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Discover personal loan review

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This provider has a generous 30-day return policy, but watch out for steep late fees.

finder.com’s rating: 4.0 / 5.0

★★★★★

Bottom line: Discover makes debt consolidation easy by sending the funds to your creditors and offers a 30-day guarantee for indecisive borrowers. But you might be surprised with a late fee — there’s no grace period.

$35,000

Max. Loan Amount

6.99% to 24.99%

APR

Varies

Min. Credit Score

Details

Product NameDiscover personal loans
Min. Loan Amount$2,500
Max. Loan Amount$35,000
APR6.99% to 24.99%
Interest Rate TypeFixed
Min. Credit ScoreVaries
Late Fee$39
Loan Term3 to 7 years

Pros

  • No origination fees
  • Debt consolidation funds sent directly to creditors
  • May be able to receive your funds the next business day
  • Check your rate without affecting your credit
  • 30-day money back guarantee

Cons

  • Steep late fee and no grace period
  • Can’t use loan for education expenses
  • No autopay discount
  • Low maximum loan amount
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Review by


Kellye Guinan is a seasoned financial writer with over 500 articles under her belt spanning all things loans from auto to personal to business and everything in between. With four years in the field and five years of research experience, she's able to make complex personal finance decisions easier for everyday people to tackle. When she's not up to her knees learning about the latest trends in lending, she spends her time improving her own financial literacy and expertise.

Expert review

Discover Bank personal loans is a great loan for debt consolidation — if you’re looking to consolidate less than $35,000 in debt. It will send the funds directly to your creditors, and you only have to use 70% for debt consolidation — the other 30% can be used to cover other expenses. Discover also has a 30-day money back guarantee if you decide you don’t need your loan.

However, it doesn’t come with a rate discount for autopay like many other lenders out there. It’s also not forgiving if you’re late on a payment — there’s no grace period and it charges a $39 late fee. And you can’t use the loan for education expenses, though Discover offers student loans separately.

Not sold on Discover? Compare other options before you sign up.

Discover rates, fees and terms

Discover charges an APR from 6.99% to 24.99% with no origination fee. This isn’t the most competitive option out there, especially if you have good credit. But its long repayment terms up to 84 months may be appealing if you’re looking for low monthly payments.

Use our calculator to get an idea of how much you might pay based on your loan amount, term and Discover’s APR range.

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How Discover compares to other lenders

Compare Discover’s costs, loan amounts and requirements to two of its top competitors.

How to qualify

To qualify for a Discover personal loan, you must meet these requirements

  • Household income of at least $25,000
  • US citizen or permanent resident
  • At least 18 years old

While it doesn’t disclose a minimum credit score, you likely need to have good credit to qualify for a Discover loan. This includes credit scores over 670. By applying for preapproval, you can check your rate terms without affecting your credit.

Discover reviews and complaints

Discover Bank has a mixed track record when it comes to reviews of the customer experience. While the majority of Discover’s reviews on sites like the Better Business Bureau and Trustpilot are for its credit cards, the general consensus is that the company has poor customer service. The few comments on its personal loans are also negative.

But it came in third place in the 2020 J.D. Power Consumer Lending Customer Satisfaction Survey. The survey asked borrowers about their experiences with the application and approval process, loan management, as well as the rates and terms of the loan.

How the application works

You can apply for a Discover personal loan by phone, mail or through its website. If you on the website, the application process only takes a few minutes. A loan specialist might call you to verify your personal details if there are any questions about your application.

If approved, you may be able to receive your loan funds as soon as the next business day. However, it’s not guaranteed. If there are any errors on your application, your loan is approved on a weekend or you don’t want your funds deposited into your bank account, it could take up to seven days for your loan to be disbursed.

Are Discover personal loans legit?

Yes, Discover personal loans are legitimate. Discover Bank is a member of the FDIC and offers several other products, including credit cards, home loans, student loans and online banking. Its privacy policy is easy to follow — though it automatically shares your information with its marketing partners. You can limit information sharing by calling customer service at 877-256-2632.

What sets it apart

Discover is one of the few lenders to offer a 30-day return policy for non-consolidation expenses — like home repairs. During that time period you can return the loan without charge and it should not affect your credit score. This makes it a good option for situations where you want to have access to funds but aren’t absolutely sure you need it.

It also makes debt consolidation easier by disbursing your loan directly to your creditors, rather than giving it to you to pay off your creditors. But you can’t consolidate a secured loan with a Discover personal loan.

But its late policy is also uniquely inflexible. You’ll be charged a higher-than-average $39 late fee if as soon as you miss a repayment.

To see how Discover stacks up to the competition, read our guide to personal loans. Or if you’re looking for a different type of loan, Discover has other options available.

Frequently asked questions

Answers to common questions about Discover personal loans.

Does Discover verify income for its personal loans?

Yes, Discover verifies income for its personal loans by asking for documents like pay stubs and bank statements. It also might use your work email address to reach out to your employer to confirm your employment status.

If you make $25,000 a year on your own, you only need to verify your own income. But if you’re unemployed or make less than the minimum income, you’ll need to verify income for additional members of your household.

Can I pay off a Discover personal loan early?

Yes, you can pay off a Discover personal loan early without penalty. There are no prepayment penalties and if you pay back the loan within 30 days, Discover cancels the loan without charging any interest.

To qualify for your money back within 30 days, you must mail your request in writing along with a check for your loan balance to the following address:

Discover Personal Loans
PO Box 30954
Salt Lake City
UT 84130-0954

Discover must receive the check within 30 days of disbursing the funds. And funds that are disbursed directly to creditors for debt consolidation are ineligible for this offer.

Can I use a Discover personal loan to pay off a Discover credit card?

Yes, you can use a Discover personal loan to pay off a Discover credit card. But it won’t be as automatic as other types of debt consolidation. A representative I spoke with told me that due to banking regulations, Discover can’t pay off the account directly. Instead, it deposits the loan into your checking or savings account. After you receive the funds, you can use it to pay off your Discover balance.

But you’ll need to include other credit cards if you want to apply for a Discover debt consolidation loan. According to Discover’s application, Discover must be able to send at least 70% to your creditors.

Does Discover accept cosigners?

Like most lenders, Discover doesn’t accept cosigners on its personal loan applications. But because it considers your entire household income, so you don’t need to meet the income requirements on your own.

Personal loan ratings

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We analyze top personal loan providers and rate them one to five stars based on factors that are most important to you. These factors include: rates and fees, customer reviews, loan amounts, loan processing and borrower experience.

Read the full methodology of how we rate personal loan providers.

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