A Discover personal loan is an unsecured loan of $2,500 to $40,000 that borrowers can use for debt consolidation, home repairs, medical bills and most other personal expenses, with rates currently ranging from 7.99% to 24.99% APR depending on credit and other underwriting factors.
At a Glance
- Loan amounts run from $2,500 to $40,000 with repayment terms of 36 to 84 months.
- Discover charges no origination fee and no late fee, and funding can arrive as soon as one business day after approval.
- A recommended minimum credit score of 660 and minimum annual income of $25,000 apply to individual or household applicants.
- Borrowers get a 30 day window to cancel the loan penalty free if they change their mind.
- There is no option to add a co-signer or co-applicant, and the maximum loan size is lower than some competitors offer.
How Discover Personal Loans Work
Discover, the Illinois based company best known for its credit cards, has offered personal loans nationwide, in all 50 states and Washington, D.C., since expanding beyond its card business. These loans are unsecured, meaning applicants don't pledge a car, home or savings account as collateral. Instead, Discover bases approval and pricing on credit history, income and debt to income ratio.
Borrowers can check potential rates by prequalifying online or by phone, a step that doesn't affect credit scores or leave an inquiry on a credit report. Once someone accepts an offer and completes the full application, Discover can render a decision the same day, assuming there's no missing paperwork. Applications submitted on a weekend typically wait until the next business day for a decision.
Rates, Fees and Loan Terms
Discover's APR range sits between 7.99% and 24.99%, and the lender charges no origination fee and no late fee, a combination that sets it apart from many competitors that build fees into the cost of borrowing. Repayment terms stretch from three years to seven years, giving borrowers some room to balance a lower monthly payment against paying less interest over time.
| Feature | Detail |
|---|---|
| APR Range | 7.99% to 24.99% |
| Loan Amount | $2,500 to $40,000 |
| Loan Terms | 36 to 84 months |
| Recommended Minimum Credit Score | 660 |
| Average Origination Fee | 0.00% |
| Late Fee | $0 |
One notable gap: Discover doesn't offer interest rate discounts. Some lenders shave a fraction of a point off the rate for existing customers or for borrowers who enroll in automatic payments. Discover skips that entirely, so the rate quoted during prequalification is generally the rate offered.
What the Money Can and Cannot Be Used For
Borrowers can put a Discover personal loan toward debt consolidation, home improvement projects, hospital bills, wedding costs, vacation expenses, auto repairs, small business costs, veterinary bills, financial emergencies, adoption expenses or IVF costs. Industry survey data from Investopedia's 2023 Personal Loan Borrower survey found debt consolidation to be the most frequently cited reason borrowers take out a personal loan, followed by home improvements and other large purchases.
There are limits, though. Discover won't let borrowers use the loan for higher education expenses, to pay off secured debt such as a mortgage or auto loan, or to pay down a Discover credit card. Anyone consolidating debt with this loan can only fold in unsecured balances, credit cards and similar debt, not anything backed by collateral.
Who Qualifies
Discover recommends a minimum credit score of 660, which FICO classifies as