Discover is a financial institution based in Riverwoods, Illinois that offers a wide range of loan and financial services. It has a global network, covering 2 million ATM and cash acceptance locations and 48 million merchant acceptance locations spread all across the world. Predominantly known for its credit cards, the company also offers home loans, personal loans, student loans, and other financial services for its clients. As of March 2021, the company had about $7 billion in outstanding personal loans.
What Type of Personal Loans Does Discover Offer?
Discover personal loans are provided by Discover Bank, founded in 1985, and are available in 50 U.S. states (and Washington, DC). The bank offers unsecured personal loans for its clients. You can use these loans for many purposes, such as funding a wedding, covering unexpected expenses, paying for a vacation, or paying for adoption or fertility costs. Not only this, you can even use the loan to repair your home or advance it by making energy-efficient improvements without having to use your home as collateral. In short, you can do (almost) anything personal with Discover personal loans.
There are a couple of things you can’t do using the Discover personal loan funds. They include paying for post-secondary education, paying off an existing Discover credit card, or repaying a secured loan. But you are free to use the funds from your personal loan to clear other unsecured debt, like balances for credit cards issued from another bank.
Who Qualifies for a Personal Loan From Discover?
In order to be eligible for a Discover personal loan, you need to be:
- At least 18 years old
- A U.S. citizen or a permanent resident of the country
- Earning at least $25,000 (yearly) in household income
To make sure that you have sufficient income to pay the loan back, Discover will take some time to review your credit history and financial information. The bank will also check if you meet its other creditworthiness requirements, such as your debt-to-income ratio. There is no information available about the specific criteria used by Discover to determine if you are creditworthy. Have a good credit score to be on the safe side.
How Can You Apply for a Discover Personal Loan?
You can apply for a personal loan with Discover online, by email, or over the phone by calling 1-866-248-1255. To get started with your application, you can fill in the prequalification form for a personal loan that will help you check the potential loan rate. It won’t affect your credit score in any way.
If you are filling out the official application, you need to be ready for a hard credit inquiry. Based on this inquiry, the bank will decide your terms and final rate, which may differ from your estimate. Discover will ask for your personal information, including:
- Employment history
- Household income
- Details of your creditors, such as the amount you owe them and their account numbers
- Personal bank account numbers
Keep all such information handy for a quick process.
How Much Time Does it Take To Receive Funds?
Discover has an exceptional funding speed. In most cases, the bank will communicate to you if you are approved for a personal loan on the same day you apply. You can expect to get funded on the next business day once you have accepted the loan terms.
When you are applying for a Discover personal loan, the bank will ask you about how you want to receive the loan. You can choose to get the funds directly into your bank account or ask the bank to send the funds directly to your creditors. The decision is yours.
Discover Personal Loans Review — Pros
- Discover offers fixed-rate loans ranging from $2,500 to $35,000
- The bank will decide the quote based on your credit history, the amount you need, and the time needed to repay
- Discover’s personal loans come at an annual percentage rate (APR) of 5.99% to 24.99%
- The interest rate will be based on the borrowed amount, your creditworthiness, and the duration of your loan
- Discover offers a 30-day money-back guarantee — if you find another lender with better terms within 30 days, you can return the loan without paying any interest charges or penalties
- Discover does not charge a loan origination fee for its personal loans
- With Discover, you get long loan terms of up to 7 years, but most personal loans from Discover have a maximum term of 5 years
Keep in mind that if you decide to use your Discover loan for paying your debts off, you’ll have to send a minimum of 70% of the funds to your creditors. Failure to do so will risk losing final approval or affect your approved APR.
Discover Personal Loans Review — Cons
- APRs for Discover personal loans can be as high as 24.99%
- Discover personal loans don’t report to credit bureaus
- The bank charges you a late fee of $39
- You can’t get a personal loan from Discover without a Social Security Number (SSN)
- Discover personal loans can’t have any co-borrowers and co-signers
- You must have a high credit score, a minimum of 660
- You don’t get any discount if you enroll in automatic payments
- Discover personal loan funds can’t be used for paying for post-secondary education, paying off an existing Discover credit card, or repaying a secured loan.
Does Discover Allow You To Refinance a Personal Loan?
Discover may allow refinancing a personal loan for both long and short terms. For a short-term financial hardship, the bank may offer short-term assistance in the form of interest-only payments or payment deferrals for short periods (six to 12 months). For people having long-term financial hardships, Discover might extend the terms of their loan and reduce monthly payments for the rest of their loan period.
Discover personal loans sound like a good deal as they come with fixed, competitive rates and no fees. You’ll need a good credit score and a strong financial history though. Discover has personal loan calculators that help customers determine their loan eligibility and the type of loan they can expect from the bank, making it a great choice for personal loans.
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