Are you looking to consolidate credit card debt or fund major expenses like your wedding or putting braces on your kids? A personal loan can be a good tool to help you achieve those goals (although, it’s not always the best tool).
Discover offers personal loans with fixed interest rates and reasonable repayment schedules to help you achieve some of your personal goals.
Should you take out a loan from Discover? We’ll go into the details of the loan to help you decide.
Before you dive in with Discover, check out our list of the Best Personal Loans here. Also, no matter who you choose, make sure you shop around. We recommend using Credible to shop around because they are the kayak of loans. In 2 minutes or less, you can find out the best rates for you. Check out Credible here.
- Discover offers personal loans up to $35,000
- Competitive interest rates for qualified borrowers
- Loan repayment terms from 3 to 7 years
What Types of Personal Loans Does Discover Offer?
Discover offers unsecured personal loans, with fixed interest rates. You’ll pay back the loan in equal monthly installments over the course of three to seven years. Since these are unsecured debts, Discover won’t place a lien on a vehicle or any other asset that you purchase with the funds from the loan.
Who Qualifies for a Personal Loan from Discover?
To qualify for a personal loan from Discover you need to be 18 years old or older, be a U.S. citizen, and have an income of at least $25,000 per year. You also need fair credit or higher (about a credit score cutoff of 650 to 680) to qualify.
What Are the Rates and Terms on Loans from Discover?
Personal loans from Discover have no origination fees and are fixed-rate loans. You can pay off the loan early without facing any prepayment penalties.
One advantage of Discover’s loan program is that all personal loans are unsecured. That means if you default on the loan, Discover cannot repossess your vehicle or foreclose on your home. However, they can sue you for the balance of payment, so you want to make on-time payments.
You can borrow between $2,500 and $35,000 on a personal loan.
The interest rates as of October 12, 2018 range from 6.99% to 24.99% APR.
Repayment periods on the loans range from 36 to 84 months.
If you make a late payment on the loan, the fee is up to $39.
Is There Any Concerning Fine Print on Discover's Personal Loans?
Discover’s personal loans have reasonable rates, no origination fees, and a $39 late fee for late payments. You won’t pay a penalty interest rate for late payments.
The only “weird” language on Discover’s personal loan program is that debt consolidation loans require at least 70% of loan proceeds to go directly to a lender (you won’t pay them yourself). If less than 70% of the funds go to a lender, then your interest rate will be affected.
Final Take on Discover's Personal Loans
If you have good to great credit, a personal loan from Discover could make a lot of sense. However, people with excellent credit should also look into loans from LightStream, SoFi, and others. Before taking out a loan, shop around on LendingTree or another comparison site for better rates.
But before you even start shopping for personal loans, it’s important to become very clear on why a personal loan makes sense for you. Saving money for big goals or cutting back on the expenses make a lot more sense than going into debt to cover consumption.
Every once in a while a personal loan makes sense as a business or investment loan, or to help you consolidate debt. However, you should look into every other option (negotiating with medical providers, 0% balance transfer credit cards, and saving in advance) before opting for a high-interest loan.
Discover Personal Loans Review
- Rates and Fees - 60
- Application Process - 80
- Customer Service - 80
- Products and Services - 60
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.