Discover is more than just credit cards. It also offers a few loan products — whether you need to pay for school, borrow against your home or cover a personal expense. But with quite a few negative reviews out there, you’ll want to consider its customer service before applying.
Unlike some major banks, you won’t find mortgages and auto loans among the list of products Discover offers. Instead, it narrows its playing field down to three options:
Personal loans
You can borrow between $2,500 and $40,000 with fixed rates from 7.99% to 24.99% APR. Discover offers terms from three to seven years, and it even has a 30-day return policy in case you decide you don’t need the loan afterall. You can use it for just about anything, except to pay for a secured loan or for post-secondary education expenses. That’s what its student loans are for.
Discover personal loans review
Discover offers a variety of student loan options, including loans for undergraduate and graduate school, MBA programs, law and medical school, bar exam costs and residency. And if you’re interested in refinancing your federal and private student debt, you can do that too.
Its standard undergraduate student loans start at $1,000 and go all the way up to 100% of your school-certified cost of attendance. You have the option of fixed rates or variable rates. However, it only offers one repayment term: 15 years for all its undergraduate student loans.
You can borrow anywhere from 35000 to 300000 depending on the equity you own in your home. Rates are fixed and depend on whether you’ve paid off your mortgage or not. Loans in the first-lien positionmore info button come with rates that vary from 4.99% to 8.99% APR. Meanwhile, loans in the second-lien positionmore info button have the potential to go slightly higher, ranging from 4.99% to 11.99% APR. Discover offers a wide range of loan terms to choose from: 10, 12, 15, 20 or 30 years.
From its fast turnaround to its limited fees, there are a few perks of borrowing with Discover:
Discover doesn’t fare well when it comes to customer reviews, and you don’t have as many loan options to choose from as other providers out there. Consider these potential drawbacks before applying:
Explore your personal loan options.
Discover doesn’t charge origination fees or prepayment penalties for its loan products. This means the APR will be the same as your interest rate. And since interest rates are fixed with its personal and home equity loans, you can expect to have the same monthly payment for the life of your loan.
If you do make a late payment, you’ll be assessed a fee of $39. Discover may charge other fees, such as a nonsufficient funds (NSF) fees, which should be listed on your loan contract.
Discover is accredited with the Better Business Bureau (BBB) and earns an A+ rating as of August 2021. However, this is based on factors like transparency and time in business — not customer reviews. Nearly 1,169 people have filed complaints against the company with the BBB, and it scores an average 1.2 out of 5 stars based on over 215 customer reviews.
It fares slightly better on Trustpilot, but only because less than 15 customers have left feedback. One person specifically mentioned troubles with a loan account, while others focused on Discover’s credit card options.
Most of the negative reviews had a similar theme: Discover didn’t send notifications about issues with an account and refused to fix mistakes, even when it caused them. Before applying for a loan, you might want to take the time to call customer service and see what kind of response you get. This can be an indication of how the company will treat you if you were to borrow from them.
In J.D. Power’s 2018 credit card satisfaction study, Discover was ranked highest among credit card issuers. Although this study didn’t include its loan products, it demonstrates that customers like Discover’s perks overall.
Generally, yes — though no online company can 100% guarantee your information will stay safe. Discover does its part by encrypting your personal details with industry-standard SSL technology to protect your account from fraud. You can also view Discover’s privacy policy for each of its loan products to see how your personal information is used and what’s shared with affiliates.
Depending on what type of loan you’re applying for, you can call Discover at one of the numbers listed below to limit what details are shared:
Decide a Discover loan is right for you? You have the option of applying online or by phone.
To get started on the online application, follow these steps:
If approved, read through the terms and conditions of the loan, and then sign your loan documents. Your funds will either be transferred to you, your college or your creditors — depending on the type of loan you applied for.
Make sure you have this information on hand to speed up the process:
Depending on the type of loan you’re applying for, you may need to provide additional documentation — like proof of identity, address or income.
Unlike its other loan options, Discover doesn’t have any set guidelines beyond having a minimum household income of $25,000. It bases its loan decision on your income, credit history, debt-to-income (DTI) ratio and a variety of other factors.
You can apply for preapproval to see if you qualify without impacting your credit score.
For a loan that covers the cost of your college expenses, you must be:
If you don’t meet Discover’s minimum requirements, you can also apply with a creditworthy cosigner who’s at least 18 years old and a US citizen or permanent resident.
If you’re looking for a residency or bar exam loan, Discover requires that you graduated in the past six to 12 months or are currently in your final year of study.
Although approval is based on a variety of factors, Discover offers a few criteria for potential applicants. You must have:
Founded in 1985 by Sears, Discover isn’t the oldest financial institution in the world, but that hasn’t stopped it from becoming a big name in the industry. It got its start by offering credit cards to consumers. In 2013, it was the first major credit card issuer to provide cardmembers free access to their FICO scores directly on their monthly statements. Over the years, the company has grown to offer a slew of banking and loan products to customers as well. It also has an informative financial education center on its website, which provides tips and tools to help customers plan for the future and become financially fit.
Whether you’re looking to pay for college or a major personal expense, Discover offers a few loan products to help. They all come with minimal fees and a relatively fast turnaround, which makes it a competitive option when comparing providers. However, you’ll need to look elsewhere if you’re interested in applying for a mortgage, personal line of credit or auto loan.
Want to see how Discover stacks up to the competition? Check out our guide to personal loans, browse our page on student loans or read more about home equity loans.
Personal loans can be used for just about any legitimate purpose, including vacations, weddings, home improvements or debt consolidation. The only two exceptions Discover makes for its personal loan products are they cant be used to pay back a secured loan or for post-secondary education expenses — that’s what its student loans are for.
Yes. You can enroll in Discover’s automatic payment program online. But unlike some lenders, Discover doesn’t list an APR discount for taking advantage of this option.
It depends on the loan. You can’t deduct interest for a personal loan. But for student loans and home equity loans, you may be able to deduct a portion of your interest payments from your taxable income. Consult a tax advisor to learn more about what might qualify for deductions.
It depends. Personal loans and student loans don’t require collateral. Home equity loans will put a lien against your house. If you default, Discover may be able to take it as an asset to pay back what you borrowed.
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Do you offer on your personal loans Credit Life and Disability Insurance ?
Hi Sylvia,
Thank you for getting in touch with finder.
As a friendly reminder, while we do not represent any company we feature on our pages, we can offer you general advice.
Discover offers personal loans but not with credit life and disability insurance. They also offer Payment Protection exclusively on their Discover card. Also, Discover card understands that accidents occur, illnesses strike, and people lose their jobs. If you find yourself in a difficult financial situation, you must contact their customer service.
I hope this helps.
Have a great day!
Cheers,
Jeni
Can I get a debt consolidation loan with 3-year credit history and good credit score. I am not a permanent resident of the US
Hi Sai,
Thank you for your inquiry.
Typically, lenders required a permanent US resident to be eligible for debt consolidation. We do have a guide that will help you learn more about debt consolidation.
On the other hand, since you are not a permanent resident in the US, you may also want to consider the loans for non-residents in the US.
I hope this information has helped.
Cheers,
Harold