Discover personal loans can be a smart way for borrowers with good and excellent credit to consolidate or refinance debt.
Pros
- No origination fee.
- Option to pre-qualify with a soft credit check.
- Fast funding.
- Mobile app to manage loan.
Cons
- May charge late fee.
- No co-sign or joint loan option.
- No rate discount.
Full Review
Discover accepts personal loan applications online or over the phone with a Discover loan specialist. If approved, Discover can deposit the funds in as little as one business day, and borrowers can manage loan payments from a mobile app.
Discover offers unsecured personal loans for borrowers with good or excellent credit (scores above 689). Loans are available nationwide and can be used for almost any purpose.
Unlike some competitors, Discover doesn’t offer rate discounts; however, the lender has other perks like a wide range of repayment terms and a free monthly credit scorecard.
Discover personal loans at a glance
| Minimum credit score | 660. |
| APR | 7.99% – 24.99%. |
| Fees | Late fee: $39. |
| Loan amount | $2,500 to $40,000. |
| Repayment terms | 3 to 7 years. |
| Time to fund after approval | Next business day. |
| Loan availability | Loans available in all 50 states, Puerto Rico and Washington, D.C. |
- Disclosure from Discover
Where Discover personal loans stand out
Debt consolidation: Discover is a good option for debt consolidation. The lender offers an online consolidation calculator that shows potential savings with a Discover personal loan. If approved, Discover will send loan funds directly to your creditors within one business day. A Discover personal loan, however, cannot be used to pay off a Discover credit card.
Customer support: Discover has a team of U.S.-based loan specialists available seven days a week during extended business hours to answer questions. Customers can also access the Discover Online Account Center to view their payment progress and begin the payoff process at any point in the loan term.
Refinancing option: Borrowers can use a Discover loan to refinance an existing personal loan from Discover or another lender. If you qualify for a lower rate, you could save money on interest and pay off your debt faster.
Where Discover personal loans fall short
No rate discount for autopay: Unlike other lenders, Discover doesn’t offer a discount for setting up automatic payments. A discount usually ranges from 0.25 to 0.5 percentage points, lowering the loan’s annual percentage rate.
Late fee: Discover may charge a $39 late fee for payments not received by the due date. Some lenders charge zero fees or offer a grace period for making a payment past its due date.
No co-sign, joint or secured loan options: Discover offers unsecured personal loans only, which means you cannot add a co-borrower or co-signer or secure a loan with collateral. These options typically help borrowers get approved and receive a lower rate or larger loan amount.
Do you qualify for a Discover personal loan?
Discover says it reviews credit history, recent credit activities and credit inquiries when evaluating an application. Here are Discover’s basic eligibility requirements:
- Minimum credit score: 660.
- Minimum individual or household annual income: $25,000.
- Must be at least 18 years old.
- Must have a valid U.S. Social Security number.
- Must have an active email address and access to the internet to finalize the application.
Before you apply
Check your credit. You can get your free cibil report.
Calculate your monthly payments. Use a loan caluculator to determine what APR and repayment term you’d need to get a loan with affordable monthly payments.
Make a plan to repay the loan. Review your budget to see how the loan’s monthly payments impact your cash flow. If you have to cut other expenses to repay the loan, it’s better to know that before you borrow.
Gather your documents. SoFi requires a valid U.S. or state government ID, proof of income, address and Social Security number. Having these documents handy can speed up the application process.
Compare Discover with other lenders
Personal loan lenders offer different rates, loan amounts and special features, so it pays to weigh other options. The best personal loan is usually the one with the lowest APR.
Discover is one of the best options for borrowers with excellent credit, but SoFi and LendingClub are strong lenders with wider options.
Discover vs. SoFi
Both SoFi and Discover offer borrowers fast funding and the convenience of managing a loan with an app. SoFi offers an autopay rate discount, has no required fees and accepts co-borrowers on a loan. However, SoFi’s starting rates and minimum loan amounts are higher than Discover’s.
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FAQs about Discover Personal Loans
Discover personal loans are unsecured loans offered to borrowers with good or excellent credit scores. These loans can be used for various purposes, such as debt consolidation, home improvement, or major purchases.
Discover personal loans have several advantages, including no origination fee, the option to pre-qualify with a soft credit check, fast funding, and a mobile app to manage the loan.
Some drawbacks of Discover personal loans include the possibility of a late fee, no co-sign or joint loan option, and no rate discount for automatic payments.
To qualify for a Discover personal loan, applicants must have a minimum credit score of 660, a minimum individual or household annual income of $25,000, be at least 18 years old, have a valid U.S. Social Security number, and have access to the internet to finalize the application.
Discover may charge a late fee of $39 for payments not received by the due date. However, there is no origination fee for Discover personal loans.
