Discover Personal Loans Review (November 2024)

Discover offers personal loans up to $40,000 with low fixed rates, no upfront fees, and terms up to seven years. However, Discover may not be the right fit for some borrowers, such as people with bad credit, those applying with a spouse or cosigner, and those needing a larger loan. Here’s how to decide if Discover is the right lender for you.

Best for: Low-interest rate personal loans

Discover offers lower minimum annual percentage rates (APRs) than most other lenders, starting at just 7.99% APR. The lender also caps rates at a maximum of 24.99% APR. That means you may have lower monthly payments and pay less in interest over time with a Discover loan. But Discover’s lowest rates are only available to excellent credit borrowers. And because the lender offers a low maximum rate, fair credit borrowers may find it more difficult to qualify for a personal loan from Discover.

That said, Discover offers some awesome perks for borrowers who can qualify, including longer terms than some other lenders and funding as soon as the next business day. There are also no upfront fees or prepayment penalties to worry about. In addition, the lender provides extended customer service hours and a highly-rated mobile app you can use to manage your payments.

When you take out a personal loan, you pay for the privilege of borrowing in the form of interest over time. Some lenders also charge a one-time origination fee for funding the loan. If you’d like to keep more of your money, it’s important to pay attention to the annual percentage rate (APR) on your loan offer, which expresses the annual cost of borrowing, including fees, as a portion of the loan amount.

Great for: Debt Consolidation

If you’re overwhelmed with credit card or other high-interest debt, debt consolidation is one strategy to consider. According to a Discover survey, 89% of debt consolidation customers found their way out of debt faster with a Discover debt consolidation loan. Once you’re approved, you can opt to have Discover pay your creditors directly, as soon as the next business day. Just note that you can’t use a Discover personal loan to pay off a Discover credit card.

Discover pros and cons

Pros

• Low rates and no upfront fees: Discover has a starting APR of 7.99%, but excellent credit may be required to qualify. There are no upfront fees, such as an origination fee.
• Longer terms: With Discover, you can take out a personal loan for up to seven years. However, keep in mind that with a longer term, you may pay more in interest.
• Mobile app: Discover has a convenient mobile app to manage your payments.
• Direct-pay to creditors: When your funds are disbursed, you can have the money sent to your bank account or have Discover pay your creditors directly if you’re consolidating debt.
• Change your due date: Discover offers the option of changing your loan’s due date two times during the life of your loan. However, you may have to wait at least 12 months between requests.

Cons

• No rate discounts: Discover doesn’t offer any autopay or rate discounts.
• Low maximum loan amount: Discover offers personal loans up to $40,000, while some lenders offer loans up to $50,000 and $100,000 (and more).
• No cosigners or co-borrowers: Unfortunately, you can’t apply with a cosigner or co-borrower.
• Can be difficult to qualify with bad credit: If you have a FICO score below 660, you may not qualify for a Discover personal loan.

What to consider before applying for a Discover personal loan

• Make sure Discover offers the amount you need: Discover only issues loans between $2,500 and $40,000. If you need less or more than that amount, you may be better served by another lender.
• Make sure you’re using the loan for an allowable expense: You can’t use a Discover personal loan to pay for college expenses or to pay off a Discover credit card or secured loan. If you need money for any of these reasons, you may need to find another lender.

Before applying, you can prequalify with Discover to see what rates and monthly payments you may be eligible for. Prequalification usually takes a few minutes and won’t impact your credit. You’ll need to provide some personal information to get a customized estimate, and your final rate may differ from the quote. Note that once you formally apply for any loan, your credit score may dip slightly.

Discover loan details

How to qualify for a personal loan from Discover

To qualify for a personal loan from Discover, you must be at least 18 years old and have the following:

• A valid Social Security number
• A physical address
• An active email address and access to the internet
• At least $25,000 in annual household income ($40,000 or more if you apply via Credible)

The company will review your credit history when deciding whether to approve your application. If your credit score is below 660, it’s unlikely you’ll be approved for a Discover personal loan.

How to get a personal loan with Discover

1. Prequalify: Discover allows you to get an estimated rate without damaging your credit. However, note that your final rate may differ slightly. You may want to compare rates at other lenders to ensure you’re getting the lowest APR. Note that prequalification is not an offer of credit.
2. Submit required documents: If you’re happy with your estimated rate from Discover, proceed with the formal application and upload the required documents. Once you formally apply, Discover will perform a hard credit pull, which could temporarily lower your score. Required documents may include:
   1. Proof of identity, like a driver’s license or social security card
   2. Proof of employment and income, like pay stubs, bank statements, tax returns, and your employment history
   3. Proof of address, like a utility bill or credit card statement
   4. Your bank account information and, if you’re interested in direct payments, your creditors’ account numbers
3. If approved, review your offer: You’ll receive your final rate and term options if approved. Carefully read the loan documents before signing and accepting the loan offer. Discover also allows you to pick a due date, so choose something that fits within your budget, but note that you can change it up to two times over the life of your loan.
4. Receive your funds: Once you sign your loan documents, Discover can transfer the loan funds into your bank account (or to your creditors) as soon as the next business day, although it may take more time for the money to be available, depending on where you bank.

How to contact Discover

Discover has extended customer service hours between 8:00 a.m. and 11:00 p.m. ET on Monday through Friday and between 9:00 a.m. and 6:00 p.m. ET on weekends. You can get help by calling the following phone numbers:

• Application questions: 1-866-248-1255
• Payments and general questions: 1-877-256-2632

How Discover compares to other lenders

Here’s how Discover compares to two other lenders.

Methodology

Credible evaluated personal loan lenders based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, and fees. Credible’s team of experts gathered information from each lender’s website, customer service department, in-house resources, and via email support. Each data point was verified to make sure it was accurate at the time of publication.