Discover Personal Loan Review: Flexibility in Repaying Your Loan

Discover Personal Loan Review: Flexibility in Repaying Your Loan

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If you have a good to excellent credit score and want some flexibility in repaying your loan, Discover may be a great fit for a personal loan. Through Discover, you can borrow up to $35,000 with terms up to seven years, which is longer than what many other lenders offer. Discover also offers a 30-day money back guarantee on its personal loans, so if you find a better rate elsewhere, you can return your loan money with no interest charged. APRs at Discover range from 6.99% to 24.99%.

Discover Personal Loan Review: Is It a Good Choice?

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A Discover personal loan is a good choice for borrowers who have good to excellent credit scores, who want flexibility in repaying the loan or who need money quickly. With Discover, you can borrow anywhere from $2,500 to $35,000 with rates from 6.99% to 24.99%. The lender can also fund your loan within one business day, and offers the option to directly pay your creditors, making it a strong option for debt consolidation.

Good for...
Bad for...
  • Direct payment to creditors
  • Borrowers with 660+ credit scores
  • Payment flexibility
  • Borrowers with low household income
  • Joint loan applications
  • Borrowers who need more than $35k
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To qualify for a Discover personal loan, you’ll need to have a household income of at least $25,000 (because it’s household income, this means that you do not necessarily need to be employed to qualify) and a credit score of 660 or more. However, the typical Discover borrower usually has a credit score north of 700 and makes more than $25,000 per year. When applying, Discover will also consider the length of your credit history, recent credit activities and inquiries in your name.

One benefit of using Discover is the lender’s 30-day money back guarantee. If you decide within 30 days that you no longer want your loan, you can return it in full to Discover without any interest charged. You will have to return the loan amount by check via mail within 30 days of the disbursement of the loan. Bear in mind, though, that any payments made directly to your creditors cannot be retrieved under the 30-day guarantee, meaning you’re responsible for returning that money if you decide to refund the loan.

The lender offers great flexibility in how and when you pay your loan. You can pay by automatic withdrawal, check, wire transfer, electronic bill pay, mail, phone or numerous other methods without incurring any fees. Many other lenders will charge you processing fees if you decide to pay by check or wire transfer. You are also allowed to change your payment due date twice during the life of your loan, allowing you to make repayment better fit your schedule.

While the lender does charge late fees on the first day your payment is late, you can speak to a Discover representative to discuss flexible repayment options if you are having trouble repaying the loan. Finally, there are no prepayment penalties with Discover, meaning you can pay your loan balance early and save on interest.

Eligibility Criteria

To qualify for a Discover personal loan, we recommend that borrowers meet the following criteria:

  • U.S. citizen or permanent resident
  • At least 18 years old
  • At least $25,000 in household income

Discover will evaluate your credit history, your application information, planned use of funds and your ability to repay when approving you for a loan offer.

Discover Personal Loan Terms and Requirements

Discover personal loans are a good choice for debt consolidation, as you can pay off your creditors directly and the interest rates on the loan are fixed.

Loan Amount Range
$2,500 - $35,000
APR Range6.99% - 24.99%
  • No origination fee
  • Late payment fee: $39
  • NSF/returned payment fee: $39
  • No check processing fee
  • No prepayment penalty
Loan Terms3 to 7 years
Repayment OptionsMonthly
Direct Payment to CreditorsYes
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Application Process

Discover offers an online process to apply for a personal loan, and you’ll be able to check your rate without affecting your credit score. To check your rate, you’ll need to indicate the amount you need and how you plan to use the funds. You’ll also need to give Discover your personal and contact information.

Application Process
Online or by phone
Time to Get Funds1+ days
Credit Check
  • Soft credit check to get rate
  • Hard credit check when you apply
Credit ReportingYes
Cosigners/Co-borrowers Allowed?No
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After you select a loan offer, Discover will ask for more personal and financial information, including your household income, employment history, bank account information and creditor information if you’re using the loan for debt consolidation. Once your submit your application, a Discover representative may call you to verify your information, and Discover will credit a hard credit pull, which may affect your credit score. If you are approved, you’ll receive funds within a few days.

Image of Discover Personal Loan Application Process
Discover Personal Loan Application Process

How Does Discover Compare to Other Lenders?

If you’re looking for a personal loan, it’s a good idea to shop around to get the best terms and rates. We took a look at how Discover measures up to the competition.

Discover Personal Loans vs. LendingClub

  • on LendingTree's secure website
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If you can’t meet Discover’s eligibility requirements or want a cosigner on your loan, LendingClub is a good option for a personal loan. Compared to Discover, LendingClub only requires a minimum credit score of 600 and no minimum income to qualify. Through this lender, you can borrow up to $35,000 with APRs between 8.05% to 35.89%, and you will be able to pay the loan back over three or five years. However, funding at LendingClub does take longer, averaging at least seven days.

Discover Personal Loans vs. SoFi

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You can borrow up to $100,000 with SoFi, making it a better choice for borrowers who need more money that what Discover can offer. SoFi also has lower maximum rates than Discover, with APRs between 5.99% and 20.69%. Credit requirements at SoFi are the same as those at Discover, and there are no household income requirements. While SoFi is a great option for getting more money, it does take at least a few days to receive funding.

Discover Personal Loans vs. Earnest

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Earnest is a better fit for borrowers who need a personal loans for reasons besides debt consolidation or who want a cosigner on their application. Unlike other lenders, Earnest does not have strict credit, debt-to-income or income requirements. Instead, the lender looks for borrowers who are employed with enough in savings and cash flow to support loan repayment and who have little debt (excluding mortgages and student loans). A bonus of using Earnest is that the lender offers APRs from 5.99% to 17.24% and loans up to $50,000.

Madison is a former Research Analyst at ValuePenguin who focused on student loans and personal loans. She graduated from the University of Rochester with a B.A. in Financial Economics with a double minor in Business and Psychology.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.