Although using credit to get what you want is convenient, the expense adds up quickly when you can’t pay your balances in full each month, which can leave you wondering how to get out of debt. One option for relief is a debt consolidation loan. The best personal loans for credit card debt consolidation can offer lower rates than your current credit card company charges, which can help you pay off your credit card debt more quickly.
A Discover personal loan can serve as a cornerstone of your debt management plan if you can get the right rate. Additionally, the company goes a step further and offers financial education to help teach you how to pay off debt. Find out more to decide if a personal loan is right for you.
Here’s a look at the various features and benefits offered by Discover personal loans:
|Discover Personal Loans Features and Benefits|
|Loan Amounts||$2,500 to $35,000|
|Loan Terms||36, 48, 60, 72 or 84 months|
|APR||6.99% to 24.99%|
|Time to Receive Funds||As early as the next business day|
|Min. Credit Score||No stated minimum; higher scores trigger lower rates|
|Secured or Unsecured||Unsecured|
Review of Discover Personal Loans
A Discover personal loan is not the same product for every applicant. Varying terms, loan amounts and interest rates make each application unique. Before you apply, review whether the product makes sense for your financial situation, especially if you intend to use the loan for paying off debt.
Discover Personal Loan Rates
Discover offers personal loans with rates that vary based on an individual’s credit and financial history. The stronger your credit score, the lower rate you can anticipate getting, whether you’re banking with Discover or another financial services firm. Currently, Discover offers personal unsecured loans with fixed rates between 6.99 and 24.99% APR, which can vary from small loans — as little as $2,500 — up to large loans, topping out at $35,000.
Discover Loan Repayment Terms
Discover offers flexible repayment terms of 36, 48, 60, 72 or 84 months; you can choose the duration of your loan at the time you apply. Discover does not charge any prepayment penalties, which allows you the freedom of making extra payments or paying off the entire loan at any time. And, if you decide the loan isn’t right for you, simply return the funds within the first 30 days, and you’ll owe nothing.
Discover Loan Fees and Penalties
Although competitors such as LendingTree or Prosper charge up to 5 percent in loan origination fees, Discover doesn’t assess borrowers a fee for taking out a loan. With Discover, you’ll pay just the normal interest charges as long as you make your payments on time. Late payments are subject to a $39 fee.
Related: Loan Origination Fees Explained
How to Apply for Discover Personal Loans
Discover has a simple loan application process that you can complete entirely online. Here are the basic steps to apply for a Discover personal loan:
- Determine the amount of the loan and the desired term for payback.
- Gather all of the necessary financial information, which includes your income, employment information and bank details. You’ll also need to provide account numbers, payoff amounts and payment addresses if you choose to have the bank pay off your creditors as part of a debt consolidation loan.
- Visit the loan application site or call a banker directly at 1-866-248-1255 to get started.
- Click “Start Now” if you’re trying to apply online to see if you qualify for a loan; this process has no effect on your credit score.
- Review your offer, and click “Accept” if you approve; note that a loan specialist might call you to confirm the details of your application.
- Upon approval, which can happen the same day, receive your funds or have them sent directly to creditors if you’re using the loan for debt consolidation.
- A Welcome Kit will be mailed to you after the completion of the process.
Note that if you state that you will use the funds for debt consolidation during the application process, Discover will require that at least 70 percent of your loan amount be sent directly to your creditors.
Advantages and Disadvantages of Discover Personal Loans
Discover personal loans offer clear advantages and disadvantages. On the plus side, Discover offers flexible repayment terms, one convenient monthly payment, zero origination fees, a limited money-back guarantee, no prepayment penalties, a simple application process and a 100 percent U.S.-based loan team.
On the downside, interest rates can run as high as 24.99 percent. You’ll also face a possible $39 late fee for missed payments.
For most consumers, Discover personal loans can be a good option for debt consolidation or other expenses. The entire process is very customer-focused, and fees are kept to a minimum. Borrowers with less-than-average credit, however, might have to pay higher than average interest charges.