Discover Personal Loans Review 2020

4.2 stars out of 5

The Smart Investor reviews are unbiased, and reflect the views of our editorial staff. We’ve collected the information independently. Issuers did not provide the details, nor are they responsible for their accuracy. The review is not a recommendation, the actual rates/fees may be different.

Discover – About The Lender

Discover Personal Loans is a product offered by Discover Bank. The bank was started in 1985 by Sears as a credit card. The company was owned by a few large companies before spinning off as its own company in 2007.

Discover Personal Loans is a mass market provider of personal loans with a focus on debt consolidation and financial educational resources. Discover is a very large player in the personal loan space and is a large public bank with billions of dollars in assets and in revenue. Discover offers many different products that most large banks provide.

Loan Specification

Here are the basic specifications & requirements of Discover Personal Loans :

FeatureDiscover Personal Loans
Loan Amount Range$2,500 – $35,000
Interest Rate Range6.99% – 24.99%
Term36 to 84 months
Origination feeNone
Late Payment Fee$39
Returned payment fee$39
Prepayment FeeNone
Minimum income$25,000 annually
Minimum Credit Score660
Funding1 to 7 days
Documents To Provide
  • Income
  • Employment history
  • Banking information
  • creditor information (debt consolidation)

Discover Loan Pros & Cons

As we know, each lender has its own pros & cons – here are the relevant things we found for potential borrowers:


  • Soft Pull Inquiry – Discover personal loans allow for an initial soft pull inquiry online so the borrower can get an idea of the options for which they may qualify
  • No Origination Fee – Discover personal loans has no origination fee and no prepayment penalties. These fees should always be considered in the cost of your loan. Many personal loan providers have large origination fees.
  • Direct Payment to Creditors – Discover offers to send payments directly to creditors as part of their service. This way you know your new loan will go to pay down your current debt and not add to your overall debt.
  • Competitive Interest Rates – Interest rates are competitive and rates are not as high as those of many other lenders for personal loans.
  • 30 Day Money Back – “Discover Personal Loans strives to offer the lowest rate possible for personal loans. As a result, our loans include a 30-day money-back guarantee. If you decide within 30 days that you do not want your Discover Personal Loan, simply return the funds via check (including any amounts paid directly to your creditors). You will be charged zero interest.”
  • Available in All States – Many personal loan providers are not licensed or available in all states.
  • Longer Terms – Discover personal loans offer longer terms, up to 84 months, which is much longer than many other providers


  • Longer Application Process –Discover personal loans turnaround can be longer than many other personal loan providers. Most loans will require you to call in and talk to a Discover representative.
  • Smaller Max Amount –Discover personal loans’ max amount is smaller than many other personal loan providers.
  • No Joint Borrowers – Discover does not allow for joint borrowers.
  • Large Late Payment Fee –Discover personal loans have a late fee of $39, which is higher than most other providers.

What Can a Discover Personal Loan Be Used For?

Discover personal loans can be used to pay for debt consolidation, vacations, wedding expenses, or home improvements. They cannot be used for any post-secondary education expenses.

  • Debt Consolidation

Discover personal loans focus on helping borrowers pay down debts. Debt consolidation loans with Discover require 70% of the loan to be paid to the creditor directly. If you don’t, the rate may be higher. If 70% of the loan does not go to the creditor, it could even result in a decline.

Debt consolidation is seen as wiping out debt and if you have lots of credit card or other debt and do not pay it off, Discover could decline the loan outright. Discover’s website has a very useful tool, the debt consolidation calculator, which you can use to see if a Discover loan may be right for you.

  • Vacation

A Discover personal loan for vacations offers a way to get money for your vacation without having to deal with credit cards or worry about every dime during travel. This includes everything from family vacations to international travel and cruise vacations.

  • Engagement Ring and Wedding Expenses

Using Discover personal loans for an engagement ring will reduce the overall cost of one of the biggest purchases of your lifetime. You can also use Discover personal loans for wedding expenses, including your reception and honeymoon.

  • Discover Home Improvement

Discover personal loans can be used for home repairs or renovations. The advantage of using a Discover personal loan for home improvement is the promptness of receiving the funds. Typically, it takes a month or more to get an equity line of credit on your home. Discover personal loans also offer loans for green improvements. Discover has information on how “green” upgrades can save you money and improve your home.

  • Discover Application Process

The minimum application requirements are that the borrower must be a US citizen or a permanent resident who is at least 18 years of age and makes at least $25,000 a year. Discover aggressively markets their personal loans, mailing out millions of invitations to apply.

They have a large customer base, marketing to those who use their credit cards or other banking products. You do not need an invitation to apply. You can apply online or by phone. Even if you apply online, you will have to speak to a Discover representative. You can do a soft pull online to see what kind of rate Discover will offer to you. You will need basic personal information such as income, employment and banking information.

If you are planning to consolidate debt, Discover will require creditor information, including balances and account numbers. The application process for Discover personal loans usually takes 1 to 7 days. In some cases they will require additional information in order to verify identification and/or income.

Discover Personal Loan is Best for..

Discover personal loans are backed by a large bank with billions of dollars in assets and is a major provider of credit products. They have competitive rates and terms with no origination fees. 

Discover may focus on debt consolidation but their personal loans have many different uses. It a mass market product that can be of use to almost anyone.