Discover Personal Loan Review
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From credit cards to online banking, Discover offers a wide variety of financial products — including personal loans. Here’s a quick overview to help you decide if a Discover personal loan is right for you:
- No upfront fees: Unlike some lenders, Discover doesn’t charge an origination fee. An origination fee is an amount of money (usually a percentage of your loan) that some lenders keep for itself to cover processing and other overhead costs.
- Superior customer service: Discover has a highly rated mobile app, U.S.-based loan specialists and long customer service hours.
- Repayment assistance: If you’re having a hard time making payments and you’re eligible for one of the company’s payment assistance programs, Discover may give you payment deferral or short-term or long-term assistance.
- Fast funding (but no same-day loans): You could get approved the same day that you apply, but you will have to wait at least a business day for your money.
- Pays creditors directly: If you get a Discover debt consolidation loan, you can choose to have Discover pay your creditors directly with the funds.
- Harder to qualify for: Discover only approves 720+ credit scores, and you have to make at least $40,000 a year. These steep eligibility requirements means that Discover won’t be an option for everyone.
- Best for good-credit borrowers that value customer service: Between Discover’s repayment assistance options, onshore customer service and high borrower ratings for LendingTree users, Discover could be a great lender if you have strong enough credit to qualify.
Discover personal loan pros and cons
Taking out a personal loan isn’t a decision to take lightly, and neither is choosing a lender. Consider the pros and cons before going all in.
| Pros | Cons |
|---|---|
Can have up to 84 months to pay off your loan Financial safety nets available if you’re having trouble paying Excellent customer satisfaction scores No origination fee Competitive rates | Can only borrow up to $40,000 (many lenders offer up to $50,000 or more) Charges a $39 late payment fee (high for a personal loan) Harder to qualify for than some other lenders Can’t add a second person to your loan to boost your chances of approval |
With a rating of 4.9 out of 5, Discover has earned nearly a perfect score from LendingTree users who have used it for a personal loan. That could be due to the lender’s repayment assistance options. If you can’t make your monthly installment payment, you might be able to delay your payment, temporarily lower your payments or extend your loan term.
Or perhaps it’s because the company doesn’t charge an origination fee, or an upfront fee deducted from your loan amount. Its 84-month loan term could also provide breathing room when it’s time to repay. A longer loan term usually results in lower monthly payments (but more overall interest, so be careful).
On the other hand, Discover’s maximum loan amount is $40,000, rather low compared to some other lenders. Additionally, not all borrowers will qualify since Discover requires a minimum credit score of 720, and it doesn’t offer joint loans. That means you can’t add a co-borrower to improve your chances of approval.
Discover personal loan requirements
Before you pursue a Discover personal loan, you might want to make sure you meet its qualifications first.
| Minimum credit score | 720 |
| Minimum annual income | $40,000 (can be individual or household) |
| Residency requirements | Must have a valid U.S. Social Security number and be at least 18 years old |
| Required documents |
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| Other notable requirements |
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If you meet the basic requirements listed above, you may need to disclose how you plan to use your personal loan. While Discover does allow borrowers to use its funding for a variety of purposes, there are certain expenses you cannot put the money toward.
| Discover loans CAN be used for… | Discover loans CANNOT be used for… |
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If Discover’s loan options won’t work for your borrowing needs, be sure to shop around for a lender that helps you meet your financial goals and can offer you the best-fitting rates, terms and amounts.
Best personal loan options for:
How to get a personal loan with Discover
Discover’s application process for a personal loan is easy — just follow the steps below.
Prequalify for a loan
Prequalifying for a personal loan doesn’t guarantee that Discover will approve you, but it may give you an idea of what annual percentage rate (APR) you might qualify for.
During the process, Discover will first ask for your name and contact information. You’ll also need to specify how much money you’d like to borrow, what you need it for and how long you need to pay it back (called your loan term). If you need help with these details, use our personal loan calculator to see how a personal loan may impact your monthly budget.
Then, you’ll need to provide your employment information, basic financial information and your Social Security number (for a soft credit pull). At that point, Discover will let you know if you qualify, and at what rate.
Formally apply
If you like what you see in your Discover prequalification, it’s time to officially apply for a Discover personal loan. In addition to the information above, you may need to provide supporting documents such as pay stubs, bank statements, tax documents as well as a copy of your government-issued ID.
At this time, Discover will run a hard credit check to determine if you are truly eligible for the loan. A hard credit check may decrease your credit score, but usually minimally.
Accept your loan offer
To finalize your loan, you will need to sign your loan contract electronically. This is why Discover requires you to have Internet access to apply. You must also consent to receive electronic notifications regarding your loan. If you don’t complete these final steps, Discover will not send you your funds.
After the paperwork is signed, Discover will either deposit funds into your bank account or pay your creditors directly.
How Discover compares to other personal loan companies
Even if you believe Discover aligns with what you’re looking for in a personal loan, it never hurts to shop around and compare other lenders. Here’s how Discover stacks up against similar personal loan lenders.
| Discover | Prosper | LightStream | |
|---|---|---|---|
| LendingTree’s rating | 4.0/5 | 4.7/5 | 4.1/5 |
| Minimum credit score | 720 | 560 | Not specified |
| APRs | 7.99% - 24.99% | 8.99% - 35.99% | 6.94% - 25.29% (with autopay) |
| Loan amounts | $2,500 - $40,000 | $2,000 - $50,000 | $5,000 - $100,000 |
| Repayment term | 36 to 84 months | 24 to 60 months | 24 to 84 months |
| Origination fee | None | 1.00% - 9.99% | None |
| Funding timeline | May receive funds as soon as the next business day | May receive funds within one to five business days | May receive same-day funding |
| Bottom line | If customer service and convenience are your top priorities, Discover could be a good fit. The company provides a mobile app to manage your loan and daily customer service availability. | Prosper charges an origination fee, and its maximum APR is rather high if you have fair credit. However, it may be easier to qualify due to its lower credit score requirement of 560. | LightStream offers larger loans than Discover, but you have to borrow at least $5,000. That means it might not work if you need a small loan. |
How we rated Discover
To come up with our star rating for personal loan companies, LendingTree considered 22 data points across three categories:
- Accessibility: We paid attention to whether lenders offered loans to nontraditional borrowers, as well as those without excellent credit scores. We also checked if lenders offered soft credit pulls, and whether they were transparent about eligibility criteria other than credit scores.
- Rates and terms: We wanted to know if lender rates, terms, amounts and fees were not only transparent, but competitive.
- Repayment experience: We based this category on lenders’ reputations, customer support availability and unique benefits.
The data points reflect every step of the process to shop and apply for, borrow and repay personal loans. A five-star lender, for instance, has flexible eligibility requirements, offers you the chance to prequalify without commitment and supports you in zeroing your balance.
The 22 data points, culled from the lenders themselves, determine the overall rating. We score lenders consistently, sometimes awarding partial points, so that you can make apples-to-apples comparisons when shopping around.
LendingTree isn’t paid for conducting these reviews, and lenders don’t have control over their content. With our reviews and ratings, we aim to give our users the objective and exhaustive information they need to make the best possible decisions.
Frequently asked questions
Discover has a higher minimum credit score requirement than some lenders. Your score must be at least 720 to be eligible. You also can’t add a second person to your application, a common strategy that can help make it easier to qualify for a loan. If you’re concerned about approval, you can check rates on Discover’s website, with no impact to your credit.
Maybe, but it depends on your budget and the reason behind your loan. One missed payment can be detrimental to your credit score, so it’s essential that you can pay back what you borrow.
It’s also not great to take out a personal loan for things you don’t absolutely need, or if you have time to save. Saving up for your purchase is ideal since interest rates won’t come into play. Saving up for your purchase is ideal since interest rates won’t come into play. Still, Discover personal loans can be helpful as long as you have a full understanding of how they work and how much they’ll cost in the long term.
As long as you fill out your application completely and accurately, you will typically get an approval decision the same day you apply. After Discover approves you, it may send your funds the next day (depending on when you applied and if you opted for direct deposit).