Discover features

Here's a breakdown of some of the benefits and drawbacks of Discover personal loans.

Pros

  • Online tools
  • Flexible payment terms
  • Few fees

Cons

  • Tailored to borrowers with good credit
  • No co-signers

Discover may be best known as a credit card issuer, but what you may not know is that Discover offers competitive personal loans.

One of the highlights is that Discover loans are one of only a handful of personal loans that don’t include an origination fee. This is significant because this upfront fee, which typically ranges between 1 percent and 6 percent of the loan value, can tack on hundreds and sometimes thousands of dollars to the overall cost of a loan.

Discover loans are tailored to borrowers with excellent credit scores. Check out our Discover loan review for everything you need to know about this loan option.

Get pre-qualified

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

Discover snapshot

Loan amount $2,500 to $35,000
APR 6.99% to 24.99%
Minimum credit score Not specified
Time to receive funds As soon as one business day

Pros and cons of Discover personal loans

Before applying for a loan with Discover, it’s important to assess the benefits and drawbacks of the lender.

Pros:

  • Online tools: Prospective borrowers can take advantage of Discover’s free education tools, including a personal loan calculator, a debt consolidation calculator and an online library of articles that explain various topics around loans and debt.
  • Flexible payment terms: Many personal lenders only offer three- or five-year loans, but Discover offers loan repayment terms of up to seven years, or 84 months.
  • Few fees: Aside from a late fee, Discover charges no fees. This means no origination fee, which many lenders take out of the total amount of your loan.

Cons:

  • Tailored to borrowers with good credit: Discover doesn’t advertise specific minimum credit score requirements, but the typical borrower holds a credit score above 700.
  • No co-signers: With some personal loan lenders, you can add a co-signer to your loan if your credit score is too low to get you approved on your own. Discover doesn’t allow co-signers, so you may have to choose another lender if you don’t qualify.

Lending terms

Discover loans are fixed-rate and range from $2,500 to $35,000. The quote you receive is based on multiple factors, including credit history, the amount you’re asking for and how long you’d like to pay it off — anywhere from 36 to 84 months.

Discover charges an annual percentage rate (APR) of 6.99 percent to 24.99 percent. The amount of interest you will pay on your loan depends on the amount you borrow, your creditworthiness and the length of your loan.

For example, if you borrow $10,000 for 60 months at a rate of 9.99 percent, your monthly payments will be $212. Over the life of the loan you will have paid $12,720 — which includes $2,720 in interest on top of the original $10,000 you borrowed.

If you choose to use your Discover loan for debt consolidation, you’ll need to commit to sending a minimum of 70 percent of the funds to the creditors, or you risk losing final approval or adversely affecting the APR you’re approved for. You can set it up with Discover to send loan payments directly to the creditor.

Discover also has a unique 30-day money-back guarantee if you find more favorable terms from another lender. Within that window, you can return Discover’s loan without any penalties or interest charges.

Fees and penalties

Discover does not charge origination fees or prepayment fees, although it may charge a late payment fee of $39. This is higher than the late fees of many other lenders, and there is no grace period for late payments.

How to apply for a loan with Discover

Discover’s loan application process is straightforward and fast. Enter some basic information in the online application, including the loan amount you want, what you want to use the money for and the length of time you’d like to pay it off. Discover’s online calculators can give you an estimate of how much your monthly payments will be at different loan lengths and interest rates.

Before finalizing your Discover loan, the company will do a “hard” credit check, which can adversely impact your credit score. Once approved, the company will call you to verify your identity.

A Discover personal loan applicant could receive a decision on the same day they apply as long as their application is complete with no missing information. Once the application is approved and the applicant accepts the loan terms, funds can be sent as early as the next business day.

The minimum gross income requirement is $25,000 annually, but that’s not the only factor Discover considers in evaluating an application. “We evaluate each applicant based on a number of factors including the applicant’s overall financial health and assess each application based on the customer’s personal financial situation including their credit score, income and existing credit and debts,” a spokesman said. “However our typical customer’s average income is much higher than the minimum.”

Get pre-qualified

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

How Bankrate rates Discover

Overall Score 4.8
Availability 4.6
Affordability 4.8
Customer Experience 5.0

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.