December 6, 2023


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Discover Personal Loans Review 2021

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Discover loan amounts and interest rates

Discover’s personal loan amounts range from $2,500 to $35,000 and can be repaid over three to seven years, depending on the agreement you strike with the lender.

Discover’s lowest APR of 6.99% is roughly the same or lower than comparable lenders. Marcus’ minimum rate is also 6.99%, and LendingClub’s lowest rate is 8.05%. Keep in mind that you’ll need to have good credit to qualify for the best rates. 

However, Discover’s top APR of 24.99% is middle of the pack compared to similar companies. Marcus’ top rate is 19.99%, while LendingClub’s is 35.89%. See what your rates are at different companies before settling on one to take out a loan from. 

How Discover works

Discover offers unsecured personal loans that can be used for many reasons, including debt consolidation, home improvement, and vacations. You don’t need collateral, like a house or a car, to get an unsecured personal loan. 

Depending on when your application is approved, your money could be received as soon as the next day with Discover. You won’t pay any origination fees or prepayment penalties with the company, but you may be charged a $39 fee for late payment.  

A unique feature of Discover is its 30-day money-back guarantee. If you decide within 30 days of getting your loan that you no longer want it, you can send back the funds via check and won’t be charged any interest. This perk may be helpful if you find a lender with a lower rate or if you end up not needing the loan amount you initially requested. 

To contact customer support, call the lender Monday through Friday, 8:00 a.m. to 11 p.m. ET, or on weekends from 9:00 a.m. to 6:00 p.m. ET. If calling isn’t the best work for you, you can also send mail to Discover’s Utah address. 

Discover has a well-reviewed app that has received 4.8 out of 5 stars on the Apple store and 4.6 out of  5 stars on the Google Play store. This is useful if you want to manage your loan on the go. 

You’ll need to meet the following requirements to apply for a personal loan with Discover:

  • Be at least 18 years old
  • Be a U.S. citizen or permanent resident
  • Have a minimum household income of at least $25,000

The pros and cons of Discover personal loans 

How to get a Discover personal loan

You can find the application online or over the phone, and you can complete the application in several minutes. Discover doesn’t allow co-signers. You’ll need basic information for the initial application, including:

  • Name
  • Date of birth
  • Contact information including your address, phone number, and email
  • Your personal ID number, if you received an offer in the mail
  • Household income
  • Employment history
  • Bank account number and routing number
  • Creditor information if you’re using the loan to consolidate debt

Discover might need several documents from you to verify your information, including:

  • A bank statement
  • Recent pay stubs
  • A work email address
  • Contacting your employer directly

After you apply and your loan is approved, you can get your money as soon as the next business day. 

What credit score do you need to qualify for a Discover loan?

Discover doesn’t have a minimum credit score to qualify for a loan and instead will make its approval decision based on other financial factors. Other comparable lenders have no specified minimum, such as Marcus by Goldman Sachs and LendingClub. That said, you’ll likely receive a better rate with a higher score.

If you need to access your credit report, you can get it at no cost from any of the three major credit bureaus on weekly through April 20, 2022. This report will give you information about your payment and credit history — though it won’t provide you with your credit score. Looking over your credit report can help you spot errors and find areas for improvement.

You can get your score for free on your credit card statement or online account. You can also buy it from a credit reporting agency.

If you check your rates with Discover, your credit score won’t be negatively impacted, as the lender will only generate a soft credit inquiry. However, before your loan is finalized, Discover will perform a hard credit inquiry, which will probably affect your credit score. A hard inquiry gives a lender a comprehensive view of your credit history, but it may ding your credit score.

If you want to get a personal loan from Discover but need to boost your credit score to do so, here are some steps you may want to take to improve your score: 

  • Ask for and review a copy of your credit report. Search for any mistakes on your report that could be tanking your score. If so, ask the credit bureau about correcting the errors.
  • Maintain low credit card balances. Keeping a credit utilization rate — the percentage of your total credit you’re using — of 30% or less will show lenders that you can handle your credit responsibly.
  • Design a system for paying bills on time. Your payment history makes up a significant portion of your credit score, and lenders want to see consistent and reliable past payments. Set up calendar reminders or automatic payments to make sure you don’t skip out on any of your obligations.

Is Discover trustworthy?

Discover is a Better Business Bureau-accredited company, and the BBB gives Discover an A+ in trustworthiness. The BBB evaluates trustworthiness by reviewing businesses’ responses to customer complaints, truthfulness in advertising, and openness about business practices. 

However, a top-notch BBB rating doesn’t guarantee a positive relationship with Discover, so look over reviews on the internet and ask friends and family about their experiences with the company. 

Discover does not have any controversies over the past several years. You may feel comfortable choosing Discover as your personal loan lender due to its clean history and great BBB rating.

How does Discover compare to other personal loan lenders? 

Discover rates are similar to those offered by comparable lenders — though rates will depend on your particular profile. Here’s how Discover compares to the competition:

Discover review vs. Marcus by Goldman Sachs review

Neither Discover nor Marcus by Goldman Sachs has a minimum credit score requirement, but if you have a lower credit score, your APR may be higher with Discover than Marcus. The top end of Discover’s APR range is 5% higher than Marcus’ range. If your credit is in good shape, you’ll likely pay a similar rate with both lenders. 

You won’t pay any origination fees or prepayment penalties with either company, but Discover may charge a late fee of up to $39. If you’re worried about potentially missing a payment, Marcus may be the better option for you. 

Marcus offers a loan term range of three to six years, which is slightly smaller than Discover’s range of three to seven years. Discover’s seven-year repayment term will allow you to reduce your monthly costs, but you’ll pay more in interest over the life of the loan. 

Discover review vs. LendingClub review

Discover has a better APR range than LendingClub, as you can get a minimum rate over 1% lower with Discover than LendingClub, and a maximum rate over 11% lower. Neither lender has a minimum credit score requirement. 

LendingClub’s repayment terms are either three or five years, while Discover’s terms range from three to seven years. If flexible repayment options are important to you, Discover may be the better choice. 

A distinguishing feature of Discover is its 30-day money-back guarantee on its personal loans. If you decide within 30 days of receiving your loan that you no longer want it — perhaps you found a better rate elsewhere — you can return the funds via check and won’t be charged any interest. 

Ryan Wangman is a reviews fellow at Personal Finance Insider reporting on mortgages, refinancing, bank accounts, bank reviews, and loans. In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership.