Discover Personal Loans Review

Discover is a national lender offering a variety of personal loan options

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Discover

Discover

overall rating
4.6

Our Take 

Discover is an excellent option for people with good credit who need a personal loan of no more than $35,000. Not only are its rates and terms competitive, but it was also recently rated as one of the best personal loan providers in terms of customer satisfaction, making it a great choice for borrowers.

  • Pros & Cons
  • Key Takeaways
  • Specifications
Pros & Cons
Pros
  • No origination fees

  • Maximum repayment term is long

  • Excellent customer satisfaction ratings

Cons
  • Most qualifications aren’t disclosed

  • Maximum loan amount is low

  • Refinance options are limited

Key Takeaways
  • Discover offers loan funding as soon as the next business day after your loan is approved.
  • Funds can be sent directly to your creditors if the loan is used for debt consolidation.
  • You can manage your Discover loan account online or by downloading its mobile app.
  • Discover customer service is available seven days a week. 
Specifications
  • APR Range 5.99% to 24.99% (no autopay discount)
  • Loan Amounts $2,500 to $35,000
  • Loan Terms 36 to 84 months
  • Recommended Minimum Credit Score Not disclosed
  • Average Origination Fee 0%
  • Late Fee $39

Pros Explained

  • No origination fees: You won’t pay an origination fee if you get a personal loan from Discover. It’s common for some personal loan providers to charge origination fees of 3.5% or more.
  • Maximum repayment term is long: With Discover, you can take as long as 84 months (7 years) to repay your loan. This maximum repayment term is long, as many competitors only offer repayment terms up to 60 months (5 years).
  • Excellent customer satisfaction ratings: Consumer reviews suggest Discover is well-regarded by its customers. Plus, it tied for first place in the J.D. Power 2021 U.S. Consumer Lending Satisfaction Survey.

Cons Explained

  • Most qualifications aren’t disclosed: Besides stating that you need to be at least 18 years old, a U.S. citizen or permanent resident, and have at least $25,000 in household income to qualify for a personal loan, Discover doesn’t disclose other qualifications, like minimum credit scores or debt-to-income ratios. 
  • Maximum loan amount is low: You can only get a personal loan of up to $35,000 with Discover. Many other lenders offer maximum loan amounts of up to $50,000 or more. 
  • Refinance options are limited: Once you’ve received a loan from Discover, you can change your payment due date up to two times. Unless you’re experiencing financial hardship, other refinance options aren’t available.

Introduction

Discover is one of the largest credit card issuers in the United States, and it also offers unsecured personal loans available in all 50 states. Although Discover has a lower maximum loan amount than other lenders, its APRs of 5.99% to 24.99% are excellent and its repayment terms of up to 84 months are longer than average. Plus, it recently received top customer satisfaction ratings from J.D. Power.

Personal loans from Discover are an excellent option for people who need to cover various personal or family expenditures, like paying for unexpected expenses, funding a wedding, covering the costs of a vacation, or making home improvements. Plus, the loan can be used to consolidate existing debt into a single fixed-rate loan. However, you’ll likely need good credit to qualify. If you don’t have good credit, you may need to look elsewhere.

Company Overview

Discover is a financial institution headquartered in Riverwoods, Illinois, founded in 1986 and is one of the biggest credit card issuers in the United States. Besides offering credit cards, the company also offers one of the most highly-rated unsecured personal loans (in terms of customer satisfaction), along with bank accounts and other financial products. 

As of September 2021, Discover has about $7 billion in outstanding personal loans, which are offered in all 50 U.S. states.

Types of Personal Loans Offered by Discover

Discover Bank offers unsecured personal loans that can be used for several purposes. For example, you could use the loans to cover unexpected expenses, fund a wedding, pay for a family vacation, or pay for adoption or fertility costs. Plus, you can use the funds to repair your home, make energy-efficient improvements, or fund renovation projects without using your home as collateral. 

You can’t use your Discover personal loan funds to pay for post-secondary educational expenses, repay a secured loan, or pay off an existing Discover credit card. You can, however, use the funds from your personal loan to consolidate other types of unsecured debt, like credit card balances with other issuers. 

To qualify for a personal loan from Discover, you need to be at least 18 years old, a U.S. citizen or permanent resident, and have at least $25,000 in household income. Discover will review your financial information and credit history to make sure you have sufficient income to repay the loan and that you meet its other creditworthiness requirements (e.g., your debt-to-income ratio and credit history are acceptable). 

One of the key drawbacks to Discover is that the specific criteria it uses to determine if you are creditworthy aren’t disclosed. However, you’ll likely need good credit to qualify. 

Time to Receive Funds

Typically, you’ll know if you’re approved for a Discover personal loan on the day you apply. After accepting the loan terms, you may get funded as soon as the next business day. This funding speed is excellent compared to the competition.

When you apply for a personal loan, you’ll let Discover know how you want to receive the funds. One option is to have the funds directly deposited into your bank accounts. Plus, if you’re using the loan to consolidate debt, you can have Discover send the funds directly to your existing creditors.

Discover Bank Personal Loan Features

No Origination Fees

Discover doesn’t charge any origination fees for its personal loans. This makes it stand out from the competition, as many lenders charge origination fees of 3.5% or more. The lack of origination fees is reflected in Discover’s lower-than-average APR range of 5.99% 24.99% since the APR calculation considers loan fees.  

Funds Can Be Used for Debt Consolidation

If approved, you can use your personal loan funds from Discover to consolidate existing debt. Discover can simplify the process of consolidating debt by sending loan funds directly to your creditors.

Keep in mind, you can’t use the funds from a Discover personal loan to consolidate the balance on an existing Discover credit card.

Apply for a Discover Bank Loan

To apply for a personal loan with Discover, you’ll need to:

  1. Determine the loan amount and payment terms you need: Before you apply for a loan with Discover, know how much you need to borrow, how long you need to repay the loan, and if you can reasonably afford the payments by reviewing your personal finances and budget.
  2. Collect basic information required for the application: When you apply, you’ll need to provide basic personal information, and details about your income and employment history. To expedite the process, gather these details before applying.
  3. Decide how you want to receive your funds and gather required information: As you apply, you’ll tell Discover how you want to get funded. The funds can be transferred to your bank account (you’ll need bank account numbers and routing numbers) or sent directly to your creditors (you’ll need account numbers and balances when you apply). 
  4. Submit your application online or by calling 1-866-248-1255: You can apply for a personal loan with Discover online or by speaking with a loan specialist over the phone. You’ll need to provide basic personal information, so make sure you have it on hand before you apply.
  5. Receive a credit decision, accept the loan terms, and get funded: As long as you’ve submitted a complete application and no information is missing, you’ll learn if you’re approved the day you apply. After you’ve accepted the loan terms online, you can get funded as soon as the next business day.

Remember, qualifying for a loan and affording a loan are two different things. Always make sure to review your budget before signing up for a loan to make sure you can reasonably afford the payments.

Can You Refinance a Personal Loan with Discover?

If you have a short-term financial hardship, Discover may provide short-term assistance in the form of payment deferrals or interest-only payments for a short period (e.g., six to 12 months). Plus, if you have a long-term financial hardship, Discover might be able to extend your loan’s term and reduce your monthly payments for the remainder of your loan period. 

Besides refinancing assistance related to financial hardships, you can also request a change to your payment due date two times during the life of your loan. Discover doesn’t disclose any other refinance options.

You can’t request more than one payment due date change in a single 12 month period from Discover. So, make sure to select a payment due date that will work for at least this amount of time. 

Customer Service

Unlike some of its competitors, all of Discover’s loan specialists are based in the United States. Plus, they are available by phone seven days a week. You can speak with a loan specialist by calling 1-866-248-1255 from 8 a.m. to 11 p.m. ET Monday through Friday and from 9 a.m. to 6 p.m. ET on Saturdays and Sundays. You can also check your application status or send secure messages to loan specialists by logging into your account online. 

Customer Satisfaction

Discover’s customers are generally satisfied with the level of support received and services provided by Discover. This is corroborated by the fact that Discover tied for first with American Express for overall customer satisfaction among personal loan lenders in the J.D. Power 2021 U.S. Consumer Lending Satisfaction Study. 

Plus, Discover ranked number two (just behind American Express) in the J.D. Power 2021 U.S. Credit Card Satisfaction Survey. This finding is notable and relevant since Discover not only offers personal loans but is also a major credit card provider.

Account Management

Discover allows borrowers to manage loan accounts online via its website. Plus, it also offers mobile apps for iPhone and Android that can be used for account management. Additionally, you can speak with a loan representative via phone if you need assistance during the application process or have questions about your loan. 

Through your online account, you can view your statements, establish account alerts, review your loan balance and account activity, and pay your bill. Plus, there’s a messaging center where you can receive, view, and send messages from and to your loan specialist. 

How Discover Compares to Other Personal Loan Companies

While many lenders only offer personal loans in specific regions, Discover personal loans are available in all U.S. 50 states. Plus, there aren’t any origination fees and repayment terms are as long as 84 months, key features making Discover stand out from the competition.

However, you can only get up to $35,000 in funding from Discover, and this amount is lower than much of the competition. Even so, Discover offers a competitive APR that starts as low as 5.99%. Plus, it has an excellent reputation with its customers.

Discover vs. American Express

One of the most comparable personal loan providers to Discover is American Express. Both lenders tied for first place in overall customer satisfaction in the J.D. Power 2021 U.S. Consumer Lending Satisfaction Study. Plus, neither lender charges an origination fee, which makes them stand out from the competition and translates into relatively low APRs.

Some of the key differences between personal loans with Discover vs. American Express are:

  • You must be an existing American Express cardholder and receive an invitation to apply for one of its personal loans. In contrast, you don’t need to be an existing cardholder or receive an invitation to apply for a personal loan with Discover.
  • If you get a personal loan with American Express, you’ll need to repay it within no more than 36 months (3 years). In contrast, you can take as long as 84 months (7 years) to repay a Discover personal loan. 
  • While both lenders offer relatively low maximum loan amounts, you can borrow up to $40,000 with American Express. You can only get up to $35,000 if you’re approved for a personal loan with Discover.

Discover and American Express are great options, with relatively low APRs, no origination fees, and reasonable repayment terms. Plus, they both rank highly in customer satisfaction. If you’ve been invited to apply, American Express may be the better option, particularly if you need up to $40,000 and can repay your loan in no more than three years. Discover is likely the better option if you haven’t received an invitation or need more time to repay your loan.

Read our full American Express personal loans review.

  Discover American Express 
APR Range 5.99% to 24.99%  7.98% to 19.98% 
Average Origination Fee  0%  0% 
Loan Amounts  $2,500 to $35,000  $3,500 to $40,000 
Loan Terms  36 to 84 months  12 to 36 months 
Invitation to Apply  Not required  Must be invited to apply 
Final Verdict

Discover offers an excellent personal loan option for individuals with good credit who only need to borrow up to $35,000. Besides offering competitive rates and terms, Discover was recently rated as one of the best personal loan providers for customer satisfaction by J.D. Power. Plus, personal loans are available to people in all 50 states. Overall, Discover offers one of the best personal loan options on the market and is an excellent choice.

Methodology

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of personal loan lenders. We collected over 25 data points across more than 50 lenders including interest rates, fees, loan amounts, and repayment terms to ensure that our content helps users make the right borrowing decision for their needs.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy .
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  2. J.D. Power. "Pandemic Put Lenders to 'Digital Test', J.D. Power Finds." Accessed Nov. 30, 2021.

  3. Discover. "Achieve More with a Discover Personal Loan." Accessed Nov. 30, 2021. 

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  10. Discover. "When Making Payments Becomes Difficult, Discover Personal Loans Wants to Work With You." Accessed Nov. 30, 2021.

  11. Discover. "Frequently Asked Questions: Loan Repayment." Accessed Nov. 30, 2021.

  12. J.D. Power. "While Many U.S. Credit Card Issuers Struggle to Meet Evolving Customer Expectations, Some Bright Spots Exist, J.D. Power Finds." Accessed Nov. 30, 2021.

  13. American Express. "American Express Personal Loans." Accessed Nov. 30, 2021.