Discover personal loans: Good for debt consolidation

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In a Nutshell

Discover personal loans stand out for offering direct payments for debt consolidation and no origination fees. Plus, you may be able to receive funding quickly with the lender’s online process.

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Updated March 5, 2021

This date may not reflect recent changes in individual terms.

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Written by: Jackie Lam


  • Direct payments for debt consolidation available
  • No origination fee
  • May receive funding quickly


  • Charges a late fee
  • No co-applicants allowed

What you need to know about a Discover personal loan

Probably most well-known for being a major credit card brand, Discover also offers personal loans online. Loan amounts range from $2,500 to $35,000, with repayment terms of three to seven years.

Here’s what to consider if you’re thinking about applying for a personal loan from Discover.

Direct payments for debt consolidation

One of the major draws of a Discover personal loan is that if you’re consolidating your debts, Discover can handle direct payments on your behalf. You can consolidate debt, like your credit card balances, but secured debt — like a mortgage or car loan — can’t be consolidated with a Discover personal loan.

The process is relatively straightforward and simple. During the application process, you list the accounts you’d like Discover to take care of and provide basic account info (account numbers, repayment amounts, payment addresses). Discover will handle the rest.

No origination fee

Origination fees on personal loans can eat into your loan proceeds. Depending on your loan amount, Discover’s no-origination fees policy can save you a solid chunk of change.

If you don’t want to get walloped by fees, Discover could be a good place to look for a personal loan.

Fast funding is possible

Once your application has been approved, Discover says it can make payments to your creditors as soon as the next business day. For the funds to drop quickly into your personal account, your loan application has to be free of errors, the loan must funded Monday through Friday, and you have to opt into having the funds disbursed into a checking or savings account. If any of these three criteria aren’t checked off, it could take up to seven days to receive your loans.

Plus, keep in mind that the exact timing of when you receive your funds depends on your bank.

If you hope to receive funds quickly, carefully comb through your application to make sure everything is filled out accurately, double check your bank account numbers, and include an email address in case there are any questions about your application.

Late fees might be charged

While Discover has no origination fee, if you have trouble making an on-time payment on your loan, you may get dinged with a $39 late fee. 

If you face a temporary financial hardship, Discover does have repayment assistance programs that might be able to offer you options to help alleviate that stress.

Generally speaking, you can avoid late fees if your monthly payments are manageable. When you apply for a personal loan and sign up for a term and amount, make sure you do the math and assess whether you can comfortably afford to take out a loan. If you suspect you might feel stretched, it’s probably a good idea to rethink the loan amount.

A closer look at Discover personal loans  

If you’re mulling over whether to get a personal loan from Discover, here some other details to think about.

  • Minimum age — To qualify for a loan from Discover, you must be at least 18 years of age and a U.S. citizen or permanent resident.
  • Income requirements — You’ll also need to have a minimum household income of at least $25,000 to be eligible for a loan.
  • No prepayment penalties — If you pay off your loan ahead of schedule, you won’t get hit with prepayment penalties.
  • No co-signers allowed — Discover doesn’t permit co-applicants on your personal loan. If you want to apply with another person, take a look at lenders that allow co-signers.
  • 30-day guarantee — If your financial circumstances shift or you change your mind, Discover offers a 30-day guarantee. You can return the entire amount of the loan. You won’t be charged any interest.

Who is a Discover loan good for?

Since Discover can handle payments to creditors for you, a Discover personal loan is a solid option for debt consolidation. It also may be a good fit if you need funds quickly.

Keep in mind that the better your credit, the better terms and rates you’ll probably be able to qualify for. Discover’s personal loan rates are competitive, but you’ll likely need at least fair credit to qualify.

And remember if you think you’ll need a co-signer to be approved for a loan, you’ll have to consider other options.

How to apply for a Discover personal loan

If you are at least 18 years of age, are a U.S. citizen or permanent resident, and have an annual household income of at least $25,000, you may qualify for a Discover personal loan. (But keep in mind that these are only minimum qualifications.)

Discover’s personal loan application can be completed online, over the phone or by mail if you’re responding to a mailed invitation. To start your personal loan application, you can apply for prequalification to check your potential rate, which won’t affect your credit scores.

If you go forward with an official application, you’ll face a hard credit inquiry and your terms and final rate may differ from your estimate.

You’ll be asked to provide some personal information to complete your application, including the following:

  • Employment history
  • Household income
  • Details about your creditors, such as balances and account numbers
  • Bank account numbers

To speed up the process and minimize errors, you’ll want to have this information on hand when you apply. 

Not sure if a Discover personal loan is right for you? Consider these alternatives.

  • Marcus by Goldman Sachs: This online lender also offers direct payments for debt consolidation.
  • Payoff: Payoff, which is geared toward people who want to pay off credit card debt, offers a prequalification option.

About the author: Jackie Lam is an L.A.-based money writer who is passionate about helping creatives with their finances and cultivating community among entrepreneurs. Her clients include Fortune 500 comp… Read more.