One of the best features of using Discover’s Personal Loans is the ability to help manage your debt as well as estimate monthly payments via their online website. “Americans who are struggling to pay down debt are at the core of Discover’s personal loans business,” says Dan Matysik, vice president of Discover’s personal loan department. Although the minimum requirement is $25,000 for borrowers, most make much more. Not only does Discover not charge an origination fee, but also allows flexible payment options such as:
- No interest charge for borrowers who return the full loan amount within 30 days
- Flexible options for payments to avoid late fees for delayed or miss payments
- The ability to change payment due dates twice a year
Along with Discover, Wells Fargo and Freedom Plus also offer great debt pay off options while giving free credit score access to borrowers. In addition to flexible payment options, Discover offers borrowers to pay by check, over the phone, and many other ways in addition to sending payments online.
How to Apply for a Discover Loan
- On the Discover website, applicants can enter their wanted loan amount and their credit score range. This will provide them with a rough estimate of their potential APR and monthly repayment. This process will not require a hard credit check and will not affect your score. If you decide to apply, then you will need to undergo a hard credit check, which does affect your score.
- Once you are approved, you will receive a phone call to verify your identity. Then, the loan will be issued.
- Be sure to repay your loan on time every time. Discover reports to all three credit bureaus, so doing so can help you build your credit score.
Minimum Requirements for a Discover Loan
Min credit score required: 660
Average credit score: 750
Min credit history: Not provided
Min gross income required: $25,000, but most borrowers earn much higher
Max debt-to-income ratio: Not provided
APR: 6.99 – 24.99%
Min. loan amount: $2,500
Max. loan amount: $35,000
Time to receive funds: From one to seven days
Minimum loan duration: Three years
Maximum loan duration: Seven years
Discover’s Fees and Penalties
Personal-check processing fee: N/A
Returned payment fee: $39
Late fee: $39
Origination fee: N/A
Prepayment fee: N/A
Before You Take Out a Personal Loan
- Consider all of your other options for debt consolidation. Taking out a personal loan is only one of the many options available to you. Homeowners may be able to get a home equity line of credit. Those with good credit may qualify for a credit card with 0% APR. You should also check for other lenders.
- Look over your credit report and figure out what your strengths are. Your approval and interest rate will depend on more than just your credit score. They will also take into account your income, the length of your credit history, and your other debts. A low credit score paired with a high income can work in your favor whereas a great score paired with a high debt will work against you.
- Do your research. Find out just how personal loans work. Lenders will all ask you for personal information in order to check your credit and verify your identity and income. Though they ask for the same info, lenders all have different ways of assessing you.
- Calculate repayment scenarios. Do the calculations with different loan amounts and interest rates to determine how well they will fit into your monthly budget.
- Make a plan for getting out of debt. A personal loan can let you consolidate your debt, but it is only the first step of your plan. You will need to make a budget that covers expenses and savings.