Discover Personal Loans Review: Is It the Right Choice for You?

Business Insider's personal finance team compared Discover Discover Personal Loans to the best personal loans and found it to be a strong option if you have a good credit score. However, if you're late on making a payment, you may be charged a hefty $39 late fee.

Discover Loans Overview

What Are Discover Personal Loans?

Discover is a solid option for borrowers who want to avoid origination fees. Borrowers with excellent credit may also qualify for the lender's competitive minimum rates. If you need a home improvement loan, Discover could be a good option, though remember that the maximum amount you can take out is $40,000.

However, if you hope to enlist a cosigner to help you qualify or get a better rate, you'll have to look elsewhere. Discover doesn't allow co-signers.

Loan Amounts and Terms

Borrowers can get up to $40,000 with a Discover personal loan, and choose a loan term between 36-84 months (three to seven years). Longer loan terms will have smaller monthly payments, but higher interest rates overall. Choosing a shorter loan term will require higher monthly payments but lower interest.

Discover Personal Loan Rates and Fees

Interest Rates and APR

Discover personal loans have competitive rates, with APR ranging between 7.99% to ​24.99%. Your interest rate will depend on your application, eligibility, and your loan term.

Are There Any Fees?

Discover personal loans do not charge any origination fees or prepayment penalties. However, you may run into a late payment fee of $39

Understanding Origination Fees, Late Fees, and Prepayment Penalties

Origination fees are fees that lenders charge to initiate and distribute loan funds. Not all lenders charge origination fees, but they are fairly common. Late fees are the most common type of fee that borrowers can expect to run into, but each lender is different. Some late fees will be a fixed amount, whereas others will be a small percentage of your outstanding balance. Prepayment penalties occur when borrowers make one or more early payments. Not every lender charges prepayment penalties, so review your loan terms to confirm. 

How Discover Compares to Other Lenders in Terms of Fees

Discover meets the industry standard when it comes to fees. It charges neither origination fees nor prepayment penalties, but late payment fees should be expected. Be sure to thoroughly examine your borrowing agreement to ensure you're not hit with any surprise charges.

Discover Loan Eligibility and Application Process

Eligibility Requirements

To be eligible for a Discover Personal Loan, you must have a household annual income of at least $25,000, be over 18 years old, and have a valid Social Security number. Loan approval is subject to review, depending on your income, debt-to-income ratio, credit history, and application information.

Step-by-Step Guide to Applying for a Discover Personal Loan

1. Estimate your monthly payments. You can use Discover's calculator to estimate your monthly payments based on your loan amount, credit score, and interest rate. Make sure you can fit these payments into your budget. 

2. Prequalify for a loan. To see what rate you'll get, you'll need to send in basic information, such as your name, address, income, Social Security number, and birthday. PNC will perform what's known as a soft credit check, which will not affect your credit score.

3. Send in an application. You may also need to give the lender W-2s, pay stubs, and bank statements to confirm the information you provided. When you submit your application, Discover will conduct a hard credit check, which may temporarily lower your score. 

4. Accept your loan terms and plan for repayment. After you sign the document accepting your loan terms, your loan will be approved and funded, possibly as soon as the next business day. Budget for your loan payments — late payments may add significant costs to your loan.

Discover Loan Repayment and Flexibility

Repayment Options

Discover Personal loan repayment terms often range between two to seven years, and can go up to 12 years if you've borrowed a large amount. However, you should choose the repayment term that makes the most sense for you. For example, a longer repayment term typically allows for smaller monthly payments, but more interest over the life of the loan. A shorter term will require larger monthly payments but cost less in interest overall.

Flexibility in Repayment Terms

With Discover Personal Loans, you can make early payments and extra payments and pursue repayment assistance if needed. You can pay back your personal loan in several ways, including:

• Mobile app
• Automatic payments
• Secure Account Center
• Automated phone call
• Speak directly to a representative
• Mail
• Wire transfer
• Electronic bill pay with your bank

Valued Discover Personal Loans, customers can adjust their payment dates, if necessary, to a day that's more compatible with a monthly budget.

Early Repayment and Its Benefits

While you can run into prepayment penalties with a handful of other lenders, there is no penalty for paying off your loans early with Discover. 

Use Cases

How to Use a Discover Personal Loan for Debt Consolidation

You can use a Discover Personal Loan for a wide range of purposes. One of the most common reasons borrowers use personal loans is debt consolidation. If you have an excellent credit score and can qualify for the lowest interest rates with no more than $40,000 of debt to consolidate, a Discover debt consolidation loan might be right for you.

