What is Discover?
Discover hasn’t been around that long (it only started in 1985), but it’s made big waves. It is known primarily for its credit cards, but believe it or not, it has a thriving banking and lending division as well.
If you’re looking for a personal loan and are able to qualify with Discover, it’s a great lender to choose because it offers consumer-friendly terms. In addition to the low rates and fees offered on its loans, the company also employs a 100% U.S.-based customer support team.
That’s not the only thing to look at when shopping around for lenders, however. In this review, we’ll cover all the details you need to know about Discover so you can make an informed decision about whether to apply for a personal loan with the company or not.
Discover Personal Loans highlights
- Nearly no fees: Discover only charges one fee — a $39 late fee. This means you won’t have to pay any origination fees, prepayment fees or application fees, either.
- Low rates: The interest rates on these loans start from 6.99% APR.
- Free FICO score: You’ll get updated FICO scores generated with TransUnion data if you’re approved for a loan.
- Minimum credit requirement: 660
- Terms: 36 to 84 months
Discover Personal Loan Details
Discover product details
If you’re using this personal loan to consolidate higher-interest debt (like credit card debt), Discover will require that at least 70% of the loan proceeds be paid to your creditors directly. You’ll have to provide Discover with the following details:
- Account numbers
- Amount to send to each creditor
- Payment address
If approved for the loan, Discover will send your creditors checks to pay off (or pay down) your balances without you having to do anything. If there’s anything left of your loan, it’ll be deposited into your checking or savings account.
If you change your mind for some reason or decide you don’t need the loan after all, Discover offers you a 30-day money-back guarantee. To claim this 30-day guarantee, you’ll need to send in a written request for loan cancellation to Discover along with a check for the full loan amount (including any money that was paid out directly to creditors, if you got a debt consolidation loan). This packet must also be received by Discover within the 30-day timeframe.
Finally, if you find that your payment due date isn’t working very well for you, Discover may allow you to change your payment due date up to twice during your loan’s lifespan, and those requests must be made at least 12 months apart.
- Minimum credit score: 660
- Minimum credit history: Not specified
- Maximum debt-to-income ratio: Not specified
Discover doesn’t publish a lot of details about its eligibility requirements. However, you must be a U.S. citizen or permanent resident, and be at least 18 years old. In addition, your household income has to be $25,000 or higher.
You can use your household income to qualify for a loan, so you yourself don’t necessarily need a job. This would be the case for a stay-at-home spouse, for example. Even though you can include income from other people in your household, you must apply as an individual. Discover does not allow you to apply with a cosigner.
Applying for a personal loan from Discover
If you’re interested in a loan from Discover, the first step is to check your rate. This won’t have any impact on your credit score.
You can do this either online on the company’s website (probably the easiest option for most people) or by calling Discover up at 1-866-248-1255. You’ll need a few pieces of information, such as your loan’s purpose (debt consolidation, auto repairs, medical expenses, etc.), your contact information, and your employment and income information. You’ll then select how much money you want to borrow, and a term length. Once you see your rate, you can then choose to proceed with the application or not.
A loan representative from Discover may call you to touch base and verify the details of your application. You could be approved for a loan as soon as the same day you apply, and have the money deposited into your account by as soon as the next day. However, if Discover needs to verify your information or you choose another loan disbursement method, this process could take up to seven days.
Pros and Cons of a Discover Personal Loan
Who’s the best fit for a Discover personal loan?
If you’re a penny-pincher who would go out of their way to avoid fees and find the lowest interest rate possible, then Discover is a good choice to investigate further. Of course, your exact interest rate depends on other factors like your credit score, but if you have a decent score chances are you’ll be offered a rate toward the lower end of the spectrum.
Discover is also a good choice for those who are interested in taking out a long-term loan, because the company offers terms all the way out to 84 months. That’s a full seven years of repayment time. This may mean you’ll be able to get ultra-low monthly payments, but you may end up paying more interest over the life of the loan compared to a shorter-term loan.
Alternative personal loan options
- APR: 3.99% – 16.99%
- Credit requirements: 660
- Terms: 24 to 144 months
- Origination fee: No origination fee
For the true rate-optimizers, we recommend checking out LightStream. This company offers the lowest interest rates of all, but to get them, of course you’ll need tip-top credit. In addition, the rates listed above are with an autopay discount, so your actual rate may be higher if you’re paying manually. These loans, like Discover, come with no origination fee and can be used for a wide range of purposes. This may also be a better lender to choose if you need an ultra-long loan, because LightStream allows you to take out loans for 24 to 144 months (i.e., 2 – 12 full years) — much longer than most other lenders, including Discover.
- APR: 5.98% – 29.99%
- Credit requirements: Minimum 660 credit score
- Terms: 36 & 60 months
- Origination fee: 1.00% - 6.00%
RocketLoans is the personal loan division of its big brother, Quicken Loans. You may be able to qualify for even lower interest rates with RocketLoans than with Discover. However, keep in mind that RocketLoans will charge you an origination fee, which Discover doesn’t do. The only way to know which loan is cheaper in the long run is to plug your numbers into a personal loan calculator to see how much total interest you’d be paying back over time.
- APR: 7.54% to 35.99%
- Credit requirements: Minimum 660 credit score
- Terms: 36 & 60 months
- Origination fee: 0.00% - 8.00% of the loan amount
If you’re looking to consolidate credit card debt specifically, you may be able to get even lower rates with Payoff. The company does not support its loans for other uses, unfortunately, but it does provide a lot of extra benefits to support its borrowers that Discover doesn’t. For example, Payoff offers job loss protection and schedules regular check-ins with you to see how your debt payoff progress is going.
Interested in a personal loan?Here are the top personal loan lenders of 2019!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.
†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com
**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|5.74% – 16.99%1||$5,000 - $100,000|
|7.54% – 35.99%||$1,000 - $50,000|
|7.99% – 35.89%*||$1,000 - $50,000|
|5.99% – 24.99%2||$5,000 - $35,000|
|5.99% – 29.99%3||$7,500 - $40,000|
|6.79% – 20.89%4||$5,000 - $50,000|
|9.99% – 35.99%5||$2,000 - $25,000|
|6.95% – 35.89%6||$1,000 - $40,000|
|6.99% – 18.24%7||$5,000 - $75,000|
|9.95% – 35.99%8||$2,000 - $35,000|