Discover Personal Loans Review (May 2024)

MarketWatch Guides Rating: 4.6 out of 5 stars

We rated Discover a 4.6 out of 5 stars after researching and comparing over 20 lenders based on various factors including loan amounts, customer experience, fees, repayment terms, annual percentage rate (APR) range, minimum credit score requirement and company reputation.

Discover ranked high in several categories like APR range, funding speed, customer experience, no origination fees and available repayment terms. However, it scored low in other areas, including maximum loan amount and minimum credit score.

Discover loans offer quick funding and flexible loan terms, but there are a few potential cons, like no option to apply with a co-applicant.

Discover loans might be a good option for borrowers seeking small- to medium-sized loans since loan amounts range from $2,500 to $40,000. It may also be an excellent choice if you need to consolidate debt, as Discover can send funds directly to your creditors.

On the other hand, Discover is not the best choice for consumers who want to apply for a loan with a co-borrower or co-signer. Also, it’s not the best option if you have bad credit since most approved applicants have FICO scores that are at least 660.

Take these steps to apply for a Discover loan.

Application process

Start the process by completing the prequalification application on Discover’s website. You’ll need to provide information including your desired loan amount, loan purpose and loan term, name and address, annual income and monthly housing payment. Filling out and submitting this application takes just a few minutes.

Approval and Funding

Once you submit a loan application, Discover generally lets you know if you’re approved or denied on the same day. After you sign the loan agreement, Discover can deposit funds into your account as early as the next business day.

Discover Financial Services has mostly negative customer reviews on Trustpilot and Better Business Bureau (BBB) review websites. However, remember that customer reviews are not just about Discover’s personal loans, but include its credit cards, student loans, home equity loans and other financial products.

Negative reviews mention not getting approved despite having good credit or not receiving what they believe is a fair rate. On the flipside, positive reviews praise Discover’s personal loan application process.

Here are some of its latest customer service reviews.

“Applied for a personal loan. I have no debt except a reasonable car payment – and a credit score of 827. I was turned down for a loan and their reasons were completely ridiculous. The process took DAYS. [N]ot next day as they advertise. Multiple calls from people who apparently have no idea what they are doing. Now I have a hard credit pull from this scam of a company. DO NOT do business with them. *update – I got a Lightstream loan”

— DeeDee, July 16, 2023, Trustpilot 

“I have had two loans from this company easy process and a fair rate.”

— Kent Sajack, Sept. 7, 2023, Trustpilot 

“Per their website calculator I applied for a personal loan on 2/3/2023. See screenshot with my circumstances, I entered the amount I need, the length of time I needed and my credit score. [T]hey offered *****% APR, so i went ahead and provided all my personal information and was told that my APR was 14%. I have an 855 credit score and very decent income, pay my CC on time and in full. I believe they either false advertise or discriminate. Then when I told them I was not interested and [to] please remove all my personal information from their website, [their] staff said she was not able [to] and that I might be receiving advertising from other companies.”

— Claudia B, Jan. 3, 2022, Better Business Bureau

In response, a Discover spokeswoman said the company cannot comment on individual cases. However, she pointed out that the lender considers more than just credit score when determining rates.

“There are multiple factors that go into determining interest rates and loan acceptance,” spokeswoman Sarah Grage Silberman wrote in an email. “Factors include full credit history, terms of the loan requested, and verification of information provided by the consumer in the application.”

When you apply for a Discover loan, the lender considers many factors, including your credit history, credit score, income and debt-to-income ratio (DTI).

Credit Score and Financial History

Discover doesn’t disclose its minimum credit score requirement. However, most applicants Discover approved in 2022 had credit scores of 660 or higher, according to its most recent 10-K report. Also, Discover only offers its lowest advertised rates to consumers with excellent credit.

If you don’t need funds immediately and want to apply for a loan with Discover, it may make sense to improve your credit first.

Income and Employment

Discover’s minimum income requirement is $25,000, and the company doesn’t list any specific employment criteria on its website.

Discover personal loans are primarily designed to help consumers consolidate debt, according to its latest 10-K report.

But funds can be used for just about any purpose, including:

• Vacations
• Home renovations
• Car repairs
• Moving expenses
• Medical bills
• Emergencies 
• Taxes

That said, Discover restricts applicants from using funds for post-secondary education expenses, paying off a secured loan and refinancing Discover credit card debt.

While comparing your options, it’s crucial to understand the fees a lender charges because they can increase your overall borrowing costs.

Loan Origination Fees

Discover won’t charge you an origination fee for processing your loan application.

Early Repayment Penalties

You can make extra payments on your Discover loan without worrying about a prepayment penalty. Not having to pay this fee gives you the flexibility you pay off your loan early and save on interest.

Late Fees

If your monthly payment becomes past due, Discover may charge you a late fee of $39.

To find the personal loan that is most suitable for your needs, compare loan amounts, rates and fees from as many lenders as possible. Here’s how Discover compares against some other popular options.

Discover could be a good choice if you’re looking for an online lender with quick funding, has a competitive APR range, minimal fees, and one of the best savings accounts. But there are some potential cons to consider, like a low maximum loan amount compared to other lenders, no joint loan applications and a $39 late fee. 

To assess whether Discover offers the best personal loan for you, remember to compare its eligibility requirements, rates and loan amounts against other lenders.

Our team put together a comprehensive 100-point rating system to evaluate personal loan companies. We gathered data points from 28 of the most prominent lenders in the US and analyzed disclosures, licensing documents, sample loan agreements, marketing materials and websites. Our rating system takes into account four broad categories.

• Affordability (35%): How expensive each company’s loans are to pay back. 
• Loan features (35%): The breadth of loan terms and features available to prospective customers.
• Customer experience (20%): Ease of application, prequalification and customer service interactions. 
• Company reputation (10%): An exploration of lenders’ Better Business Bureau files, customer reviews and outstanding regulatory actions. 

Our top-rated lenders may not be the best fit for all borrowers. To learn more, read our full personal loans methodology.

Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.