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If you are looking for a personal loan, American Express and Discover offer two options. American Express (also known as AmEx) has been offering a variety of financial products since 1850. Discover hasn’t been around quite as long. The company started in 1985 by offering their Discover Card credit card.
Both lenders offer online lending with digital tools to help customers manage their personal loans. However, American Express personal loans are only available to those who have an American Express credit card.
American Express vs. Discover at a glance
Both American Express and Discover offer personal loans with similar loan amounts, but they differ in APRs and loan term lengths offered.
|Better for||Lowest APR||Debt consolidation|
|Loan term lengths||12-48 months||36-84 months|
|Fees||Late payment fee||Late payment fee|
|Minimum credit score||Not specified||660|
|Time to funding||Typically 3-5 business days||As early as the next business day|
American Express personal loans
- No upfront fees.
- No credit score impact to apply.
- Quick loan decision.
- Can’t use funds for college or vehicles.
- No in-person service.
- Membership requirement.
To get a personal loan with American Express, you must have an active American Express Consumer Card. Other requirements include being at least 18 years old and being a U.S. citizen or resident. If you already have an American Express credit card, getting a personal loan with the company can be a convenient way to manage multiple financial products in one place.
However, if you don’t have a credit card with the company, you would need to get a new credit card to qualify for one of their personal loans. This is an inconvenient way to qualify for a loan if you aren’t already looking for a new credit card.
How does the loan measure up to competitors? Interest rates for American Express personal loans start low compared with other lenders at 5.89%. The loan amounts start much higher than many competitors, so American Express won’t be a good lender fit if you want a loan below $3,500. Repayment terms for American Express personal loans are flexible, but some other lenders may offer options for longer repayment terms. For example, Discover offers repayment terms as long as 84 months.
Discover personal loans
- No upfront fees.
- Fast funding.
- Free credit report.
- No in-person service.
- Can’t use loan for college costs.
- No co-signers.
Discover offers unsecured personal loans to any U.S. citizen over 18 who can verify annual income over $25,000. Discover personal loans can be used for anything from wedding costs and IVF to debt consolidation and medical expenses. The only thing loan funds cannot be used for is post-secondary education costs, paying off a secured loan or paying off a Discover credit card.
Discover offers a relatively approachable personal loan with average interest rates and perks for borrowers. The annual income requirements aren’t as high as they are for many competitor loans and minimum credit score requirements are average. Borrowers can manage their loans easily with Discover’s mobile app or online portal. Another added bonus for a Discover personal loan is that the loan comes with a free annual FICO credit report and assistance for protecting your online privacy.
How to choose between American Express and Discover
American Express and Discover personal loans have some similarities, but each lender excels in certain areas. American Express has the most competitive interest rates. However, Discover offers the best options for debt consolidation loans.
American Express is best for lowest interest rates
The numbers don’t lie. If you want the best APR between the two lenders, you’ll find the lowest rates through American Express. Interest rates for American Express personal loans start at 5.49 percent APR which is over two percent lower than the 7.99 percent APR starting rate you can get with Discover. With American Express, even if you don’t have the best credit score, you may still be able to get a lower rate than with Discover.
Discover is best for consolidating debt
A debt consolidation loan allows you to compile multiple debts into one loan with a lower interest rate. Discover can give a debt consolidation loan for up to $40,000. The lender also gives the option to pay your loan funds directly to your creditors, if you’d like. Discover also offers options for a longer period for repayment than American Express (up to 84 months), allowing you to repay your debt in smaller increments over time.
Compare lenders before applying
If you’re looking for a personal loan, it’s a good idea to look at more than just two lenders. Consider a variety of options and compare APRs, loan terms and fees to find the best fit for you. When lenders have an option for prequalification or preapproval, use that to find out exactly what a lender can offer you. When you compare a variety of lenders, you will be able to find the best personal loan for you and your needs.