Discover Personal Loans Review [2024]: Pros and Cons

The average interest rate on credit cards skyrocketed to almost 20% in November 2022.

This means if you’re carrying a balance, you could end up paying substantially more in interest. 

Instead, you could consider getting a personal loan. 

Discover offers personal loans that allow consumers to consolidate high-interest credit card debt, amongst other things. 

So, if you want to save money on credit card interest or need money fast, this article is for you.

My Discover personal loans review will cover everything you need to know about this popular online lender.

What You Need to Know About Discover Personal Loans

Discover is an online lender that provides personal loans for almost anything life throws your way. 

You can use these personal loans for:

• Debt consolidation
• Home improvements
• Medical expenses
• Vacations
• Weddings 

Customers can borrow anywhere from $2,500 to $35,000 and repay it over 36 to 84 months. The interest rates are also reasonable, starting at 6.99% and going up to 24.99%. 

The minimum credit score is 660, so it doesn’t matter if you have bad credit; Discover has you covered.

You can even receive your personal loan within one business day of approval, making it a perfect option if you need money now. 

Side note: Although Discover is quite flexible about what you can use your personal loan for, there are some restrictions. For instance, you cannot use Discover personal loans to pay for college, settle a secured loan, or pay off a Discover credit card.

How to Qualify for a Discover Personal Loan

Thinking about signing up for a Discover personal loan? Not so fast. 

Discover has strict criteria that you must meet if you want to qualify. If you fail to meet these requirements, Discover will decline your application, which could impact your credit.

Here are the three primary factors that Discover reviews before approving your application:

1 – Earn a Minimum Household Income of $25,000 Per Year

The first thing that Discover takes into account is how much money your household earns. To be considered for a personal loan, you must have an annual household income of $25,000.

This doesn’t mean you need to earn $25,000 individually, even though it helps. Discover looks at everyone that lives in your house. If the total annual income is above $25,000, it moves you one step closer to getting approved for a personal loan.

2 – Have a Credit Score of 660

Another thing to sort out before applying is your credit score. 

The minimum credit score requirement is 660. If your credit score is below this number, I suggest paying off some existing credit card balances or loans. 

This will show Discover that you’re a responsible consumer who pays their debts on time.

3 – Have a Low Debt-To-Income Ratio

Having good credit doesn’t mean taking on a lot of debt. In fact, this can actually work against you.

If most of your income is used for paying off credit card debt and you have little disposable income, you’re more likely to miss a payment.

Discover says they consider your debt-to-income (DTI) ratio to see how much you can afford to borrow, but they don’t provide a specific number. 

However, most experts say that a low DTI ratio is anything below 30%. 

How to Apply for a Discover Personal Loan

Now, this wouldn’t be a full Discover personal loans review if I didn’t tell you how you can apply. 

Do you meet Discover’s personal loan requirements? Awesome! 

Here’s my four-step guide to applying for a Discover personal loan:

1. Check your rate
2. Submit a personal loan application
3. Get approved and collect your funds
4. Make your monthly payments 

Step 1 – Check Your Rate

The first step is going to the Discover website and selecting the “Check Your Rate” icon. This lets you view possible loan options, interest rates, and fees.

Discover uses a soft credit check to present you with these options so that it won’t hurt your credit.

During this step, you’ll have to provide Discover with the following information:

• Your full name, email address, and phone number
• The amount of money you’re looking to borrow
• The amount of time you’ll need to pay it back
• The purpose of the loan

For instance, Discover will offer lower interest rates if you’re using your personal loan to consolidate credit card debt or refinance a high-interest loan.

Step 2 – Submit a Personal Loan Application

Submitting a formal loan application only takes a few minutes. 

You’ll have to provide the following:

• Employment and income verification
• Bank account information 
• Credit card account balances (if you’re consolidating debt)

When Discover receives your loan application, a consultant will contact you to verify that the information you gave is correct.

Step 3 – Get Approved and Collect Your Funds

You can expect same-day approval as long as your application isn’t missing information. 

After this approval date, Discover takes another business day to send the loan to your account, meaning you get your money quickly. 

Step 4 – Make Your Monthly Payments

Once you’ve received your loan, it’s time to make your monthly payments.

Discover will let you know at the beginning of your application process when your monthly installments are due.

