Discover Personal Loan Review

Learn About Discover’s Personal Loan Rates and More

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Discover Personal Loans

Courtesy of Discover

While Discover is best known for credit card products, it also offers student loans, personal loans, home loans, and banking services like checking accounts and certificates of deposit. In 2019, Discover originated $95.9 billion in banking loans overall, including $8 billion in personal loans. You can use a Discover personal loan to pay for debt consolidation, home improvements, a wedding, medical expenses, or just about anything else you need.

  • APR Range 6.99% to 24.99%
  • Recommended Minimum Credit Score 660
  • Loan Amounts $2,500 to $35,000
  • Loan Terms Three to seven years
  • Pros and Cons
  • Fees
Pros and Cons
Pros
  • No origination fee

  • Flexible repayment terms

  • Prequalification available

  • Fast funds availability

Cons
  • No joint application or co-signer available

  • Maximum loan amount is $35,000

  • Lower credit borrowers could pay steep interest

Fees
  • Late fee: $39

Pros of Discover Loans

  • No origination fee: Some personal loan lenders charge an origination fee, or a fee your lender gets to process your loan. Discover doesn’t charge this fee.
  • Flexible repayment terms: You can have loan repayment terms as long as seven years. Along with that, you can change your due date or even return your loan within 30 days without paying interest.
  • Prequalification available: If you want to see if you’d qualify for a Discover personal loan without applying first—and without dinging your credit score—you can fill out an online prequalification form. It’ll also tell you the interest rate you’re likely to be approved for.
  • Fast payment: If your loan is approved, you can get the funds in as soon as one business day.

Cons of Discover Loans

  • No joint application or co-signer available: If you want a Discover personal loan, you’ll need to qualify based on your own credit score and financial details since it doesn’t accept co-signers, co-borrowers, or joint applications.
  • Maximum loan amount is $35,000: If you need a larger loan, you’ll need to look elsewhere.
  • Might need good credit to qualify: The majority of Discover personal loan borrowers have a 660 credit score or higher. The higher your credit score, the more likely you are to get approved.

Discover Personal Loan Rates and Terms

For borrowers with excellent credit scores, interest rates could be as low as 6.99% APR. But if you don’t have stellar credit, you could pay upwards of 24.99% APR. While high, it still may be attractive to borrowers with lower credit scores; some lenders charge rates as much as 10 percentage points higher for those with the lowest credit. 

Loan terms vary based on how much you borrow and what you’d like your monthly payment to be. Terms range from three to seven years.

How Much Can You Borrow With Discover?

You can borrow as much as $35,000 with a Discover personal loan. The minimum amount to borrow is $2,500. How much you get approved for is based on your credit score and your overall creditworthiness, which includes your income and other factors you report in the application.

There are two things you can’t use a Discover personal loan for: to pay for post-secondary education or to pay off a secured loan.

Discover Personal Loan Fees

Discover doesn’t charge origination, application, or prepayment fees. But it does charge a late payment fee of $39 if the bank does not receive your payment on time.

How to Get a Personal Loan From Discover

If you’re interested in applying for a Discover personal loan, you’ll need to meet the minimum qualifications first. You must:

  • Be a U.S. citizen or permanent resident
  • Be at least 18 years old
  • Make at least $25,000 in annual household income

You can apply online or over the phone at 1-866-248-1255. During the application, you will need to provide some personal information—this is standard across lenders. Federal law requires banks to verify account holder identity with your name, Social Security number, and more. You will also need to provide financial details relevant to your loan, such as your employment status, banking information, and more.

After you’ve submitted your application, a loan representative may contact you to verify some details. Discover provides three ways for applicants to deliver copies of supporting documents: A secure upload server, a fax number, and a U.S. postal mail address.

Final Verdict

Discover offers personal loans with low, fixed interest rates and no fees as long as you pay on time. It’s a great personal loan choice for borrowers with good credit. There’s a quick prequalification option, a fast approval process and you could get your loan as soon as the next business day.

But Discover personal loans aren’t for everyone. If you don’t qualify on your own, you may not be eligible for a personal loan. The lack of co-signer availability means that if your credit score and history aren’t very good, you can’t use someone else to vouch for your creditworthiness. Those on the higher end of fair credit may qualify, but if you have lower than a 660 credit score, you might not be eligible for a Discover personal loan and may want to find a bad or fair credit lender instead.

Article Sources

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  1. Discover. "2019 Annual Report," Summary Results Chart. Accessed May 15, 2020.

  2. Discover. "Personal Loans." Accessed May 15, 2020.

  3. Discover. "2019 Annual Report," Page 94. Accessed May 15, 2020.

  4. Discover. "Personal Loans FAQ: How much can I apply for?" Accessed May 15, 2020.

  5. Discover. "Personal Loans FAQ: What if my payment arrives late?" Accessed May 15, 2020.

  6. Federal Financial Institutions Council. "Bank Secrecy Act / Anti-Money Laundering Examination Manual," Page 47. Accessed May 15, 2020.