Discover Personal Loan Review 2024: Requirements and Comparison
Did you know that Discover Personal Loan offers several customer-friendly policies, including no origination fees and direct payments for debt consolidation? That doesn’t mean it lacks a drawback thus, underlining why you should sit back to learn from this expert assessment.
Discover Personal Loan Review
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, and 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 various purposes: vacations, weddings, and, for the purposes of this article, funding a start-up business.
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:
1. 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.
2. 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.
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.
3. 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.
READ ALSO:
- Getting the Best Student Loans Without a Cosigner
- How to Get a Cashier’s Check and Why You Might Need One
- RentTrack Review: Building Your Credit By Paying Rent
- Discover Bank CD Rates: How Do They Compare?
Pros and Cons of Discover Personal Loan
Pros
- 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
Cons
- The high maximum interest rate of 24.99%
- Steep late fee and no grace period
- No autopay discount
- Low maximum loan amount
Requirements for Discover Personal Loan
Based on our Discover personal loan review, 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.
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.
How to Apply for Discover Personal Loans
Applying for a Discover personal loan is relatively straightforward.
You can begin the application process 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:
a). Your bank account and routing number if you want to deposit funds into your bank account.
b). 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:
- Instant Approval Credit Cards
- Metal Credit Cards
- What Happens If You Don’t Use Your Credit Card?
- Credit Cards Bonuses Categories
- Chase Sapphire Reserve vs Chase Sapphire
How Discover Personal Loans Compares to its Rivals
Here’s how Discover personal loans stack up against other famous lenders:
1. Discover Vs. SoFi
SoFi delivers higher loan amounts ($5,000 to $100,000) than what Discover offers, and APRs start around 9% with autopay. It may take an extended time to receive funds with a SoFi loan.
As with Discover, SoFi does not demand any origination fees or prepayment penalties, late fees are also not required with SoFi.
2. Discover Vs. LightStream
LightStream personal loans are available from $5,000 to $100,000 and APRs begin as low as 2.49% with autopay, for some loan purposes.
This indicates that LightStream borrowers with the highest credit scores can access rates much lower than the best offered by Discover.
Loan terms are also more extensive than those available via Discover—borrowers can repay a loan over two to 12 years depending on loan size, purpose, and creditworthiness.
LightStream does not demand origination fees or prepayment penalties like other top lenders.
3. Discover Vs. Marcus
Marcus presents smaller personal loans than some competitors, with options ranging from $3,500 to $40,000.
Rates commence at a similar range as Discover but max out at around 20%, which is still lower than Discover’s highest APRs.
What’s more, Marcus proposes a 0.25% discount for borrowers who enroll in autopay—a perk Discover doesn’t offer.
Marcus also favors direct payment to credit card companies and does not charge origination, prepayment, or late fees.
How Do Repayments Work with 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.
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.
Discover personal loan review must have been helpful to you, if so, be generous enough to share it with others.