Discover® Personal Loans Review

Get the information you need about personal loans by Discover. If you need financing for your wedding, vacation, home, or to pay off debt, but don’t want to pay a loan origination fee, you’ll want to check out Discover Personal Loans.

The verdict on personal loans by Discover

Discover can get you the personal loan you need if you're not approved by stronger lenders

Most banks don't provide personal loans anymore.

Personal loans today are almost entirely provided by companies whose specialize in personal loans.

It's somewhat unusual, then, for a financial institution like Discover – which specializes in credit cards – to be providing personal loans to consumers.

If Discover offered personal loans that were highly competitive with the rest of the personal lending sector, it might make more sense.

When you look up the list of the best personal loans available, Discover Personal Loans are never at the top of the list.

The top interest rate Discover Personal Loans charge is more than 10% higher than top competitor SoFi.

Often the best lenders like SoFi are pretty picky about who gets approved. High credit score borrowers are often the only clients.

If you've tried to get a loan through one of the better lenders out there but got denied, Discover Personal Loans are a perfectly fine alternative.

Although you won't get the most competitive rates and terms, you can get the money you need.

Average Personal Loan Rates

Discover competes with other dedicated loan providers

SoFi has a better interest rate and doesn't charge a loan origination fee

Discover Personal Loans includes a chart on its homepage for comparison to other lenders.

What jumps out right away is the $0 loan origination fee for Discover Personal Loans.

The average loan origination fee charged by Lending Club is $732. The average origination fee charged by Prosper Funding is $577.

That's a high price to pay for securing a loan. With Discover Personal Loans you're not paying that significant additional cost.

The problem is SoFi, the best competitor out there, is not included in Discover Personal Loan's comparison chart.

SoFi also doesn't charge a loan origination fee.

SoFi's interest rates are much lower than the ones charged by Discover Personal Loans.

SoFi's lowest possible rate is 5.49% and the highest is 14.24%.

Discover's lowest is 6.99% and highest is 24.99%.

On the high end, that's more than a 10% difference.

Discover Personal Loans Strengths

Discover Personal Loans are obtainable even if your credit score isn't excellent

Discover Personal Loans will approve applicants who have a credit score of 660 or "Good".

You only get the best rates if you have the best score. In contrast, top competitor SoFi only approves applications with "Great" or "Excellent" credit scores.

While Discover Personal Loans might not offer the best interest rate, it could be possible to get approved if your credit score is not perfect.

The Weaknesses of Discover Personal Loans

Discover Personal Loans charges a really high late payment penalty fee

Be on time or you'll pay dearly. If you're someone who is challenged to make your payments on time, you're going to pay for it.

These loans are designed to give you a fixed monthly installment that will be due on the same date of the month. You choose the date.

You can even change the payment date twice over the life of the loan (as long as the changes are more than one year apart).

Super-high penalty. But if you do find yourself paying your installment after the due date, a late fee penalty of $39 will be charged. That's really high.

Who should use Discover for personal loans?

You should use Discover Personal Loans if you need some structure to pay off your debt most efficiently

Discover started off as the first cash rewards credit card back in the '80s. Now the company offers lots of other financial products, including several different types of personal loans.

Fixed rates, fixed terms, and fixed payments.

Having various types of debt floating around with no plan or schedule to pay it off can be expensive.

If you're just making minimum payments on your high-interest credit cards it could take decades to get rid of that debt. As Quentin Fottrell from calculates, you'll end up paying more than double what you borrowed.

That's why it's such a good idea to lock in fixed monthly installments for your debt repayment. A Discover personal loan is set up over a fixed length of time at a lower APR than credit cards offer.

Flexibility for paying off. The schedule gives you the discipline to pay off your loan in a timely way. You choose between paying your loan off over 36 months (3 years) up to 84 months (7 years).

Make sure you pick a monthly payment amount you can afford and you'll be on your way to paying off your debt or financing a life-changing purchase.

Let's break it down.

The Discover Personal Loans online Personal Loan Calculator calculates the cost of your loan for you.

If you enter a loan amount of $10,000 for a personal loan for a customer with "Good" credit you get 5 options. All of them are charged a 13.99% fixed APR.

For 36 months, the monthly payments are $342. For 48 months you'll pay $273 monthly.

For 60 months it will be $233 per month. Six-year loans (72 months) are paid off in $206 monthly installments. And a $187 monthly payment will pay off a $10,000 loan in 7 years at that interest rate.

You don't qualify for a Discover personal loan if your gross household income is under $25,000.

Median Household Income

If you pay off your Discover personal loan within 30 days of getting it you don't get charged any interest.

The different types of Discover Personal Loans

You may need a Discover debt consolidation loan if you've got multiple debts that are charging high interest

A debt consolidation loan from Discover Personal Loans can make it easier to erase all your debt.

Bring all your debt under one roof. If you've got a lot of debt in different places, consolidating them together under a single interest rate and paid over time usually makes sense.

Get yourself a lower APR. Are you paying high-interest rates for credit card debt and carrying a big unpaid balance? You need to bring that debt over to a loan that charges less interest and lets you structure your payments over time.

Just one easy monthly payment for everything. Do you have other loans, like student loans or car loans, that you're also struggling to keep on top of? With a Discover debt consolidation loan, you can bring all of your debts under one loan and pay a fixed APR. All of your debts will be paid off together in single monthly installments over 3 to 7 years.

People love Discover debt consolidation loans because they can make one payment at a lower interest rate

Easier and costs less interest. People who had several forms of debt love the convenience and efficiency of one monthly payment.

They also appreciate being able to take debts that were being charged high rates of APR interest and bring them all into a single loan that is lower interest.

People hate Discover debt consolidation loans because they don't get approved

Rejection hurts. Online reviews include a lot of people who are disappointed when they get turned down for a Discover Debt Consolidation Personal Loan.

Some received Discover personal loan offers in the mail. Others had good credit scores.

Discover Personal Loans are approved based on credit history, recent activities with your credit, and credit inquiries. It also considers your employment status and your annual gross income.

Getting their applications turned down stings the customers because their credit scores will be lowered even more by the hard inquiry.

"Is the Discover debt consolidation loan a way to avoid bankruptcy?"

It can be an option. People who are up to their ears in debt are wondering if it is better to declare bankruptcy or get a debt consolidation loan. A lot of them express concern over debt consolidation firms.

Those agencies are basically charging you for the service you can do yourself with the Discover debt consolidation loan.

Better than paying a lawyer. Getting a Discover debt consolidation loan with no origination fee is certainly more appealing than paying thousands to a bankruptcy lawyer.

And Discover also offers free tools to manage your debt and estimate monthly payments.

If you like Discover debt consolidation loans you may want to check out peer-to-peer lending

You can go online for loans. It's not just financial institutions like Discover who provide personal loans. There are also web-based programs that let small investors pool their money and lend it out at a profit.

There are several of these peer-to-peer lenders, including the Lending Club, but we've already mentioned that the origination fee is high with that lender.

Value of Peer-to-Peer Lending in Selected Countries

Try Sofi if you're looking for an online peer-to-peer lender with $0 origination fee.

The smartest way to apply

It's up to you. To determine what interest rate and payment terms you qualify for, use the online personal loan calculator.

It makes sense to enter as high an amount as you need to cover outstanding debt with a higher APR.

It's also convenient to have all of your debt in one account so you can attack it with standard monthly payments.

Cheaper monthly payments or less interest? Choose the option that will pay your loan off the fastest, but at monthly payments you feel you can reasonably afford.

When you get approved you can get Discover Personal Loans to directly pay your other debtors (up to 70% of the full loan value).

Discover Personal Loans are great for financing green upgrades to your home

You may need a Discover Green Loan if you want to pay lower utility bills and want your home to have a smaller environmental footprint

"Going green" is within reach. Ever dream of having solar panels on your roof?

