Discover Personal Loan Reviews

The median annual percentage rate (APR) for personal loans has been steadily climbing for almost three years, and now reaches up to 12.5%. This is the highest rate since 2017, which is a pretty alarming signal. Does any bank still offer low APR personal loans? Thankfully, yes. In this Discover personal loans review, we’ll discuss the requirements you need to meet to get one for yourself.

Discover Bank Personal Loan Explained

A personal loan is basically an unsecured loan with no requirement to pay collateral. It can be used to cover business expenses or individual needs, like weddings, home renovation, vacation, treatment costs, etc. Discover loans are also an excellent debt consolidation tool, as you can use these to fund your existing obligations.

Actually, you can use the loan for any purpose except educational expenses, repaying a secured loan, or funding a Discover credit card. Note that you’ll need a credit score of at least 660 to get this option. The loan is also available not only to the bank’s customers, but for anyone who qualifies.

Discover Bank Loan Amounts and Conditions

Amounts

Getting a low-APR loan is great for when you need to quickly borrow a relatively small (but still significant!) amount of money, as the minimal lending sum is $2,500. The maximum is $40,000, but bear in mind that the APR increases the more money you borrow.

Terms

Discover card personal loan terms are quite flexible. A borrower is allowed to set some of the loan’s important aspects, like its length (as long as it stays within 3 to 7 years). However, extended repayment terms can lead to higher fees and an increased APR. In any case, you can get the funds within a few days of the loan’s approval, which makes it a good option if you urgently need money.

Discover Personal Loan Costs

Annual Percentage Rate

Discover loan rates are determined by the borrower’s credit rating, the sum in question, and repayment term. Normally, the APR ranges from 7.99% to 24.99%. With fixed APR, you’re required to pay the same amount of money every month, which makes it easier to plan your repayment. If you have a high credit score, you can also expect an additional discount.

Rate Discounts

Receiving a rate discount basically means that you’ll have to pay less interest, allowing you to borrow the funds at a lower cost. Sometimes, you might get a reduced interest rate if you’re already a bank customer, or if you have recurring payments set up from your account.

Origination Fees

Origination fees are up-front payments charged by lenders when you apply for a credit. The exact amount you’ll have to pay is usually determined by your lender and the kind of loan you’re receiving. They typically range between 1% and 10% of the borrowed sum and are commonly withheld from loan proceeds. The good news is that Discover doesn’t charge any origination fees at all, which is another strong reason to opt for this provider.

Discover Card Loan Features

Paying Creditors Directly

Discover can cover your credit cards and other bills directly, rather than moving the sum to your bank account. This guarantees that your creditors are paid on time and simplifies the process of combining several balances. It also reduces the risk of missing your payments, which is probably the last thing you want to deal with.

30-day Reimbursement Guaranteed

Discover offers a money-back guarantee, allowing borrowers to cancel the deal within 30 days of funding without paying any interest. If your circumstances change and you find yourself no longer needing the money, you can pay back the entire amount with no additional fees. However, this guarantee only applies to loans where funds are sent to your account, not those paid directly to a creditor as a part of debt consolidation.

Flexible Terms and Alternatives for Repayment

With Discover, the borrowers can not just choose their repayment term but also adjust the date of their payments. As long as there is a minimum of one year gap between adjustments, customers can modify their due date twice during the term. They can repay the loan by sending a check or money order by mail, online through a mobile app or website, or in person at your local bank branch.

The Option of Early Repayment

Many banks charge fees for paying a loan off before the term ends. Luckily, Discover doesn’t impose these penalties. In the long run, this can save you money by lowering the overall amount of interest you’ll have to pay. Using this feature can even improve your credit rating a bit! It provides financial flexibility and is a smart move for those looking to minimize interest costs.

Credit Scorecard

Discover offers its clients access to a free credit scorecard with their most recent FICO credit score details. The card also includes detailed insights into key factors such as credit utilization, recent inquiries, and missed payments to help borrowers stay informed about their financial health.

Discover Card Personal Loans Pros and Cons

Pros

1. Optional payback periods from 3 to 7 years. You can determine the payment date on your own, but remember it will affect your ARP.
2. No upfront fees. Discover does not charge the origination fee.
3. Minimal interest rate. The annual percentage rate for the clients with excellent credit scores is 7.99, which is fairly inexpensive.
4. Customer service. The bank’s online support is available to you seven days a week.

Cons

1. A ceiling on the loan sum. This lender will give you no more than $40,000 per loan.
2. No joint loans. You can’t add a cosigner to increase your chances of approval and get a better interest rate.
3. Late fee. Discover may impose a late fee of up to $39, which will also impact your credit score, so you might want to consider other lenders if you’re concerned about missing a payment.

How to Get a Discover Personal Loan?

Most Discover personal loan reviews suggest that getting a loan at Discover is a fairly straightforward affair. This process consists of the following steps:

1. Calculate Your Expected Monthly Bills

To find out your monthly installment and APR, you can use a simple online calculator available at Discover’s website. Those are based on the applicant’s credit rating, the amount borrowed, and the payment period. Consider whether you can afford these payments.

2. Prequalify

You’ll need to provide basic details like your name, residence, earnings, Social Security number, and birthdate to find out your potential rate. In contrast to other lenders, this check won’t impact your credit score.

3. Submit the Application

Complete your application if you’re satisfied with the prequalification rate. Remember that finalizing the deal will trigger a hard credit check, which will temporarily decrease your credit score.

You’ll also have to verify your bank account and provide details about your job and income. A customer wishing to consolidate their debts must provide some additional information, including outstanding debt balances and their creditor’s account number.

4. Sign the Contract and Arrange a Payback Schedule

Finally, you’ll need to sign the agreement online and agree to get updates on your email. After approval, you’ll receive money within several working days, either directly or, if you consolidate debts, sent to your creditors.

Once your funds have been issued, start repaying per your loan’s conditions. You can do so automatically or manually by phone, mail, online account, wire transfer, or digital bill payment via bank. Remember that late payments will negatively affect your credit rating and result in additional fees.

Conclusion

Many Discover personal loans reviews on the Internet claim this option is the best on the market. Well, they don’t lie: the flexible payment terms, low APR, and absence of origination fees make it an appealing option for those who qualify for it. If you are one of them, lucky you! Just don’t forget that you’ll still need a solid installment plan.