American Express vs. Discover: Which offers better personal loans?
Key takeaways
- American Express offers competitive rates for borrowers, but they’re exclusive to American Express customers.
- Discover offers a slightly lower minimum loan amount and longer repayment terms for personal loans.
- Ultimately, American Express is the better option if you are looking for the most competitive rates, but Discover offers features that may be helpful for certain borrower needs.
If you are looking for a personal loan, American Express (Amex) and Discover are two solid options. Amex has been offering a variety of financial products since 1850, and while Discover has only been around since 1985, it is also a trusted and well-known brand.
Both lenders offer online loans with digital tools to help customers manage their personal loans. Amex personal loans, on the other hand, are only available to those who have an Amex credit card.
American Express vs. Discover at a glance
Both Amex and Discover offer good credit personal loans with similar loan amounts, but they differ when it comes to APRs and loan term lengths offered.
| American Express | Discover | |
|---|---|---|
| Bankrate Score | 4.4 | 4.8 |
| Better for | Low APRs | Debt consolidation |
| Loan amounts | $3,500–$40,000 | $2,500–$40,000 |
| APRs | 6.90% – 19.97% | 7.99% – 24.99% |
| Loan term lengths | 12–60 months | 36–84 |
| Fees | Late payment fee, returned payment fee | Late payment fee |
| Minimum credit score | Not Specified | 660 |
| Time to funding | As soon as one day | As early as the next business day |
American Express personal loans
American Express
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To get a personal loan with American Express, you must have an active American Express consumer credit card. If you already have an American Express credit card, getting a personal loan can be a convenient way to manage multiple financial products in one place.
However, if you don’t have an Amex credit card, you will need to get one to qualify for a personal loan. Interest rates for American Express personal loans start lower than many competitors, though repayment terms are fairly standard.
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Pros
- No origination fee.
- Credit score may only be impacted if approved and loan is accepted.
- Quick loan decision.
Cons
- Can’t use funds for vehicles, unless as a down payment.
- No in-person service.
- Membership requirement.
Discover personal loans
Discover
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Discover offers unsecured personal loans that can be used for anything from wedding costs and IVF to debt consolidation and medical expenses. The only expenses loan funds cannot be used for are post-secondary education costs, paying off a secured loan or paying off a Discover credit card. Borrowers can manage their loans easily with Discover’s mobile app or online portal and take advantage of a free annual FICO credit report.
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Pros
- No upfront fees.
- Fast funding.
- Free credit report.
Cons
- No in-person service.
- Must have minimum annual income of $25,000.
- No cosigners.
How to choose between American Express and Discover
- Amex for most competitive interest rates.
- Discover for a solid debt consolidation loan option.
APR range
If you want the best APR between the two lenders, you’ll find the lowest rates through Amex — in fact, it has some of the lowest rates in the industry. Interest rates for Amex personal loans start at 6.90 percent, which is over one percent lower than the starting rate you can get with Discover.
Minimum credit score
You need to have a good credit score to qualify for a Discover personal loan. Your score must be at least 660. Amex doesn’t disclose a credit score minimum, so it’s difficult to gauge who may qualify. With Discover, you can at least get a better idea of who may qualify from the minimum.
Repayment terms
Discover offers options for a longer period for repayment than Amex, up to 84 months, allowing you to repay your debt in smaller increments over time. However, Amex allows for a shorter repayment period of just 12 months compared to 36 months with Discover, so choose the lender with term options that work best for your needs.
Loan amount
Both lenders offer almost identical loan amounts. Discover has loan amounts from $2,500 to $40,000 while Amex has loan amounts from $3,500 to $40,000. If you are looking for a small personal loan, you can get a slightly smaller loan with Discover.
Fees
Neither lender has any upfront fees, but they do have a late payment fee. Amex charges a $39 fee for late payments and any returned payments due to insufficient funds. Late payments for Discover personal loans also have a $39 late payment fee.
The bottom line: Which lender is better?
When comparing Discover and Amex personal loans, there are several factors to consider. Both loans are solid options for good credit borrowers.
However, it’s difficult to know exactly how good your credit needs to be to qualify for an Amex personal loan. Amex personal loans also aren’t open to everyone — it’s more exclusive. If you can qualify for one of its loans, it offers the more competitive interest rates between the two.
Ultimately, Amex offers the best option, if you can qualify. For those who aren’t already Amex customers, a Discover personal loan is a strong second option.
Compare lenders before applying
Discover and Amex differ when it comes to loan use restrictions, loan terms and amounts — and they’re not the only options out there. So if you’re looking for a personal loan, compare additional personal loan lenders to find the best fit for your finances.
