The Bottom Line: Discover is ideal for consumers with good to excellent credit who want to consolidate high-interest debt.
Discover Personal Loan
Min. Credit Score
Pros & Cons
No origination fee.
Option to directly pay creditors.
Free credit score access.
Charges late fees.
No refinancing option.
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To review Discover, NerdWallet collected more than 30 data points from the lender, interviewed company executives and compared the lender with others that seek the same customer or offer a similar personal loan product. Loan terms and fees may vary by state.
Americans who want to pay down debt and save on interest are the core of Discover’s personal loans business, says Dan Matysik, vice president of the company’s personal loans division.
While Discover loans can be used for other purposes, they work particularly well for debt consolidation because of low rates, direct payment of creditors and flexible repayment terms. If you get a loan for consolidation, you must use at least 70% toward paying off debt.
Best of 2019: NerdWallet recognized Discover among our list of Best Personal Loans of 2019 in the category of debt consolidation.
Payment options: Borrowers have the option of changing the payment due date if the loan payments no longer fit into their budget. You can change the due date twice during the lifetime of the loan, with a minimum of one year between changes.
Discover also allows customers to make recurring payments on a weekly, bi-weekly or semi-monthly basis, in addition to its monthly autopay option.
Flexibility: Deferred payments may be offered to borrowers who have trouble making payments. The company provides free tools to manage debt and estimate monthly payments on its personal loans website.
Origination fee: None.
Late fee: $39.
How to qualify:
Minimum credit score required: 660; borrowers' average score is about 750.
Minimum gross income required: $25,000, but typically much higher.
Loan example: For a borrower with excellent credit, a $20,000 loan with a repayment term of 60 months at 13.9% APR would carry monthly payments of $464, according to NerdWallet’s personal loan calculator.
How to apply for a Discover personal loan
You can fill out an application on Discover’s website or over the phone. Discover conducts a soft credit check to see if you qualify for a loan. Once you proceed with your application, you will be subject to a hard credit check, which can temporarily lower your credit scores. It reports payments to all three credit bureaus.
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Personal Loans Rating Methodology
NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including: soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus, and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews. Read our editorial guidelines.