Other Common Uses for Discover Personal Loans

While Discover Personal Loans are good options for debt consolidation, you can also use them for home improvement, medical expenses, wedding costs, vacation funds, pet emergencies, moving expenses, and other emergencies.

Discover Personal Loan Alternatives

Discover Personal Loan vs. Prosper Personal Loan

You can borrow up to $40,000 with Discover, which is equal to Prosper's maximum loan amount. If you need a larger personal loan, another lender, like LightStream Personal Loan or SoFi might be a better option.

Prosper will charge you an origination fee between 1.00% to 9.99% of your total loan amount, while Discover doesn't charge an origination fee.

Read our Prosper personal loan review.

Discover Personal Loan vs. PNC Personal Loan

PNC's personal loan maximum loan amount is $35,000, slightly less than Discover's. PNC's terms are between 6 to 60 months, while Discover's range from 36 to 84 months. If you want a shorter term length — and to save money on overall interest in the process — PNC Bank may be the best choice for you. 

Neither PNC nor Discover charges origination fees.

Read our PNC personal loan review.

Discover Personal Loan Pros and Cons

Pros

• No origination or prepayment fees. While some lenders charge an origination fee, which comes out of your total loan proceeds, Discover won't hit you with that fee. There's also no cost for paying off your loan early. 
• Low minimum APR. Discover Discover Personal Loans has a relatively low minimum APR of 6.99%, which is one of the more favorable rates out there. However, you'll only be eligible for that rate with an excellent credit score. Consider more options for the best low-interest personal loans. 

Cons

• Low maximum loan amount. You can only borrow a maximum of $40,000 with Discover. Other lenders will allow you to borrow more if you need money for a bigger project.
• Unable to add a co-borrower to your application. If your credit isn't in the best condition and you want to add a co-borrower to increase your chances of approval, you won't be able to do so with Discover.
• Late fee. Discover may charge a late fee of up to $39, so if you're worried about potentially missing a payment, the lender might not be the best choice for you.  

Discover Personal Loan FAQs

Why You Should Trust Us: How We Rated Discover Personal Loans

For our Discover personal loan review, we came up with a numerical score that represents how it compares with other personal loans across several different categories. These categories include loan interest rate, other fees, term lengths, funding speed, customer support, and more.

Each category's weighting is based on its importance to your borrowing experience, with rates and fees weighted more heavily than aspects like customer service.

See more on how we rate personal loans >>

When considering whether Discover is right for you, consider its additional product lines:

• Best Discover Credit Cards
• Discover Student Loan Review
• Discover Bank Review
• Discover Savings Account Review
• Discover CD Rates
• Discover Home Loans Review.

Rebecca Potters

Rebecca Potters is a writer and editor with a background in personal finance, career guidance, e-commerce, and sexual wellness. Her work has been published in The Balance, Spy, Women, Scholastic, Slashfilm, and more.ExperienceRebecca began working in personal finance as an editor at The Balance in 2018, covering accessible budgeting, small businesses, and career guidance.Rebecca returned to personal finance in 2023 with Business Insider after leaving The Balance in 2020 to pursue other ventures. Her passion lies in creating accessible, digestible resources for marginalized communities facing barriers in their financial, mental, and sexual health. She works to maintain and update Business Insider’s personal finance reviews, roundups, and evergreen articles to ensure readers are provided with reliable, trustworthy information and advice.ExpertiseRebecca’s areas of personal finance expertise include: 

• Personal loans
• Student loans
• Banking 
• Savings
• Credit
• Budgeting

EducationRebecca is a graduate of McGill University, where she pursued a degree in English, focusing on how societal actions and pop culture inform one another through a lens of critical theory.

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Elias Shaya

Compliance and Operations Associate

Elias Shaya is a Compliance and Operations Associate on Business Insider's personal finance team in New York. He collaborates with the editorial team to provide timely, accurate, and impartial financial advice to readers ExperienceElias is a point person on multiple personal finance topics, from credit cards to investment products. He ensures editorial content is transparent and accessible through clear and precise language while also complying with regulatory and partner marketing guidelines. Since joining as a compliance fellow in 2022, Elias has played a crucial role in the team’s compliance efforts, ensuring no stone is left unturned. His close attention to detail and broad knowledge of various complex financial subjects help minimize risk for partners while protecting editorial independence so readers get the best possible advice. Expertise: Elias’ expertise includes:

• Credit cards
• Investing
• Loans
• Mortgages

Education: Elias graduated from the College of Staten Island with a degree in International Business.When he’s not reviewing or updating personal finance topics, Elias enjoys traveling, comedy shows, and binge-worthy TV shows.

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