Credit Direct vs. LightStream: Which offers better auto loans?
Written by
Edited by
The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
Credit Direct and LightStream are unlike most lenders. Instead of offering an auto loan secured by the vehicle you purchase, you can qualify for an unsecured personal loan to buy your next car.
Credit Direct is a loan marketplace that can help you find lenders that match your needs. This makes it ideal for funding vehicles that may not meet the minimum requirements set by other lenders and for those looking to purchase a cheaper car. LightStream, on the other hand, is designed for borrowers who have excellent credit and are looking to refinance their current loan.
Credit Direct vs. LightStream at a glance
Credit Direct offers a lower starting APR, but LightStream’s autopay discount and lower maximum rate may level the playing field.
| Credit Direct | LightStream | |
|---|---|---|
| Bankrate score | 4 | 4.1 |
| Better for |
|
|
| Loans offered | Personal loans for vehicle purchases | Personal loans for vehicle purchases, auto loan refinance, lease buyouts |
| Loan amounts | $1,000-$40,000 | $5,000-$100,000 |
| APRs | 6.99%-29.99% | 7.49%-15.69% with autopay |
| Loan term lengths | 12-60 months | 24-84 months |
| Fees | Not specified | None |
| Minimum credit score | Not specified | Not specified |
| State footprint | 14 states | All states |
| Time to funding | 2-3 days | 1 day |
| Autopay discount? | Not specified | 0.50% |
| Refinancing restrictions | N/A | Not specified |
Credit Direct auto loans
-
Credit Direct does not offer traditional auto loans. Instead, you can use its personal loans to fund your car purchase. This allows you to buy a vehicle that other lenders might reject due to high mileage, low sale price or known damage.
Among personal loans, Credit Direct offers a standard product. However, you are limited to vehicles priced under $40,000. This may not be a deal breaker if you plan on buying an older used car or an inexpensive new car. However, for used vehicles with recent model years or new trucks and SUVs, a loan from Credit Direct won’t cut it — average new car prices currently exceed $47,000.
Its limited state availability may make it tricky for many borrowers to qualify. Overall, it may be worth checking your rate with Credit Direct. But you should consider more traditional financing options, including dealership financing.
LightStream auto loans
-
Unlike many fintech lenders owned by banks, LightStream does not offer secured auto loans. It also doesn’t offer prequalification, which means you will see a minor hit to your credit when you apply. While rate-shopping, you should start with lenders offering rate estimates with a soft credit check.
Despite that, LightStream is a competitive option. Its loans start at $5,000, and you may be able to fund a vehicle worth up to $100,000. Very few personal loan lenders offer this much flexibility. And if you plan on refinancing your auto loan, LightStream is worth considering — other lenders may require you to borrow $7,500 or more to qualify.
It is also one of a few lenders that do not charge any fees, including late fees, on its loans. So, while you may face higher rates because the loan is unsecured, LightStream is a solid option for funding speed and total cost.
How to choose between Credit Direct and LightStream
While both lenders offer personal loans for car purchases, they fill different needs. Credit Direct is a better choice for smaller loans. LightStream is better for funding pricier vehicles or refinancing.
Choose Credit Direct for cheaper cars
Credit Direct is a good choice for smaller loans for unusual, older and discontinued vehicles. Because its loans are capped at $40,000, you will struggle to finance a more expensive vehicle.
However, Credit Direct does not place restrictions on the vehicle you buy. You may be able to finance a car with a salvage title, vehicles older than a decade and other vehicles a traditional lender may be unwilling to finance.
However, you will need to be prepared for a higher interest rate. Credit Direct’s APR is not as high as some bad credit auto loans out there, but it could cost you hundreds more in interest than standard auto loans. Combined with its limited state availability, Credit Direct can help select borrowers — but it’s worth considering other options as well.
Choose LightStream if you want to refinance
Between LightStream’s autopay rate discount and its APR cap, borrowers with good credit may still be able to snag a competitive rate. Those with excellent credit can likely find better rates elsewhere.
However, LightStream is the better option to refinance your auto loan. Since it offers personal loans, you can stop using your vehicle as an asset and risking repossession. And since you can borrow as little as $5,000, it may be easier to refinance a loan you’re close to paying off than with a more traditional lender.
As with any refinancing — or new or used purchase, for that matter — calculate the cost and determine your potential savings. With no prequalification process, your credit score will dip after you submit an application, making it more difficult to check your rates with other lenders.
Compare more lenders before applying
Credit Direct and LightStream are both worth considering if you want to finance a nontraditional vehicle or want to avoid secured loans. But because neither offers the most competitive rates, you should compare more auto loans to see how these two lenders stack up against lenders that offer more traditional options.
Related Articles
