $35,000, with payment terms of three to seven years. Discover does not charge an origination fee or prepayment penalty, but you may be penalized if your payment is late.
You can use Discover personal loans for debt consolidation, home improvements, medical procedures, weddings or vacations. However, you can’t use funds to pay for postsecondary education. Likewise, you’re restricted from using the loan to pay off a secured loan or a Discover credit card.
To qualify for a Discover personal loan, you need a minimum credit score of 720 and a household income of at least $25,000. Unemployed persons can apply, provided they meet Discover’s application eligibility criteria.
Pros
Cons
Ideal for individuals who want quick access to bigger loans
Borrowers looking for a larger loan may consider LightStream. This lender offers personal loans up to $100,000 with fixed rates. However, LightStream may not be ideal if you’re looking for a loan below $5,000.
LightStream personal loans don’t come with origination, prepayment penalty and late fees. Moreover, you can get a 0.5% interest rate reduction if you set up automatic payments.
Those with a credit score of at least 660 are welcome to apply for a personal loan from LightStream. Once approved, you can use your loan for debt consolidation, home improvements and more. However, LightStream restricts you from using the money to fund postsecondary educational expenses or refinance existing loans that were used to pay for education.
Pros
Cons
Lender | APR Range |
|---|---|
Discover | 5.99% to 24.99% |
LightStream | 4.49% to 20.49% |
The annual percentage rate (APR) is the interest a borrower must pay annually on a personal loan. Discover charges an APR between 5.99% and 24.99%, whereas LightStream has APRs ranging from 4.49% to 20.49%. Between the two lenders, LightStream has a more favorable APR range.
Keep in mind that your credit profile determines the rate you will get. A lender will likely offer you a lower rate if you have excellent credit, and a lower APR means you pay less.
Your credit score isn’t the only factor affecting your rate. To determine your actual rate, personal loan lenders also consider your loan type, loan amount and loan term.
LightStream has APRs ranging from 4.49% to 20.49%, lower than the APR range Discover offers. This means LightStream personal loans with a low APR cost less over time in interest and associated fees.
However, APR isn’t the only factor to consider when choosing a personal loan lender. It’s also important to look at what each lender has to offer in terms of loan amounts and repayment terms.
Lender | Credit Score |
|---|---|
Discover | 720 |
LightStream | 660 |
Although both lenders require good credit scores, Discover has a higher credit score requirement than LightStream. Essentially, borrowers with bad credit should look for personal loans elsewhere.
Your credit score shows how reliable you are at paying debts, including personal loans. Lenders take this factor into account when evaluating your personal loan application. Having a higher credit score — typically 670 and above — can help you secure favorable loan terms, such as a low APR.
You can keep your credit score in good shape by paying your bills on time and spacing out credit inquiries. Also, avoid closing old accounts or using more than 20% of your available credit. Other factors affecting your credit score include outstanding balances and types of credit accounts.
LightStream has a lower credit score requirement (660) than Discover (720). However, neither lender accepts applicants with bad credit or those with credit scores below 580.
Consider other factors besides minimum credit score requirements when choosing the best personal loan lender for your unique needs and situation. These include loan amounts, APR ranges and repayment terms.
Lender | Loan Amount Range |
|---|---|
Discover | $2,500 to $35,000 |
LightStream | $5,000 to $100,000 |
The loan amount range refers to the minimum and maximum amount you can borrow from a lender. Discover offers personal loans from $2,500 to $35,000, whereas LightStream personal loans range between $5,000 and $100,000. Thus, Discover is ideal for borrowers looking to finance minor expenses. On the other hand, LightStream is preferable for major purchases, like a new vehicle.
Before shopping around for a personal loan, assess how much you need to borrow. You can then narrow your options to lenders offering good loan amount ranges for your particular situation.
It’s worth noting, however, that the loan amount a lender will offer you depends on several factors, such as your creditworthiness, loan term and other lender-specific criteria.
LightStream offers a broader loan amount range from $5,000 to $100,000. However, Discover may be preferable if you need a personal loan between $2,500 and $35,000. Knowing how much you need to borrow before applying is critical.
Lender | Repayment Terms |
|---|---|
Discover | 36 to 84 months |
LightStream | 24 to 84 months |
A personal loan’s repayment term dictates the amount of time you have to pay off the loan. Between Discover and LightStream, the latter has more flexible repayment terms — 36 to 84 months vs. 24 to 84 months. Your loan’s actual repayment term will depend on several factors, such as your credit score and debt-to-income ratio.
Although a longer repayment term results in a lower monthly payment, you’ll pay more interest over the life of your personal loan. Meanwhile, a shorter repayment term means you’ll have a larger monthly payment but spend less on interest. Knowing this is important when signing a loan agreement.
LightStream personal loans can be repaid within 24 to 84 months, indicating that this lender offers more flexible repayment terms than Discover. Keep in mind that a shorter repayment term means lower interest rates but higher monthly payments. It’s best to assess your repayment capabilities before getting a personal loan.
Aside from repayment terms, look into other factors when selecting the best personal loan lender for your unique situation.
Lender | Time to Receive Funds |
|---|---|
Discover | Next day |
LightStream | Same day |
Both Discover and LightStream are fast-funding options for borrowers in urgent need of a personal loan. However, LightStream is slightly faster as it disburses funds on the same day you sign your loan agreement. On the other hand, Discover releases funds on the next business day.
Applying online is your best option if you want to receive your money as soon as possible. Ensure your loan application is accurate and free of typos. Otherwise, your lender may take additional time to approve your application and release the funds.
Since there’s no significant difference between Discover and LightStream’s loan disbursement times, you’ll need to consider other factors, such as loan amounts and APR ranges, when choosing the best lender for you.
When it comes to funding disbursement, LightStream has a slight advantage over Discover because it offers same-day funding. Immediate funding is ideal for borrowers who need emergency funds. However, it’s best to consider additional factors when deciding which personal loan lender is the right option for your particular needs and situation.
Deciding between Discover and LightStream will depend on your needs. LightStream offers higher loan amounts and more flexible repayment terms than Discover. And although both lenders require good credit and have similar fund disbursement times, LightStream has a lower credit score requirement and quicker funding time.
However, Discover may be the best option if you need a personal loan of less than $5,000. It also has a 30-day money-back guarantee. If you decide you don’t want your Discover personal loan, you can return it within 30 days. The lender won’t charge any interest, and it will cancel your loan.
Ultimately, the best personal loan lender for you will depend on your particular needs. Assess your current situation and determine whether you need a lender that offers smaller loans or shorter repayment terms.
It’s important to have all the necessary information before choosing between Discover and LightStream. To help you, MoneyGeek answered some frequently asked questions about personal loans.
When applying for a personal loan, you will need to provide some documents, including a completed loan application form, proof of identity, address verification and proof of income.
You can check your credit score by contacting one of the three credit bureaus (TransUnion, Equifax or Experian). If you have a credit card, you can also reach out to your card issuer.
Yes, lenders often conduct hard credit pulls after you submit your loan application.
No, interest rates vary from lender to lender.
Some lenders have origination, prepayment penalty and late fees, while others don’t impose any charges.
Applying for a personal loan online is usually easier and more convenient. It can also help you access the funds more quickly.
Yes, you can pay off your loan earlier than scheduled. However, some lenders charge a prepayment penalty fee.
About Christopher Boston
Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.
Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.
The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.
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