Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.
Choose a payment term that suits you and pay $0 at closing with this online-only lender.
If you need $200,000 or less in funding, Discover offers home equity loans in a range of repayment terms — and charges nothing in closing costs. Though it’s a national bank, its loans aren’t available in Iowa, Maryland and Texas.
Zero application fees
Zero origination fees
Zero cash required at closing
Available States
Not available in: IA, MD, TX
Pros
Loans from $35,000 to $150,000
10, 12, 15, 20 or 30 year plans
Fixed rates starting at 4.99% APR
Cons
Mixed application process
Not nationwide
Limited to fixed-rate loans
Discover has been accredited with the Better Business Bureau since 1989, and holds an A+ rating for its services and operation. The BBB has recorded 877 complaints in the last three years, most of which were related to billing, collections and problems with the product or service. Customers gave Discover a 1.5-star rating based on 70 reviews. However, it’s worth pointing out that these reviews and complaints are about Discover Bank as a whole — and they’re about more than its home equity loans division.
Across other consumer forums, customers praise the personalized process, competitive interest rates, and lack of closing costs. Some said the path from application to closing can be as quick as 30 to 45 days, but Discover promises nothing on its website.
Discover waives the typical application, valuation and origination fees. It covers the closing costs so it’s unnecessary for you to bring cash to the table.
What makes Discover unique?
Discover has a few distinct offerings.
Flexible repayment terms
The lender has 10-, 12-, 15-, 20- and 30-year home equity loans, while many competitors cap their terms at 15 years. As an online bank, it can afford to offer rates that start at an aggressive 4.99% — well below the national average.
No closing costs
Discover doesn’t charge application, valuation or origination fees, or ask for cash on closing, making it a cost-effective option for many borrowers. Closing costs typically run between 2% and 5% of the loan amount, so this can translate to thousands of dollars in savings.
Personal banker
One of Discover‘s major selling points is that every applicant has the support of a personal banker. Along with answering any questions, your banker takes the time to understand your financial situation and walk you through the application process.
Do I qualify for a loan with Discover?
Discover is upfront about its borrowing requirements. To apply for a home equity loan, you’ll need:
A credit score of 620 or higher
A maximum debt-to-income ratio of 43%
At least 5% equity in your home
You must also be planning on living in the home for at least 36 months after taking out the loan.
The relatively low credit score and high loan-to-value ratio make Discover‘s home equity loans accessible for a wider range of borrowers.
What are the benefits of getting a mortgage through Discover?
With Discover, every applicant is assigned to a personal banker. The lender stands out for these reasons, too:
Flexible payment terms. Repay your loan in 10, 12, 15 or 20 years.
Competitive rates. As an online-only lender, Discover is able to offer fixed rates that are significantly lower than the national average.
No closing costs. With Discover, you’ll save on application and origination fees.
Lenient lending criteria. Discover will lend 70% to 95% of the home’s value, depending on the borrower’s credit and lien position.
Healthy loan range. You can apply for a loan between $35,000 and $200,000.
What to watch out for
Discover offers no real-time help online, which is unusual for an online bank, and you can only reach a banker by phone from Monday to Friday, 8 a.m. to 10 p.m. EST. Its home equity loans have these drawbacks:
Mixed application process. While you can begin the application online, it will ultimately be handed over to a banker.
Not nationwide. Loans aren’t available in Iowa, Maryland or Texas.
Limited to fixed-rate loans. This may turn off borrowers who want a variable rate option. Discover doesn’t offer HELOCs, either.
Why we like:
Connect with vetted home loan lenders quickly through this online marketplace.
Competitive loan offers
1,500+ lenders with reviews
Simple application
Why we like: LendingTree
Connect with vetted home loan lenders quickly through this online marketplace.
You can start your application online by answering a few questions about yourself and the property. Then, you’ll be connected to a banker to complete the process.
Get the ball rolling by following these steps:
Go to the Discover website. On the homepage, click Home Equity Loans.
Press Apply Now.
Enter your loan information:Amount, Loan Purpose (e.g. pay for education or renovate home), Property Type, Property Address, and Property Value. If you don’t know the exact value, an estimate is fine.
Type in your personal, contact and citizenship details. If you have a coapplicant, check the box.
Verify your identity by providing your date of birth, Social Security number and gender.
Consent to Discover‘s request to obtain your credit report.
You’ll receive a confirmation ID, and a banker will contact you about the next steps.
Flood insurance information, if your property is in a flood zone
Voided check or ACH form, if you’ll be receiving cash out
Self-employed? You can submit a profit and loss and balance sheet statement instead of pay stubs.
I got the home equity loan. Now what?
Monitor your home equity loan with these tips:
Register for an online account. Your welcome letter will outline the steps for setting up an online account. You’ll need your loan number, the ZIP code of the property and the last four digits of your Social Security number. Once the account is set up, you can view statements, manage payments and download tax documents.
Make timely payments. Skirt late fees by choosing a payment method that suits you. These are the options:
Online. Sign into your account to pay via a checking or savings account. You can enroll in (and cancel) automatic payments at any time.
Phone. Dial 855-295-2193 24/7.
Check. Mail a check to this address: Discover Home Equity Loans, PO Box 29029, Phoenix, AZ 85038
Contact customer service. Questions? You can reach the team by:
Phone. Call 855-295-2193 from Monday to Friday, 8 a.m. to 10 p.m. ET.
Mail. Send snail mail to: Discover Home Equity Loans, 1 Corporate Drive, Suite 360, Lake Zurich, IL 60047
Frequently asked questions
Discover offers home equity loans between $35,000 and $200,000.
You can choose to pay back your home equity loan in 10, 12, 15 or 20 years.
The closing process takes around 45 minutes. A notary will meet you at a convenient location (such as your home or office) with the loan documents for you to sign. Some states require you to have an attorney present for the closing.
No. You can start the process by filling in the form on Discover‘s website, but after that, a banker will take over the application.
Home loans ratings
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
We analyze top home loan providers and rate them one to five stars based on factors that are most important to you. These factors include: rates and fees, product selection and borrower experience.
Katia Iervasi is a writer from Sydney, Australia. Her writing — and curiosity — has taken her around the world, and she now calls New York home. With a journalistic eye for detail, she navigates insurance and finance for Finder, so you can splash your cash smartly (and be a pro when the subject pops up at dinner parties).
Expert Review
Review by
Katia Iervasi
Discover’s home equity loans are best for borrowers who need $200,000 or less in funding and prefer a predictable rate. Though it’s an online bank, you’ll need to hop on the phone with a banker to complete your application.
Expert review
Discover’s home equity loans are best for borrowers who need $200,000 or less in funding and prefer a predictable rate. Though it’s an online bank, you’ll need to hop on the phone with a banker to complete your application.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
