When should I use streams?

Your assumption is correct. Your stream implementation is slower than the for-loop.

This stream usage should be as fast as the for-loop though:

EXCLUDE_PATHS.stream()  
    .map(String::toLowerCase)
    .anyMatch(path::contains);

This iterates through the items, applying String::toLowerCase and the filter to the items one-by-one and terminating at the first item that matches.

Both collect() & anyMatch() are terminal operations. anyMatch() exits at the first found item, though, while collect() requires all items to be processed.