Discover Personal Loans: 2021 Review

Our Take
5.0
TalkFinance rating
The bottom line: Discover’s seamless online experience, strong customer support and borrower perks make it one of the best lenders for good-credit applicants.
Jump to: Full Review

on Discover website

MIN. CREDIT SCORE

660

EST. APR

6.99 - 24.99%

LOAN AMOUNT

$2,500 - $35,000

Pros & Cons
  • No origination fee.

  • Offers direct payment to creditors with debt consolidation loans.

  • Offers mobile app to manage loan.

  • Able to fund loans within one business day.

  • Wide variety of repayment term options.

  • Charges late fee.

  • No co-signed, joint or secured loan options.

  • No rate discount for autopay.

Compare to Other loans
TalkFinance rating
TalkFinance rating
TalkFinance rating
CHECK RATE CHECK RATE CHECK RATE
EST. APR

6.99 - 24.99%

EST. APR

4.99 - 19.63%

EST. APR

3.99 - 19.99%

LOAN TERM

3 to 7 years

LOAN TERM

2 to 7 years

LOAN TERM

2 to 7 years

MIN. CREDIT SCORE

660

MIN. CREDIT SCORE

680

MIN. CREDIT SCORE

660

Full Review

Discover offers unsecured personal loans that can be used for almost any purpose for borrowers with good credit (690 FICO or higher).

The online bank provides a quick and fully digital application process. If approved, Discover can deposit the funds in as little as one business day, and borrowers can manage loan payments from the Discover mobile app.

Discover’s rates do not include an autopay discount. However, the lender has other perks, like a wide range of repayment terms, refinancing options, a free monthly credit report and a 30-day loan guarantee.

Discover is best for borrowers who:

  • Have good or excellent credit.

  • Want to consolidate or refinance high-interest debt.

  • Want quick access to funds.

Discover at a glance

Affordability

 

 

 

  • APRs are consistent among lenders targeting similar borrowers.

  • No origination or prepayment fees.

  • Charges late fee.

  • No rate discount for autopayments.

Loan flexibility

 

 

 

  • Offers only unsecured loans.

  • Funds loans the next day.

  • Offers direct payment to creditors for debt consolidation loans.

  • Offers refinancing option.

  • Available in all 50 states.

Transparency

 

 

 

  • Soft credit check to pre-qualify.

  • Clearly discloses rates, fees and terms on website.

  • Offers FAQ that answers key borrower questions.

Customer experience

 

 

 

  • Offers multiple customer contact channels and seven-day support.

  • Offers mobile app to manage loan.

  • Provides financial education.

Where Discover stands out

Debt consolidation: Discover is one of talkfinance's best lenders for debt consolidation. It offers a consolidation calculator that shows you potential savings with a Discover personal loan. Once you apply and are approved, Discover will send loan funds directly to your creditors within one business day.

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 online financial education, including free articles about managing debt and financing major expenses with a personal loan.

30-day loan guarantee: Discover offers a unique 30-day money-back guarantee, meaning customers can return loan funds for any reason within that period and pay zero interest. Requests to cancel your loan must be made in writing, sent by mail and include a check for the amount of the loan. If you use your loan to pay creditors directly, you can’t return the funds after they have been sent.

Credit scorecard: Every month, Discover provides customers with a free FICO scorecard, which shows credit utilization, missed payments, inquiries, credit length and total accounts. This can help you keep an eye on your score and monitor changes as you pay off your loan.

Refinancing option: Borrowers can use a Discover loan to refinance an existing personal loan, either 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 falls short

No rate discount for autopay: Unlike other lenders, Discover doesn't offer a rate discount for setting up autopayments. The discount usually ranges from 0.25 to 0.5 percentage point and lowers the loan’s annual percentage rate.

Charges late fee: Discover charges a $39 late fee for missed payments after a three-day grace period. However, that’s the only fee the lender charges, meaning if you pay on time and in full, you will not pay fees on your loan.

No co-signed, joint or secured loan options: Discover offers only unsecured personal loans. This means you cannot secure a loan with collateral, nor can you add an additional borrower or co-signer to be approved at a lower rate or for a larger loan amount.

How to qualify for a Discover loan

Discover doesn’t disclose many borrower requirements, but according to the lender, it reviews credit history, recent credit activities and credit inquiries when evaluating an application. Here’s what you need to qualify:

  • Minimum credit score: 660; borrower average is 750.

  • Must be a U.S. citizen or permanent resident.

  • Must be at least 18 years old.

  • Must have a minimum household income of $25,000.

Loan example: A three-year, $10,000 loan with a 17.4% APR would cost $359 in monthly payments. You’d pay $2,924 in total interest on that loan.