However, I highly recommend signing up for autopay. 

If you’re not familiar with this feature, it lets Discover automatically collect the monthly installments from your bank account every month. This is great because it means you won’t have to worry about remembering to make payments on time.

Are Discover Personal Loans Legit?

Discover is a legit online lender. 

It’s a public company traded on the New York Stock Exchange, which means all of its financial documents are public information. 

Discover also had to be vetted by multiple financial agencies before going public. This transparency ensures there are no unlawful business practices.

It’s easy to see why Discover personal loans have over 20,000 customer reviews and an average rating of 4.9 stars.

Is Discover Safe?

Discover is a safe and secure online lender. 

It uses Secure Socket Layer (SSL), so whenever you give Discover your personal information, SSL scrambles it, so hackers can’t access it. 

You can have peace of mind knowing your information is in safe hands.

Pros and Cons of Discover Personal Loans

Pros	Cons
Long repayment plans	Can’t use it to consolidate Discover credit card debt
Zero origination fees	There’s no in-person service available

Discover Reviews

Most Discover online reviews are positive. Borrowers mention the fast payouts, good customer service, and easy qualification process. 

For example, this Discover personal loans review loved the simple sign-up process.

Another Discover personal loans review by this Reddit user liked the easy application process and friendly customer service. The interest rates are good, so you can use them to consolidate debt and save money.

But keep in mind that you aren’t guaranteed good interest rates. 

For instance, these Discover personal loan reviews say that they couldn’t qualify for low APRs.

Commonly Asked Questions About Discover Personal Loans

Alternatives to Discover Personal Loans?

Here are the top alternatives to Discover personal loans:

• ZippyLoans (read this ZippyLoan review)
• Upgrade (read this full Upgrade personal loans review) 
• AmOne (read this full AmOne review)
• SoFi
• CashUSA (read this full Cash USA review)
• LendingClub (read this full LendingClub personal loans review) 
• LightStream (read this full LightStream personal loans review) 
• OneMain Financial (read this full OneMain Financial personal loans review)
• Marcus by Goldman Sachs (read this full Marcus personal loans review)
• Happy Money (read this full Happy Money personal loans review)
• Best Egg (read this full Best Egg personal loans review)

What Credit Score is Needed For a Discover Personal Loan?

You need a credit score of 660 to qualify for a Discover personal loan. However, Discover doesn’t just use this score to make their decision. They’ll look at how much your household earns and your debt-to-income (DTI) ratio.

Is it Hard to Get Approved for a Discover Personal Loan?

Getting approved for a Discover personal loan isn’t that hard because it requires a household income of only $25,000 per year and a ‘good’ credit score of 660.

How Fast is Discover Personal Loans?

Discover pays out their personal loans quite quickly. You’ll know if you’re approved the same day you submit the application, and you can expect to see the money in your account within one business day.

Are Discover Personal Loans Fixed or Variable?

Discover uses fixed interest rates on their personal loans, meaning your interest rate won’t fluctuate. This is good because it keeps your monthly installments predictable.

Discover Personal Loans Requirements?

To qualify for a Discover personal loan, you must have an annual household income of $25,000, a credit score of 660, and a good debt-to-income (DTI) ratio.

Do You Need Proof of Income For a Discover Personal Loan?

Yes, you will need to provide proof of income when applying for a Discover personal loan. This proof could be in the form of payslips, bank statements, or tax returns.

Does a Discover Personal Loan Hurt Your Credit?

Applying for a Discover personal loan will temporarily hurt your credit because Discover conducts a hard credit inquiry. But if you’re approved and make your payments on time, you should end up increasing your credit score.

Who is Discover Best For?

Discover personal loans are best for anyone looking for the lowest interest rates. Discover has rates as low as 6.99%, which is lower than other lenders.

Discover Personal Loan Denied?

If your Discover personal loan was denied, it either means that your credit was below 660, you had too much existing debt, or your household income was below $25,000. Once you’ve identified the issue, focus on improving it and apply again.

Sofi Vs. Discover Personal Loans?

Discover offers personal loans at a lower interest rate than Sofi. This makes Discover a better option because the low interest will help you save money. However, Sofi allows members to borrow up to $100,000, so it’s more practical if you need a large loan.