Discover Debt Consolidation Loan – 2021 Review

Discover offers debt consolidation loans of $2,500-$35,000 and has an APR of 5.99-24.99%.   

Pros & Cons

Pros

  • No origination fee or prepayment fees.
  • Direct payment to creditors offered
  • Mobile app offered to manage loan.
  • Payout of loans the next business day.
  • Wide variety of repayment term options.
  • Can be used for a lot of different purposes.

Cons

  • Has a late fee.Discover imposes a $39 late fee for payments that are missed after a three-day grace period.
  • Doesn’t allow co-signing, joint or secured loan options.
  • No discounts for autopay.
  • Low maximum loan amount

Full Review

For customers with outstanding credit, Discover offers unsecured personal loans that can be used for nearly any reason (720 FICO or higher).

The online bank’s application process is quick and entirely digital.

Discover can deposit funds in as little as one business day if the application is approved, and borrowers can manage loan payments through the Discover mobile app.

The autopay discount is not included in Discover’s rates.

However, the lender offers a variety of repayment arrangements, refinancing alternatives, a free monthly credit report, and a 30-day loan guarantee, among other benefits.

Customer Feedback

Customers love the lender’s simple application procedure, rapid approval, and educated customer care team, according to positive Discover personal loans reviews. The online payment calculation and application process, according to satisfied borrowers, make securing a personal loan quick and easy. Discover personal loans have a 4.9-star rating on the Discover website based on these good feedback.

Discover Financial Services, on the other hand, has a 1.7-star rating on Trustpilot, with the majority of the negative feedback coming from banking and credit card consumers. Although Discover Financial Services’ Better Business Bureau (BBB) ratings are low (1.24 stars), the company has been accredited by the BBB since 1989 and has an A+ rating. Customers who are dissatisfied with their service continue to complain about closed accounts and fraudulent lending methods. Many of the BBB reviews, like those on Trustpilot, appear to be about other financial products.

Where Discover stands out from the crowd

Discover will deliver loan funds straight to your creditors within one business day after you apply and are authorized.

Customer service: Discover offers a staff of loan specialists situated in the United States who are available to answer issues seven days a week during extended work hours.

Customers can also get free financial education online, such as information on managing debt and using a personal loan to finance important expenses. 

Discover offers a 30-day money-back guarantee, which means that clients can return loan funds for any reason during that time frame and pay no interest.

Requests to cancel your loan must be made in writing, mailed, and accompanied by a cheque for the loan amount.

If you use your loan to pay your creditors directly, you won’t be able to get the money back once it’s been transferred.

Customers receive a free FICO scorecard every month from Discover, which shows credit use, missed payments, inquiries, credit length, and total accounts.

This might assist you in keeping track of your credit score and tracking changes as you pay off your debt.

Borrowers can refinance an existing personal loan with a Discover loan, whether it’s through Discover or another lender.

You might save money on interest and pay off your debt faster if you qualify for a lower rate.

Size of loans.
In all 50 states, Discover offers unsecured personal loans ranging from $2,500 to $35,000.

Conditions of the loan
Personal loans from Discover are offered for 36, 48, 60, 72, and 84 months.


Loan Fees

Discover offers personal loans with annual percentage rates (APRs) ranging from 5.99 percent to 24.99 percent, with the lowest rates reserved for the best borrowers. Overall, rates are determined by a number of factors such as credit history, application information, and loan length. *All rates are current as of October 27, 2021.

Rate reductions are available.Borrowers who sign up for automated payments do not receive a discount from Discover. Other lenders often provide autopay savings of 0.25 percent to 0.5 percent off the normal APR.

Origination fees.
There are no closing charges or origination fees with Discover.

Early payment fees.
Customers that pay with Discover do not have to incur a penalty if they pay early.This allows borrowers to pay off their loans before the end of their term without paying additional fees.

Fees for late payments.
While Discover does not charge borrowers any other fees, if a payment is not received by the due date, Discover may incur a $39 late fee.

Benefits and Features

Money-back guarantee for 30 days.
On personal loans, Discover offers a 30-day money-back guarantee.If borrowers decide they don’t want their Discover loan within 30 days of funding, they can return all loan funds and cancel the loan. Borrowers who use this assurance will not be charged any interest. Keep in mind that the benefit does not apply to cash paid directly to creditors.