Or of having a geothermal system installed to heat and cool your house?

Did you ever wish you could upgrade your major appliances to ones that are energy efficient?

Being more environmentally friendly is something we should all be working on.

But if you can combine "going green" with lower utility bills it's win-win for your budget and the planet.

The barrier to going green that most people face is the capital cost.

You need to buy equipment and have it installed properly before you can start reducing your footprint and lowering your bills.

Discover Green Loans are the perfect solution for people who want to make environmentally friendly changes to their home but don't have the money to invest in equipment.

The investment will usually pay for itself over time in the form of lower utility bills.

People love Discover Green Loans because they can save money in the long run

"Sustainability" for the environment and your budget.

It's estimated that the average cost of installation for energy efficient technologies in a U.S. home is $30,000.

But over 25 years the energy savings produced could be up to $70,000.

People who get a Discover Green Loan are able to make investments in solar panels, geothermal systems, or high-efficiency replacement windows.

They pay their loan back over time and save on their energy costs in significant ways.

People hate Discover Green Loans because the customer service is poor

Customer service could be improved. On the Discover Personal Loans customer review site, there are many complaints about customer service.

There are several stories about people who are quoted a monthly payment amount by the customer rep and then when they get their first bill they find it is different.

Others talk about a tedious application process where they are passed from department to department on the phone. Customer reps are described as poorly trained.

"Is getting a loan to "go green" a good investment?"

It can pay itself off and then you start saving on your bottom line.

A lot of people are doing the math around home solar projects and other eco-friendly investments to see if they make financial sense.

Countries With The Most Installed Solar Energy (2017)

Many solar projects generate enough savings to pay off the initial investment in 6 or 7 years. After that, all those savings go right back into your pocket. So the long-term returns make it a worthwhile investment.

But for the short term, you need to get the funds to pay for the installations up front. That's where a Discover Green Loan comes in very handy.

If you like Discover Green Loans you may want to check out Green Energy Money

Top-to-bottom support. Energy-smart home retrofits for energy efficiency and renewable energy are financed by a company called Green Energy Money (GEM).

The company doesn't just finance projects – it also connects its borrowers to builders and tradespeople who specialize in sustainable homes.

The smartest way to apply for a Discover Green Loan

Figure out your savings and make that your payment amount. You're going to want to start by getting quotes from the installers for the cost of the projects you want to do.

Make sure when you get your quote the contractor provides you with an estimated calculation of the cost savings per year on your energy bills.

When it's time to choose the loan period and the monthly payments, try and match them to the savings you are going to make.

So if you're going to save an average of $200 a month on energy bills over the year, choose the option to make your monthly payments $200.

You won't even notice the difference in your cash flow.

You may need a Discover wedding loan if you want an unforgettable day but can't pay for the expenses up front

Discover Personal Loans are perfect if you need to pay for a wedding

Here comes the bride. If you or someone in your family is planning a wedding, you've probably got a big expense on the horizon.

Wedding costs are averaging more than $32,000 today. The high price tag might not even include the cost of the engagement ring or the cost of the honeymoon.

You wouldn't want the high cost of a wedding to stand in the way of celebrating a marriage.

Make it happen! The Discover wedding loan is a personal loan that lets you finance a wedding and pay it off with the repayment option that suits you best.

You can choose the shortest (3 year) loan period so you don't pay a lot of interest.

Or you can pay it off over time with a more affordable monthly payment.

People love Discover wedding loans because it lets them buy a nice ring

Put a ring on that finger! It's expected that a person will spend two month's salary on an engagement ring.

Discover Personal Loans had a video contest in 2015 and one of the winners described how the loan changed his life, "With this loan, I got my new fiancée the perfect ring. She said yes!"

People hate Discover wedding loans because they feel the interest is high

They think they deserve a better rate. Numerous people posting one- or two-star scores the Discover Personal Loans Customer Review page say the APR is higher than they expected.

