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Lightstream Credit Card Debt Consolidation Personal Loans (4 Pros & 3 Cons). NO EXTRA or LATE FEES.

Welcome back to The Yukon Project. We’ve analyzed millions of credit reports, hundreds of thousands of people’s financial information, and designed programs to help improve people’s financial lives. Today, we’re going to look closely at the pros and cons of consolidating credit card debt with Lightstream. Lightstream is a respected personal loan provider, but would one of their loans be good for someone who is consolidating credit card debt?

Lightstream’s first pro for the Credit Card Debt Consolidation Personal Loans is their APR.

They offer loans between 9.39% and 25.99%. The low end of that range could save you a lot of money overy your current credit cards. But, 25.99% may or may not be enough of an improvement to justify consolidating with Lightstream. You should only consolidate your credit card debt if you can get an APR that is 2-3 percentage points lower than the interest rate you are currently paying on your credit cards. 

Another pro is that Lighstream doesn’t charge any extra fees. And I really mean no fees, even the fees that would be reasonable and expected. Miraculously, they don’t charge late fees if you are past-due on a payment. You also won’t be squeezed throughout the life of the loan by account maintenance fees or NSF fees. And they don’t charge an origination fee at the start of your loan. This means that the entire cost of borrowing from Lightstream will be found in their interest rate.

Lightstream accepts cosigners on their loans, but they call them co-applicants. If you can qualify for a debt consolidation loan and get the best rate on your own, there is little reason to entangle your spouse or loved-one in the process. But, more often than not, a co-applicant can allow you to be approved when you otherwise wouldn’t be or to earn a lower APR than you otherwise would have. This is especially true if your co-applicant’s credit score is better, debt-to-income ratio is lower, or income is higher. 

Lightstream lends as much as $100,000.

They are one of a couple of companies that will lend as much as a hundred grand. That’s great if you have substantial credit card debt that you would like to consolidate. But if you have substantial credit card debt, I would recommend talking with a certified debt counselor at a non-profit organization before consolidating. They can help you work through the options that might be best for you.

There are a couple of downsides to using Lightstream to consolidate your credit card debt. 

The first one is that Lightstream doesn’t offer to directly pay off your credit cards.

You’ll receive the loan funds and need to pay off your cards yourself. Some people prefer the convenience of having the lender handle this process. But there’s another reason why it’s good that a lender offers this service: it means that they understand that the loan is meant to replace other debt and won’t add to your existing debts. This should make it easier to be approved for a loan. Unfortunately, Lightstream doesn’t offer this service. 

The higher minimum loan amount is another con.

Lightstream won’t lend less than $5,000. If you only have moderate amounts of credit card debt, Lightstream may not give you a loan low enough. Taking a bigger loan could undermine the whole point of consolidating your debt in the first place. 

One of Lightstream’s cons is that they are quite restrictive on their approvals. They only lend to people with good-to-excellent credit. That probably means people with credit scores above 680. If you have a credit score lower than that, you could apply, but your chances of being approved drop dramatically. 

Lightstream may be a great option for you, but you owe it to yourself to shop around and make sure you are getting the best deal that you can get. At The Yukon Project, we’ve tried to make shopping around easy. You can visit our marketplace page and apply to one of our premium lenders. Behind the scenes we will check your rate with up to 40 lenders. The application will not affect your credit and we will show you all of the approvals so you can select the loan that is right for you. 

I have a final thought about consolidating your credit card debt. Some people see credit card consolidation loans as a great way to simplify your monthly payment. After all, you bring several bills into a single payment. While consolidation will definitely do that, it is important to remember that this is not a good reason to consolidate in and of itself. The point of consolidation is not to simplify your life. The real point of consolidation is the pay off your debt. And THAT will simplify your life. So, don’t just consolidate so you have fewer bills to pay. Consolidate when it will help you pay less interest, make bigger principal payments, and pay off your loan sooner. 

Lightstream could be a great option for consolidating your credit card debt into a single personal loan, as long as you are aware of the downsides going into it.

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Jonathan Walker