Discover Personal Loan Review 2021: No Origination Fees

Discover personal loan is a good choice as they offer several customer-friendly policies, including no origination fees and direct payments for debt consolidation. They allow you to check your estimated loan rate without affecting your credit scores and keeps fees to a minimum.

Discover Personal Loans

Discover may be best known as a credit card issuer, but what you may not know is that Discover loans are one of only a handful of personal loans that don’t include an origination fee.

This is significant because this upfront fee, which typically ranges between 1 percent and 6 percent of the loan value, can tack on hundreds and sometimes thousands of dollars to the overall cost of a loan.

In this article we’ll look at:

Discover Personal Loan Overview

Discover was founded in 1985 as a subsidiary of Sears. Discover Financial Services is best known to the public as the issuer of the Discover card, one of the “big four” credit card brands alongside Visa, Mastercard, and American Express.

In addition to their credit card services, Discover offers personal loans to borrowers with good credit and who have a robust financial history.

Discover deals in unsecured installment loans. The borrower is sent the full loan immediately upon approval, then pays down the principal, plus interest, on a fixed monthly schedule.

These loans are marketed as a means by which consumers can pay down their debt, as Discover can send funds directly to your creditors on your behalf. (The company also offers free debt management tools.)

However, Discover’s personal loans can be used for a variety of purposes: vacations, weddings, and, for the purposes of this article, funding a start-up business.

Pros and Cons of Discover


  • 30-day return period
  • No origination, monthly service, or prepayment fees
  • Debt consolidation funds sent directly to creditors
  • May be able to receive your funds the next business day
  • Free access to your credit score


  • High maximum interest rate of 24.99%
  • Steep late fee and no grace period
  • No autopay discount
  • Low maximum loan amount

What Types of Loans Does Discover Offer?

Unlike some major banks, you won’t find mortgages and auto loans among the list of products Discover offers. Instead, it narrows its playing field down to three options:

Personal Loans

You can borrow between $2,500 and $35,000 with fixed rates from 6.99% to 24.99% APR. Discover offers terms from three to seven years, and it even has a 30-day return policy in case you decide you don’t need the loan after all.

You can use it for just about anything, except to pay for a secured loan or for post-secondary education expenses. That’s what its student loans are for.

Student Loans

Discover offers a variety of student loan options, including loans for undergraduate and graduate school, MBA programs, law and medical school, bar exam costs, and residency. And if you’re interested in refinancing your federal and private student debt, you can do that too.

Its standard undergraduate student loans start at $1,000 and go all the way up to 100% of your school-certified cost of attendance.

You have the option of fixed rates or variable rates. However, it only offers one repayment term: 15 years for all its undergraduate student loans.

Home Equity Loans

You can borrow anywhere from $35,000 to $150,000 depending on the equity you own in your home. Rates are fixed and depend on whether you’ve paid off your mortgage or not. Loans in the first-lien position come with rates that vary from 4.99% to 8.99% APR.

Meanwhile, loans in the second-lien position have the potential to go slightly higher, ranging from 4.99% to 11.99% APR. Discover offers a wide range of loan terms to choose from 10, 12, 15, 20, or 30 years.

Borrower Qualifications

The requirements for getting a Discover personal loan are as follows:

Time In Business:N/A
Credit Score:At least 660
Business Revenue:N/A

To be eligible for a Discover personal loan, you must be 18 years of age or older, a US citizen or permanent resident, and have a minimum household income of $25,000.

It should be noted, however, that most approved borrowers make more than $25K. And while a credit score of at least 660 is required for approval, AAACreditGuide reports that borrowers, on average, have a credit score of 750.

Whether you get approved for a personal loan is entirely down to Discover’s assessment of your personal creditworthiness. The details of your business (revenue, time in business, etc.) do not come into play.

One benefit of Discover Personal Loans is that they offer loans to people in all 50 US states. Many other online lenders cannot say the same.

The Discover Personal Loan Specs

The Discover Personal Loan Specs
Interest Rates6.99% – 24.99%
Loan Terms3 – 7 years
RequirementsU.S. citizen or permanent resident
Must be at least 18 years-old
Minimum annual household income of $25,000
Credit score of 660 or above
Best ForThose who want flexible repayment terms
Not ForThose who need money the same day
Standout FeaturesNo fees as long as you pay on time
Flexible loan terms
Pay your creditors directly
30-day money-back guarantee

How to Apply With Discover

Applying for a Discover personal loan is relatively straightforward. You can begin the application process either online or over the phone by calling 1-866-248-1255. You’ll probably want to start by checking the estimated rate you qualify for.

Keep in mind that to qualify, you’ll need to be a U.S. citizen or permanent resident and be at least 18 years old. Co-signers are not permitted.

To start the application process, you’ll need to enter some information about yourself:

  • The amount you want to borrow
  • Planned use for the money
  • Desired loan term in months
  • Name, address, and phone number
  • Email address
  • Employment information, including employment status and total annual income
  • Whether you have a savings or money market account
  • Monthly mortgage or rent payment
  • Social Security number
  • Date of birth
  • Whether you’re a U.S. citizen or a permanent resident

After you receive your rate quote, you can either fill out the rest of the application and apply for the loan or shop elsewhere. To complete your application, you’ll need to provide some additional information:

Your bank account and routing number if you want to deposit funds into your bank account

Information for your creditors if you want Discover to pay off your debts directly

In certain cases, Discover may call you to verify your application information and final details after you submit your application.

Read Also:

How do Repayments Work With Discover?

Discover Personal Loans

To help prevent late fees, sign up for autopay to have your repayment withdrawn from your bank account each month. You can also make extra repayments or pay off your entire balance early.

Discover doesn’t charge a prepayment penalty. And if you decide a personal loan isn’t the right choice for you, you can return your loan funds within 30 days.

However, keep up with payments: Discover doesn’t offer a grace period, and you could be on the hook for a $39 fee if your monthly payment is even a day late.


Discover Personal Loans

1. What can I use a personal loan for?

Personal loans can be used for just about any legitimate purpose, including vacations, weddings, home improvements or debt consolidation. The only two exceptions Discover makes for its personal loan products are they cant be used to pay back a secured loan or for post-secondary education expenses — that’s what its student loans are for.

2. Does Discover offer automatic repayments?

Yes. You can enroll in Discover’s automatic payment program online. But unlike some lenders, Discover doesn’t list an APR discount for taking advantage of this option.

3. Can I deduct my loan interest from my taxes?

It depends on the loan. You can’t deduct interest for a personal loan. But for student loans and home equity loans, you may be able to deduct a portion of your interest payments from your taxable income. Consult a tax advisor to learn more about what might qualify for deductions.

4. Will I have to provide collateral?

It depends. Personal loans and student loans don’t require collateral. Home equity loans will put a lien against your house. If you default, Discover may be able to take it as an asset to pay back what you borrowed.

5. Are there any restrictions on how I use my loan funds?

Yes. You can’t use your loan to pay off a secured loan or for post-secondary education.

Whether you’re looking to pay for college or a major personal expense, Discover offers a few loan products to help. They all come with minimal fees and a relatively fast turnaround, which makes it a competitive option when comparing providers.

However, you’ll need to look elsewhere if you’re interested in applying for a mortgage, personal line of credit or auto loan.

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