Discover personal loans: a comprehensive review for 2023

Introduction to Discover

Discover is a credit card brand primarily issued in the United States. It was launched by Sears in 1985. At launch, the lending partner had no annual fee and offered above-average credit limits, features that disrupted the current credit card industry. Best known for its credit cards, the lender also offers personal loans, home loans, student loans, and other financial services.

Discover is an independent credit card network, which means it acts like an acquiring bank. This reduces flexibility, but acquiring bank transaction fees are unique to closed networks.

 

Today, payment with the Discover card is one of the most widely accepted forms of card payment in the world, along with Visa, MasterCard, and American Express. Discover card payments are accepted in the United States by 99% of places that use credit cards. Internationally, Discover card payments are accepted in 200 countries.

What is my Discover online credit card account number?

You can find your Discover credit card account number by looking at the 16-digit code on the front of the card.

If you have a virtual or digital card, you can check your card number by logging into the card issuer’s or bank’s mobile app.

• The first number is 6: The first number is called the Major Industry Identifier (MII). The number 6 stands for Commerce and Banking (Discovery).
• The next 5 digits: XXXXX These are called the card’s Issuer Identifier (IIN) or Bank Identification Number (BIN). They help identify which credit card company issued the card and which network it belongs to.
• The next digit 9-12: XXXXXXXXX The card number except the last digit, the seventh digit and all other digits indicate the personal account of the card. Your account number can be as short as nine or twelve digits.
• Last digit: The X checksum is the last digit of the credit card number. This is a code that is used to determine if a credit card is valid. A procedure called the Luhn algorithm generates the “check digit” or “key”.

Discover personal loans at a glance

Who is Discover best for?

This lending partner is an excellent choice for consumers needing a small loan, as the minimum loan amount is only $2,500. Additionally, it offers flexible repayment terms where clients can use the funds for multiple purposes.

Its wide range of uses – combined with the short financing timeframe – make Discover personal loans an excellent choice for consumers who need cash to pay for everything from planned home improvements to unexpected medical bills or other more unpredictable expenses. It’s also a great option for debt consolidation, as the lender can directly repay third-party creditors with the proceeds of the loan.

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Loan Amounts & Terms

• Loan amounts: unsecured personal loans from $2,500 to $40,000 in all 50 states.
• Loan terms: personal loans are available for terms of 36, 48, 60, 72, and 84 months.

Loan Costs

• APR. annual percentage rates (APRs) between 6.99% to 24.99%, with the lowest rates reserved for the most qualified customers. Overall, rates are based on a combination of factors including credit history, application information and loan term.
• Rate discounts. This lender does not offer a discount for borrowers who sign up for automatic payments. Autopay discounts at other lenders typically range from 0.25% to 0.5% off the standard APR.
• Origination fees. This lender does not charge any closing costs or origination fees.
• Prepayment penalty fees. Discover does not charge customers prepayment penalties. This gives borrowers the ability to pay off their loans prior to the end of their loan term without incurring additional costs.
• Late fees. While this lending partner does not charge borrowers any other fees, it may impose a late fee of $39 if a payment is not received by its due date.

Pros & Cons of Discover personal loans

Pros

• No origination fee.
• Option to pre-qualify with a soft credit check.
• Fast funding.
• Mobile app to manage loans.

Cons

• May charge late fee.
• No co-sign or joint loan option.
• No rate discount.

Perks & Features

•  30-day money back guarantee. Discover offers a 30-day money-back guarantee on personal loans. With this benefit, borrowers get all loan funds back and can cancel the loan if they decide within 30 days of funding that they don’t want the loan. No interest is charged to borrowers who request this guarantee. Note, however, that funds paid directly to creditors are not eligible for benefits.
• Direct payments from creditors. Discover personal loans can be used to consolidate credit card and other types of debt. The lender will pay each account directly instead of depositing the loan funds into your personal bank account.
• Payment flexibility. The loan partner not only offers flexible repayment terms, but also allows borrowers to change the repayment due date to better fit their budget. Customers can change the repayment date twice during the life of the loan, as long as there is at least one year between changes.
• Credit Scorecard. This lending partner provides access to a free Credit Scorecard that includes an updated FICO credit score each month, plus information about credit utilization, recent inquiries, and missed payments.

Minimum credit score	660.
APR	6.99% – 24.99%.
Fees	Late fee: $39.
Loan amount	$2,500 to $40,000.
Repayment terms	3 to 7 years.
Time to fund after approval	Next business day.
Loan availability	Loans are available in all 50 states, Puerto Rico, and Washington, D.C.

Where Discover personal loans stand out

1. Debt consolidation: Discover is a good option for debt consolidation. Qualified applicants may qualify for a low rate, and if approved, it will send loan funds directly to your creditors within one business day. This lender offers an online consolidation calculator that shows potential savings with a Discover personal loan.
2. Customer support: This lending partner has a team of U.S.-based loan specialists available seven days a week during extended business hours to answer questions. Customers can also access the Discover Online Account Center to view their progress on payments and begin the payoff process at any point in the loan term.
3. 30-day loan guarantee: Discover offers a unique 30-day money-back guarantee where customers can cancel their loan for any reason, return the funds and pay zero interest. Requests to cancel your loan must be made in writing, sent by mail, and include a check for the amount of the loan. If you use your loan to pay creditors directly, you can’t return the funds after they have been sent.
4. Refinancing option: Borrowers can use a Discover loan to refinance an existing personal loan from another lender. If you qualify for a lower rate, you could save money on interest and pay off your debt faster.

Discover personal loans requirements

This lender doesn’t disclose many borrower requirements, but according to the lender, it reviews credit history, recent credit activities, and credit inquiries when evaluating an application. Here’s what you need to qualify:

• Minimum credit score: 660.
• Minimum annual individual or household income: $25,000.
• Must be at least 18 years old.
• Must be a U.S. citizen or permanent resident.

How to apply for a Discover personal loan

Here are the steps to apply for a Discover personal loan.

1. Decide how much you need. Understand how much you need from a personal loan by looking at your monthly budget and cash flow. This is also a good time to get your documents together to help with verification during the application process.
2. Pre-qualify with Discover over the phone or online. You will be asked how much you want to borrow and what the funds will be used for, as well as some personal information such as your name, date of birth and address. You will also be asked about your income, employment and home ownership. There are no hard credit deductions at this time.
3. Preview loan offers and accept the one that fits your budget. Discover can display up to five loan offers with different interest rates, terms and monthly payments. Once you’ve found a loan that’s right for you, submit a formal personal loan application. This may need to be verified with documents such as W-2s, pay stubs and bank statements. There are strict credit checks when you apply, so your credit score may temporarily drop. After you apply, a loan specialist with that lender may contact you to confirm the information you have provided.
4. Make a plan to repay the loan. This lending partner reports payments to all three major credit bureaus, so on-time payments will help build your credit score, but missed payments will hurt it. Setting up automatic payments and keeping an eye on your budget are two ways to manage your loan payments.

How we rate Discover personal loans

We rate lenders against a rubric that changes each year based on how personal loan products evolve. Here’s what we prioritized this year:

Category	Overall Score
Affordability	4.5
Transparency	5
Loan flexibility	5
Customer experience	4.5
Overall	4.8

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