Comments include, "The process was OK, but I was disappointed with the interest rate" and, "Not happy with the rate but the business part was good".

"What are the possible payback options for a Discover wedding loan?"

Flexible payment plans to suit your needs. You can choose to pay your loan back quickly to save on interest. Or, you might prefer to keep your monthly payments low and pay the Wedding Loan back over more time.

The Loan Calculator breaks down your options. If you want to borrow $20,000 for a wedding and you have a "Very Good" credit score you'll get quoted a 9.99% APR.

Average Wedding Expenses (2017)

If you choose to pay it back in 36 months (the shortest possible amount of time) you will pay $645 a month.

If you choose to pay it back in 84 months (the longest possible amount of time) you will be paying $332 a month.

But you will pay interest over four additional years.

If you like Discover wedding loans you may want to check out an online lender like SoFi

You can look online. The wedding blog The Knot has a post about wedding loans and other options to finance a wedding. It recommends an online personal loan company, especially if you're looking to get money quickly.

However, while the blog post links you to Prosper as an option, SoFi is a better recommendation. That's because Sofi doesn't charge a loan origination fee.

The smartest way to apply

First, calculate the budget for the wedding that you really want.

Pick your payments. When you've determined how much it will cost, you can go ahead and fill in the amount you will need to borrow into the Loan Calculator. Then you pick which payment options work for you.

See what you qualify for. The next step is to go to the online application and you will indicate how much you want to borrow and how long you'd like the loan period to be. You'll then find out what you qualify for.

Submit your full application. Once you've reviewed the offer you can go ahead and submit an application and get approved for your loan. Or you can call 1-866-248-1255 and apply over the phone.

You won't get hit with a credit check for seeing if you qualify. But if you go ahead with the full application you will.

You may need a Discover vacation loan if you're long overdue for a vacation but you don't have the funds to pay for it

Discover vacation loans come in handy if you want to take the family on a vacation

Everyone deserves to go on a vacation. It could be the family trip to Disney World. Or perhaps you'd like a romantic week at an all-inclusive Caribbean resort. Maybe you'd prefer to take a trip to explore Europe or another global destination.

Regardless of what your "trip of a lifetime" is, when you combine the costs of flights, hotels, and restaurants it's going to cost a lot.

If you're itching to get away but haven't been saving for a vacation, you can get your vacation financed with a Discover vacation loan.

People love Discover vacation loans because they are fast and simple

No problems. There are lots of Discover Personal Loans customer comments that talk about how fast and easy it is to get a loan. They say it is "easy and painless" or "fast and simple" to get their loan.

If someone decides to go on a vacation at the last minute they could still get it financed by a Discover vacation Loan. The expected time for acquiring a loan is 1 to 7 days.

People hate Discover vacation loans because you can't pay them off early and save interest

Paying off quickly should be rewarded. With Discover Personal Loans you can't pay off your loan balance early and save on interest. There's no extra fee for paying it off early. But if you've signed up for a three-year loan and can pay it off in one year you'll still pay the interest on the three years.

The only exception is if you can pay it off in full within 30 days. You won't get charged any interest.

"Are Vacation Loans different from the other Discover Personal Loans?"

They're pretty much all the same. The fact is, whether it's a vacation, a wedding, debt consolidation, home renovation, or any other expense, all Discover Personal Loans are identical products.

The only difference is that Discover Personal Loans will directly pay your other creditors if you get a Debt Consolidation Loan.

Your approval and the terms you're offered will not depend on your travel or wedding budget. It's going to be based on your creditworthiness.

If you get approved you can spend the money on whatever you want. There is no reporting involved.

If you like Discover vacation loans you may want to check out the Disney Vacation Club

Going to Disney World is a must for families. Your kids will never forgive you if you don't take them.

