Discover the 2021 Personal Loan Review
Personal Finance Insider writes about products, strategies, and tips to help you make informed decisions with your money. We may receive a small commission from our partners, such as American Express, but our reports and recommendations are always independent and objective.
Find out loan amounts and interest rates
Discover personal loan amounts range from $ 2,500 to $ 35,000 and can be repaid over three to seven years, depending on the agreement you make with the lender.
Discover’s lowest APR of 6.99% is about 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 will need good credit to get the best rates.
However, Discover’s best APR of 24.99% is in the middle of the pack compared to similar companies. Marcus’ maximum rate is 19.99%, while LendingClub’s is 35.89%. See what your rates are at different companies before choosing a company to take out a loan from.
How Discovery Works
Discover offers unsecured personal loans that can be used for a number of 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 request is approved, your money could be received as early as the next day with Discover. You will not pay 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 return the funds by check and you won’t be charged interest. This benefit can be useful if you find a lender with a lower rate or if you don’t need the loan amount you originally requested.
To contact customer service, call the lender Monday through Friday, 8:00 a.m. to 11:00 p.m. ET, or weekends from 9:00 a.m. to 6:00 p.m. ET. If the call isn’t the best job for you, you can also send a mail to Discover’s Utah address.
Discover has a well-rated app that 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 will need to meet the following conditions 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 family 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 within minutes. Discover does not allow co-signers. You will need basic information for the initial request, including:
- Last name
- Date of Birth
- Contact details, including your address, phone number and email
- Your personal identification number, if you have received an offer by mail
- Household income
- Employment history
- Bank account number and routing number
- Information about the creditor if you are using the loan to consolidate debt
Discover may need several documents from you to verify your information, including:
- A bank statement
- Recent payslips
- A professional email address
- Contact your employer directly
Once you apply and your loan is approved, you can get your money back as early as the next business day.
What credit score do you need to qualify for a Discover loan?
Discover does not have a minimum credit score to qualify for a loan and will instead make its approval decision based on other financial factors. Other comparable lenders do not have a specified minimum, such as Marcus of Goldman Sachs and LendingClub. Having said that, you will likely receive a better rate with a higher score.
If you need to access your credit report, you can get it for free from any of the three major credit bureaus at annualcreditreport.com weekly until April 20, 2022. This report will give you information about your payments and credit history, although it will not provide you with your credit score. Examining your credit report can help you spot mistakes 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 will not be negatively affected, as the lender will only generate a soft credit application. However, before your loan is finalized, Discover will do a serious credit investigation, which will likely affect your credit score. Thorough investigation gives the lender a full view of your credit history, but it can hurt your credit score.
If you want to get a personal loan from Discover but need to improve your credit score to do so, here are some steps you may want to take to improve your score:
- Request and review a copy of your credit report. Look for errors in your report that could affect your score. If so, ask the credit bureau to correct the errors.
- Keep credit card balances low. Maintaining a credit utilization rate (the percentage of your total credit that you use) of 30% or less will show lenders that you can manage your credit responsibly.
- Design a system to pay bills on time. Your payment history is an important part 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 miss any of your obligations.
Is Discover trustworthy?
Discover is a Better Business Bureau accredited company, and the BBB gives Discover a A + in reliability. The BBB assesses reliability by examining companies’ responses to customer complaints, the veracity of advertising, and openness about business practices.
However, a top-notch BBB rating does not guarantee a positive relationship with Discover, so check out reviews on the internet and ask friends and family about their experiences with the company.
Discover has not been the subject of controversy in recent years. You may feel comfortable choosing Discover as your personal lender because of its clean history and excellent BBB rating.
How does Discover compare to other personal lenders?
Discover rates are similar to those offered by comparable lenders, although the rates depend on your particular profile. Here’s how Marcus stacks up against the competition:
Check Out Goldman Sachs’ Criticism Against Marcus Criticism
Neither Discover nor Marcus of Goldman Sachs require a minimum credit score, but if you have a lower credit score, your APR may be higher with Discover than with Marcus. The top of the range of the APR range from Discover is 5% higher than the range from Marcus. If your credit is in good shape, you will 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 are worried about missing a payment, Marcus may be the best option for you.
Marcus offers a loan term range of three to six years, which is slightly lower than Discover’s three to seven year range. Discover’s seven-year repayment term will lower your monthly fees, but you’ll pay more interest over the life of the loan.
Check out the review versus the LendingClub exam
Discover has a better APR range than LendingClub because you can get a minimum rate that is over 1% lower with Discover than with LendingClub and a maximum rate that is over 11% lower. None of the lenders have a minimum credit score requirement.
LendingClub’s repayment terms are three or five years, while Discover’s are three to seven years. If flexible repayment options are important to you, Discover may be the best 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 – maybe you’ve found a better rate elsewhere – you can return the funds by check and you won’t be charged interest.
Ryan Wangman is a research fellow at Personal Finance Insider, which deals with mortgages, refinancing, bank accounts, bank notices and loans. In his past personal finance writing experience, he wrote about credit scores, financial literacy, and homeownership.