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.
- Mobile app: Discover’s mobile app has stellar user ratings and allows you to manage your personal loan and other Discover accounts with ease.
- Repayment assistance: If making payments is difficult and you’re eligible for one of the company’s payment assistance programs, Discover may grant you payment deferral or short-term or long-term assistance.
- Fast funding: Could get same-day approval and your loan funds the following business day.
- Pays creditors directly: If you get a Discover debt consolidation loan, you can choose to have Discover pay your creditors directly with the funds.
- Steep late payment fee: This lender charges a $39 fee if you make a late payment.
- Best for good-credit borrowers that value customer service: Between Discover’s repayment assistance options, seven-days-a-week customer service availability and high borrower ratings, Discover could be a great lender for those that 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 |
|---|---|
Multiple repayment term options ranging from 36 to 84 Assistance program for eligible borrowers who are having trouble making payments Excellent customer satisfaction scores No origination fee Competitive APRs | Can't borrow more than $40,000 Charges a $39 late payment fee Harder to qualify for than some other lenders No joint loans |
With a rating of 4.9 out of 5, Discover personal loans have earned nearly a perfect score from LendingTree users. 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.
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 you can’t add a co-borrower to improve your chances of approval, either.
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 will let you check your eligibility without a hard credit hit (which will impact your credit score). Prequalifying doesn’t guarantee that Discover will approve you, but it may give you an idea of what APRs 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 disburse your funds.
After the paperwork is signed, Discover will either deposit funds into your bank account or pay your creditors directly.
If you’re worried that Discover won’t approve your application because of a less-than-perfect borrowing history, there are a few ways to boost your personal loan approval odds. For instance, you could improve your debt-to-income ratio by paying off some of your current debt before applying for more.
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 | 4.5/5 | 4.4/5 | 4.3/5 |
| Minimum credit score | 720 | 560 | Not specified |
| APRs | 7.99% - 24.99% | 8.99% - 35.99% | 7.49% - 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 | Receive funds as soon as the next business day | Receive funds as soon as one business day | 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 at $5,000, its minimum loan amount is higher and it may have more stringent eligibility requirements. |
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 isn’t the hardest lender to qualify for, but it isn’t the easiest, either. If you have fair credit, you might qualify for a Discover personal loan since it has a minimum credit score of 720. However, you’ll have better chances if you have good credit or higher.
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 frivolous items. 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 could 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).