Creditors are paid directly.
Credit cards and other types of debt can be consolidated with Discover personal loans. Rather than placing loan cash into your own bank account, Discover will pay off each account immediately.

Payment flexibility
Discover allows customers to adjust their payment due date to better fit their budget, in addition to offering flexible repayment periods.Customers can adjust their payment date twice during the loan’s term as long as the interval between modifications is at least one year.

Scorecard for credit.
Discover offers a free Credit Scorecard that provides a monthly update of your FICO credit score, as well as information on credit use, recent inquiries, and missed payments.

How do I qualify for a Discover loan?

Discover does not reveal many borrower requirements, but when considering an application, it looks at credit history, current credit actions, and credit queries, according to the lender.

Here’s everything you’ll need to get started:

-The minimum credit score is 720, while the average credit score for borrowers is 750.
-You must be a citizen or permanent resident of the United States.
-You must be at least 18 years old to participate.
-A minimum household income of $40,000 is required.

What Are the Requirements for a Discover Personal Loan?

A variety of criteria influence whether or not a personal loan application is granted. Underwriting standards vary per lender, but they often include information from an applicant’s credit record as well as other elements that reflect the ability to repay the loan, such as income. Although meeting the standards listed below does not guarantee approval, they can assist you in determining whether a personal loan is the perfect fit for you.

Requirements for Credit Scores
Discover considers information from credit agencies, such as the applicant’s credit history, recent credit activity, and recent credit inquiries, when determining borrower eligibility.However, to be qualified for a Discover personal loan, applicants must have a minimum FICO credit score of 660.Discover borrowers have an average credit score of around 750.

Requirements for Income
To be considered for a Discover personal loan, you must have a family income of at least $25,000 per year.Even if your salary meets Discover’s minimum requirements, you should assess whether you have capacity in your budget for another monthly payment before taking on more debt.

Co-applicants and co-signers
Individuals are the only ones who can get a Discover personal loan. As a result, co-borrowers and co-signers are out.

How to Get a Personal Loan from Discover

Prequalifying for a personal loan, completing a formal application, and waiting for loan approval are all common steps in the process.

To apply for a Discover personal loan, follow these steps:

Calculate your monthly payments.
Use Discover’s loan payment calculator if you need to borrow money but aren’t sure if you’ll be able to make another monthly payment.When you enter your ideal loan amount, preferred loan duration, and credit score range, the calculator will calculate an expected monthly payment range as well as an anticipated annual percentage rate (APR). 

Prequalify.
When applying for a personal loan, Discover’s online prequalification procedure allows you to see the real rate you’ll qualify for.Prequalifying for a Discover personal loan has no effect on your credit score and is a convenient method to compare available rates with those offered by other lenders.

Fill out the application completely.
Complete the full application procedure online if you’re happy with the rate you got during prequalification.This will necessitate a hard credit check, as well as the submission of employment, income, and bank account information. As part of the application procedure, debt consolidation consumers must also give third-party creditor account numbers and balances.

Wait for approval.
Following the submission of your application, a loan specialist will analyze it and contact you if any more questions arise.You can also check the status of your application via Discover’s online portal.If you complete your application correctly, you will most likely receive a decision the same day.

Sign the loan contract.
Discover will give you the terms of your loan once you’ve been accepted.
Accept the terms, sign the loan agreement, and wait for the money to arrive.

Obtain finances.
Funds from a Discover personal loan might be disbursed as soon as the next business day.
The fundraising process, on the other hand, can take up to seven days, especially if you chose to collect the money by check.Discover will pay your third-party creditors directly if you consolidate your debts.

Make the necessary payments.
Begin making payments according to the terms of your loan after your money have been disbursed. Automatic payments, as well as payments made through the online account center, phone, mail, wire transfer, and electronic bill pay through a bank, are all options. Customers have the option of changing their payment due date twice during the loan’s term.


When Will I Get My Money?

In most circumstances, Discover makes a financing decision the same day. If there are no typos or errors in the application and the loan is funded on a weekday, monies may be disbursed as soon as the next business day after approval. If these requirements aren’t met—or if you request payment by check—funding could take up to seven days.