Momus

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https://www.lightstream.com/

I found this on Boglehead forum. Word is you can borrow up to $100k unsecured (no collateral) towards a new car purchase. Application is done online, you need excellent credit, and money will be deposited ACH push to your account. You can reduce your student loan to 1.99%!? (ethically wrong lol)

Looks like many people already took advantage of it.
 
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anewmanx

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* The APR listed is for an unsecured loan between $10,000 and $24,999 with a term between 24 and 36 months, for the purpose of New Auto Purchase. Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay repayment option. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. If your application does not qualify for the unsecured AnythingLoan, LightStream may offer you a secured new/used auto loan with a higher rate based on your credit profile.
 
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BMBiology

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1.99% = inflation

That is pretty good. Makes you wonder how do they make money?
 

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for auto loan? how do u use that towards student loan?
 
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Aznfarmerboi

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I applied... and am interested up until 2.5 percent.

I will invest the 100k either through stocks, or through property/business.

The trick question is are there any loan origination fees? That can quickly kill the deal.
 
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xiphoid2010

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Of course this shows up after we paid off all our student loans...where were these 3 yrs ago?

Got to remember to revisit this when I am ready to retire and move to China. ;)
 
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someone with financial knowledge figure this out for me.....i'm down to 20k in loans, but 7% is just stupid.
 
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Aznfarmerboi

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someone with financial knowledge figure this out for me.....i'm down to 20k in loans, but 7% is just stupid.

You are essentially paying 116 dollars in interest every month. The amount of interest goes down as you pay it off.

At a 2% rate, you will be paying 33 dollars in interest every month or a savings of 83 dollars a month.

If you take out the full 100k and invest it properly, you can get 5-7 percent return conservatively. You made 3 to 5 percent profit after paying off the interest on the loan for a total profit of 3 to 5000 dollars a year.
 
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Has anybody been getting preauthorized unsecured credit lines of 100K+ to open an independent pharmacy? It comes in the mail as a debit card. This isn't a good sign. After housing they went to student loans and now subprime auto loans.
 
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There's no collateral behind the loan. If loan defaults then the unsecured creditor gets paid after the more senior secured creditors. If this is a widespread practice this means we're getting close to the end. There's no more collateral to financialize.
 

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I can understand the low rate but are they going to verify the info? what is going to stop someone from borrowing 50 k for a "car" but then use it for student loans? Is this considered fraud and what action may be taken?
 
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anewmanx

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Unless there are significant fees associated with the loan, the only way they could enjoy a profitable business model with that interest rate is laundering money.

Businesses do it here all the time in Costa Rica. There is an entire district in the capital that sells items below the cost of import, no questions asked. Why? Got to wash that money for Columbia. Same concept, you're exchanging one set of money for another at no profit... it's fishy.
 
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I can understand the low rate but are they going to verify the info? what is going to stop someone from borrowing 50 k for a "car" but then use it for student loans? Is this considered fraud and what action may be taken?


They don't care. Credit needs to expand or it's all over. Subprime housing, multiple mortages for the same property, sometimes the property didn't exist, student loans for non existent jobs, subprime auto loans with no income verification, naked short selling of US Treasuries by the big banks, selling of credit default swaps that never pay out when there's default. We export FRAUD. That is what Russia and Syria are all about. That's why Microsoft, GE, McDonalds, Cisco, Apple et al., are being bullied and shunned internationally. The rest of the world wants the IMF reforms in which the US will lose veto power. Once that is done then look out. A reset.
 

Aznfarmerboi

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...., the student loan industry
They don't care. Credit needs to expand or it's all over. Subprime housing, multiple mortages for the same property, sometimes the property didn't exist, student loans for non existent jobs, subprime auto loans with no income verification, naked short selling of US Treasuries by the big banks, selling of credit default swaps that never pay out when there's default. We export FRAUD. That is what Russia and Syria are all about. That's why Microsoft, GE, McDonalds, Cisco, Apple et al., are being bullied and shunned internationally. The rest of the world wants the IMF reforms in which the US will lose veto power. Once that is done then look out. A reset.

wtf.....

way to go off topic, in the pharmacy forum.
 