Most VIsited Amusement and Theme Parks Worldwide

Disney runs its own travel financing service. It's part of the Disney Vacation Club. Members can get travel loans with a down payment and can also redeem points if they're going on multiple Disney trips.

The smartest way to apply

What's most important to you? For all Discover Personal Loans, you need to calculate your budget and how much you need to borrow to achieve it.

Then you need to decide what's more important to you: getting it paid off as early as possible to avoid interest, or having low monthly payments.

You'll be given both options when Discover gives you an offer and you can pick accordingly.

Key Digital Services at Discover

Discover Personal Loans' online Personal Loan Calculator is helpful for making decisions

It makes it easy to decide on your payment plan. The Personal Loan Calculator comes in very handy when you need to decide how many years you want to take to pay your loan back.

You indicate your credit score ranking, the amount you want to borrow, and what you're borrowing it for.

Then you get a breakdown of how much your monthly payment will be if you choose any term between three and seven years.

We only wish it also calculated how much extra interest you would pay for choosing different years.

Frequently asked questions (FAQ) about Discover Personal Loans

  • What is the minimum age for a Discover Personal Loan?

    You need to be 18 years of age to get a Discover Personal Loan.

  • Can a non-U.S. citizen get a Discover Personal Loan?

    No, you have to be a U.S. Citizen or Permanent Resident.

  • Can I get a Discover Personal Loan on the same day as I apply?

    No, it will be at least one day and as long as 7 -10 days.

  • What can I use the money for?

    Discover is going to ask what you need the money for.

    But once approved you can use the money for anything you want.

    You are not restricted to just spending it on your home or a vacation or a wedding.

    If you are borrowing for debt consolidation Discover Personal Loans will make direct payments to your other creditors up to 70% of the total loan amount.

  • What is the rating for Discover Personal Loans with the Better Business Bureau?

    The BBB gives Discover Personal Loans a B-minus.

  • Is there a fixed interest rate?

    Yes, the interest rate you agree upon is locked in over the life of the loan.

  • Can I defer a payment?

    No, you can't defer a payment with Discover Personal Loans.

  • Are the loans secured or unsecured?

    Unsecured. There is no down payment or security deposit for borrowing with Discover Personal Loans.

  • Will my credit score get affected if I miss a payment?

    A penalty fee of $39 is charged for late payments. If you're 60 or 90 days late it will be reported to the credit bureaus.

  • Can I have two loans at the same time?

    Yes, once you have had the first loan for 90 days you can apply for a second Discover Personal Loan.

  • What documentation does Discover Personal Loans need in order to approve my request for a loan?

    You don't need any documentation for the initial soft pull to determine if you qualify. For the full approval hard pull, you will need income verification (for example your most recent paystub).

  • Does Discover Personal Loans offer services in all states?


  • How long is the whole process of applying?

    After you've sent in your initial application to see if you qualify, you'll get an offer in 8 to 10 minutes.

    If you go ahead with a full application the hard pull credit check is typically finished up on the same day. But if verifications are requested they could add 24 hours to get cleared.

  • How long does it take for the funds to get dispersed?

    The funds are often dispersed the next business day after approval. But it can take 7-10 business days.

  • Will the money be deposited straight into my bank account?

    You can get the money deposited into your account or you can get a check sent to you. If you are borrowing for debt consolidation Discover Personal Loans can send other creditors payments directly.

Discover will get you the personal loan you need, if you can't get approved by a better lender

Whether it's for a wedding, a vacation, energy efficient home upgrades, or debt consolidation, Discover can get you the funds you need to live your dreams.

Unlike some other personal lenders that charge a hefty loan origination fee, Discover Personal Loans doesn't make you pay extra to borrow.

You also get to pick whether you'd like to pay it off quickly and pay less interest or have lower monthly payments.

You won't get the best rates available in the industry. You will get the funds you need.

Do you use Discover for personal loans?

How has it worked out for you?

Any great tips (or nightmares) to share with the rest of us?

Let us know in the comments below!

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