Editorial Review

Discover Personal Loans: 2019 Review

Discover offers APRs with no origination fee and an option to directly pay off creditors, which can help you successfully consolidate debt.

Amrita Jayakumar, Steve NicastroSeptember 13, 2019

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Our Take

4.5

NerdWallet rating 

The Bottom Line: Discover is ideal for consumers with good to excellent credit who want to consolidate high-interest debt.

Discover

Discover Personal Loan

Min. Credit Score

660

Est. APR

6.99-24.99%

Loan Amount

$2,500-$35,000

Pros & Cons

Pros
  • No origination fee.

  • Option to directly pay creditors.

  • Free credit score access.

Cons
  • Charges late fees.

  • No co-sign option.

Compare to Other Lenders

FreedomPlus
Payoff
Est. APR

5.99-29.99%

Est. APR

5.99-24.99%

Loan Term

2 to 5 years

Loan Term

2 to 5 years

Loan Amount

$7,500-$40,000

Loan Amount

$5,000-$35,000

Min. Credit Score

640

Min. Credit Score

640

Compare estimated rates from multiple lenders

Compare Rates

Full Review

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.

Discover personal loans offer flexible payment options and low annual percentage rates to borrowers with good to excellent credit (690 or higher on the FICO scale). These loans are ideal for someone looking to consolidate debt.

Loan uses: As one of a handful of banks offering personal loans, Discover caters to borrowers looking to consolidate debt because of its low rates, direct payment to creditors and flexible repayment terms. If you get a loan for consolidation, you must use at least 70% toward paying off debt.

Borrowers can also use a Discover personal loan for home renovations and other large expenses, says Dan Matysik, vice president of the company’s personal loans division. Loan terms range from three to seven years.

The loans can’t be used to pay for college or to pay a balance on a secured loan or Discover credit card, he says.

Best of 2019: NerdWallet recognized Discover among our list of Best Personal Loans of 2019 in the category of debt consolidation.

Payment options: Borrowers can change 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: If you decide to return a loan, you can do so within 30 days of taking it out without paying interest, Matysik says.

Deferred payments may be offered to borrowers who have trouble making payments.

Financial education: The company provides free tools to manage debt and estimate monthly payments on its personal loans website.

Fees:

  • 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.

Check rates from other lenders

NerdWallet recommends comparing loans to find the best rate for you. Click the button below to pre-qualify and receive a personalized rate from multiple lenders that partner with NerdWallet.

Before you shop for a personal loan

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.