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xiphoid2010

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Good luck explaining that deposit to the mortgage underwriter. "Oh yeah, that's just a 50k sketch ball loan. No need to worry about that"

they typically only ask for last 2 months' bank statements, so you just need to wait a bit.
 

Ackj

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I thought all auto loans used the automobile in question as collateral. How can that be unsecured?

I would definitely jump on something like this (or even SoFi or the other slightly more legitimate refinancing options) but then I'd lose all the government advantages of IBR. I'm planning on being aggressive and paying them off in 4-5 years, but if SHTF I like having the option to only pay $300/month instead of $2500.
 
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anewmanx

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For a mortgage downpayment deposit funds needed to be seasoned in an account. Depending on the amount of the deposit, the underwriter may request a longer seasoning period. 3 months is pretty standard, by which time your large loan will show up on your credit report and be a part of your DTI.
 

BidingMyTime

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Your APR may differ based on loan purpose, amount, term, and your credit profile.

This catch in the fine print seems to be what everyone is missing. My guess is people with no credit or bad credit are getting significantly higher APR's than 1.99%. The 1.99% is probably for people with excellent credit who could get that anyway (my last loan was 1.99% from my bank for an auto purchase)
 

xiphoid2010

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This catch in the fine print seems to be what everyone is missing. My guess is people with no credit or bad credit are getting significantly higher APR's than 1.99%. The 1.99% is probably for people with excellent credit who could get that anyway (my last loan was 1.99% from my bank for an auto purchase)

But that's with the car as collateral. Unless I'm missing something, they are saying this one doesn't need any collateral. Unsecured loans are riskier and have higher interest rates as a result.
 

type b pharmD

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Welcome to laundry in the internet age. Because internet-facilitated financial crime is so easy a middle schooler can do it, ops like these can profit due to low absolute probability of scrutiny.

This has nothing to do with government induced credit bubbles.

It's just that in the old days, you had to "know someone" to skim like this.

Oh yeah.. It's just an unsecured "car" loan. LOL.
 
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You are essentially paying 116 dollars in interest every month. The amount of interest goes down as you pay it off.

At a 2% rate, you will be paying 33 dollars in interest every month or a savings of 83 dollars a month.

If you take out the full 100k and invest it properly, you can get 5-7 percent return conservatively. You made 3 to 5 percent profit after paying off the interest on the loan for a total profit of 3 to 5000 dollars a year.

Thank you for your input but I was inquiring about the nature of the loan itself. I don't understand how they can offer the rate unsecured which = people doing whatever they want with the money. I feel like i'm getting tricked and will pay for it later
 

anewmanx

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Hire a lawyer to review the fine print if it's something you're truly interested in. You could also verify that they truly are a subsidiary of suntrust bank before proceeding further.
 
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type b pharmD

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Thank you for your input but I was inquiring about the nature of the loan itself. I don't understand how they can offer the rate unsecured which = people doing whatever they want with the money. I feel like i'm getting tricked and will pay for it later
The catch is that if you don't pay it back , they will sue you and if you don't spend it on a car, they will likely try to get you prosecuted for fraud. If you scam them and let's say you spend it on an asset that conveniently disappears or they can't prove fraud, that is when they are going to send some friends for a visit.

If not for that last possibility, would totally take that 100k from them and put it into some Kruger rands, "lose them" hit financial reset, and come back later with a car and a house down payment.
 
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Momus

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The only "real" risk is if you default on unsecured loan, then, they will want their money back/sue you and they will attach a lien to your other assets or possibly garnishing your wages. As long as, they get their payment monthly, everyone wins. When deposit is making nothing, these loans can be bundled up and sold at open market. There is a search for yield, even if it is only 1.99%, investors will buy them.

I might take this loan if stocks dives > 20%, or I can just take a risk on buying a cheap cash flow rental property... I hate investing on margin (leverage) in general though. Right now, there is no pressing reason for me to take one. Stocks have been generous to me. S&P +8.29% YTD which is 40% of portfolio, my biggest winner in the portfolio was REITS (+20.40% YTD) and emerging markets (+12.40% YTD). Small cap value is trailing S&P +8.61%.
 
