Discover Personal Loans Review

Pros

• Financing is available to qualified startups
• No extra fees
• No prepayment penalties
• Funds are disbursed quickly
• Fast and easy application process

Cons

• High credit score requirements
• Low borrowing limits

What Are Discover Personal Loans?

While most known for its credit card services, Discover offers personal loans to borrowers with good credit and who have a robust financial history.

Discover deals in unsecured installment loans. These loans are marketed as a means by which consumers can pay down their debt, as Discover can send funds directly to your creditors on your behalf. (The company also offers free debt management tools.) However, Discover’s personal loans can be used for a variety of purposes, including funding a start-up business.

Read on to find out if Discover Personal Loans are a good fit for you.

Services Offered By Discover Personal Loans

Discover Personal Loans offers personal loans up to $40,000. While these loans can be used for personal expenses, funds can also be used to start a business, cover financial emergencies, or consolidate high-interest debt. 

After you receive a Discover Personal Loan, you can easily manage your account through the Discover website or mobile apps for Android and iOS.

Borrower Qualifications

The requirements for getting a Discover personal loan are as follows:

To be eligible for a Discover personal loan, you must be 18 years of age or older and a US citizen or permanent resident. Because this is a personal loan, there are no time in business or revenue requirements. However, you must have a minimum household income of $25,000. Funding is available in all 50 states.

Whether you get approved for a personal loan is entirely up to Discover’s assessment of your personal creditworthiness, which includes your credit score and history, debt-to-income ratio, and other factors.

Rates & Fees

These are the terms and fees for Discover Personal Loans:

One of the things we like the most about Discover Personal Loans is the flexible repayment terms — other online lenders typically offer term lengths of up to five years only. And with Discover, you choose your term length.

Discover does not charge any origination fees, closing costs, or prepayment fees. Should you decide to pay your loan back early, you’re free to do so, and you won’t be penalized for it. A fee will be charged for late payments, but Discover gives you the option of setting up automatic payments if you don’t want to worry about this extra charge.

No fees, flexible payment terms, and transparency surrounding them are refreshing to see from a lender. We did take off a few points due to the low borrowing limits. However, it’s worth noting that this is pretty standard for personal loans.

Application Process

The application process for Discover Personal Loans is completely online. To apply for a loan, go to the Discover Personal Loans homepage and enter your desired loan amount, the purpose of your loan, and your credit score range.

You’ll then get a rough estimate of your monthly payments depending on the term of your loan, along with an APR slider, so you can see payment estimates based on different APRs.

If you like what you see, you can formally apply for the loan by entering your personal and financial information. Discover will then perform a hard credit check (which will have a slight effect on your credit score). Assuming you filled out the application correctly, you should find out if you qualify on the same day. If you do, you’ll receive a call from a loan specialist to verify your identity and finalize the offer.

Once you’ve signed the loan agreement, you should receive the funds in your bank account the next business day.

The process is quick, easy, and painless — and we appreciate that you can have an idea of the cost of your loan before entering any personal information.

Sales & Advertising Transparency

The Discover Personal Loans website contains a good deal of information about Discover’s loan products and the loan application process. There’s an extensive FAQ and numerous articles about consolidating debt, financing life events, and the like.

Rates, terms, fees, and other information are easy to find — a rarity in the world of lending. In addition to the information on its website, you can also find more information through Discover’s social media accounts.

Customer Service & Technical Support

Customer service is available via phone 8 AM – 11 PM ET, Monday through Friday, and 9 AM – 6 PM ET on Saturday and Sunday. A live chat option is also available.

Discover also provides plenty of information online, so you may not even need to speak to a live person. FAQs, a help center, a company blog, and social media profiles on Facebook, LinkedIn, and X/Twitter are available.

Most users are pleased with the quality of support they receive.

User Reviews

User reviews are mixed across the board, but it’s important to remember that most review sites encompass all of Discover’s products — including credit cards — and aren’t solely focused on personal loans.

When looking specifically at Discover Personal Loans, the reviews are quite good. On its website, the product gets 4.9 out of 5 stars (based on 30,000+ reviews), but receives a much lower score of 1.2 on ConsumerAffairs, although this rating is based on a mere 35 reviews.

Negative Reviews & Complaints

While negative reviews are pretty sparse, some customers complained about:

• Poor customer service
• Higher interest rates than expected
• Issues with making payments online

Positive Reviews & Testimonials

Most professional reviewers and many customers have found Discover Personal Loans worthy of praise. Aspects of the service that have received the most compliments include:

• A quick and simple application process
• Rapid approval process
• No origination/prepayment/closing fees
• Competitive rates
• A great loan choice for people with good credit

Reviewers have given Discover particular plaudits for its debt consolidation services.

Final Verdict: Are Discover Personal Loans Worth It?

Considering the near-total lack of user fees, competitive rates, and the quick and relatively painless application and approval processes, borrowers with good credit would do well to consider Discover Personal Loans as a source of funding for their business start-up. For a large company, the lending and customer service practices are quite sound, and you won’t be nickel-and-dimed to death with needless fees.

There’s a lot to like about Discover Personal Loans, which is reflected in our overall score of 4.4 out of 5 stars.

However, these loans aren’t a good match for everyone. Businesses that need more than $40,000 will want to shop their options, while borrowers with poor credit won’t meet Discover’s requirements.

Whether you qualify or not, always make sure to comparison shop when searching for a loan for your business. Like Discover, many other lenders give you pre-qualification estimates, which can be obtained without affecting your credit score. Do your due diligence to see which lender will offer you the best rates and terms before making a commitment.