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confettiflyer

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The catch is that if you don't pay it back , they will sue you and if you don't spend it on a car, they will likely try to get you prosecuted for fraud. If you scam them and let's say you spend it on an asset that conveniently disappears or they can't prove fraud, that is when they are going to send some friends for a visit.

If not for that last possibility, would totally take that 100k from them and put it into some Kruger rands, "lose them" hit financial reset, and come back later with a car and a house down payment.

Probably not...they'll write it off and sell the debt for pennies on the dollar.

Part of me wants to say that if this ever got to court, plausible deniability on the borrower's part (but I *was* going to buy a car, but then something happened...or hell, sell the damn car you were "supposedly" financing), but there is culpability on the lender's part for failing to secure the loan. My credit union required title to the car or else my 2% car loan reverted to a 17.99% within 60 days of the transaction.

But...chances are if you can't pay back the loan, pursuing a civil judgement against you will probably go nowhere. You're probably bankrupt and will file soon anyway.

If you plan to defraud the bank, the way you should do it is take the $100k and miss some payments, and before the 180 day mark (sometime between 160-180 days) come to a settlement for like $25k. Set aside taxes for the 1099-C that'll be issued and you'll net around ~$50k. Of course your credit will be trashed, but hey it'll bounce back in 3-4 years!
 
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HouTX

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http://www.bogleheads.org/forum/viewtopic.php?f=2&t=146234

Original thread. People are approved @ 50k loan at 1.99%!

member on bogleheads experience.. not mine

UPDATE - Over three weeks after closing and funding our loan, my husband received a letter saying he was randomly selected for a loan use verification audit. They want to see the sales contract from his auto purchase to verify that's what we used the loan for. I don't know how often they do these audits or how random they really are, but BEWARE of this possibility if you are thinking about getting this loan and using it for anything other than what you're stating you want it for.

If we can't or don't provide that verification, the kindly worded letter says they "might" exercise the options available to them per the terms of the loan agreement (which amount to calling the note due). Of course that contract would show that we used another auto loan for the purchase. Luckily we still have the extra cash sitting in checking, so we are just going to repay the loan to avoid having to talk with them and risk the loan being thrown into default. Even if they wanted to, I doubt anybody we'd get on the phone has the authority to waive the use of funds clause and just let us keep the loan without providing the verification. Usually it's the compliance department managing this type of thing, not any lenders or credit approvers who may be willing or able to evaluate on a case by case basis.
 

anewmanx

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Seems like the simple solution is to buy a slightly used vehicle and sell it after the verification is done. Unsecured is unsecured I suppose. Then again, I bet the loan is only for new cars that you could never sell at a reasonable value to recoup the money.
 

297point1

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If you plan to defraud the bank, the way you should do it is take the $100k and miss some payments, and before the 180 day mark (sometime between 160-180 days) come to a settlement for like $25k. Set aside taxes for the 1099-C that'll be issued and you'll net around ~$50k. Of course your credit will be trashed, but hey it'll bounce back in 3-4 years!

Society should be pleased that you utilize your powers for good and not for evil.
 

confettiflyer

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Society should be pleased that you utilize your powers for good and not for evil.

Financial transactions are neither good nor evil, they are an exercise of contracts agreed to ahead of time. A borrower opting to exercise a default clause, whether intentional or unintentional, is no different than someone who opts to exercise the "pay in full" clause of a contract. There is no morality in a contract. My information is simply reminding people of this fact!

The only human element is deciding what the greatest value is when pursuing a decision, whereas a corporation is bound by its shareholders to return maximum investment (profit).
 

confettiflyer

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Actually that $100k example was a true story as told to me by my close friend and an "investor" (I am obfuscating his actual job). It was a convoluted scheme involving combining credit card limits, taking out large cash advances, timing the payments and negotiations correctly (involving a "family member" who answered the phone of the debtor and talking "freely" about them losing their job and filing for bankruptcy soon), then parlaying the money into a more lucrative area.

He took his start-up capital of ~$70k and opened a pretty good business, which sold for a big profit. His credit was trashed for approx. 4 years, but he owned his home outright and paid cash for his modest cars. The line items on his credit report read "paid less than agreed" which is worse than "charged off" apparently.
 
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