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Discover Debt Consolidation Loan [2020 Review]

Dan Steadman

Financial Advisor, MoneyBeagle

Discover Debt Consolidation Loan ReviewHaving several loan payments each month can be stressful, and you are likely wondering if a debt consolidation loan can help. With a debt consolidation loan, you can reduce your bills into a single payment, and doing so will make managing your budget that much easier. With so many options from which you can pick, you won’t always know what company to use.

People often turn to Discover when they need help getting their finances under control, and they are usually pleased with the outcome. But you don’t want to make a final decision before doing your research if your objective is to enjoy the best possible results. You are about to learn what you can expect if you get a debt consolidation loan from Discover, and that knowledge will enable you to move forward with confidence.

Interest RateDiscover Debt Consolidation Loan Review

Unless you want to pay more than needed, always check the interest rate of any company before you decide to enlist its services. Some banks will charge up to 36%  for debt consolidation loan rates, which could be more than you are currently paying. Depending on your credit score, Discover will only charge between 6 and 24 %. If this rate is less than what your current bank is charging, then it might be time to make the switch.

Loan Duration

The duration of a loan is an important factor that you won’t want to overlook, and long-term loans will allow you to enjoy a lower monthly payment. With a debt consolidation loan from Discover, you will have up to seven years to repay your debt, but the duration that you choose will depend on your current budget.

Some people like to have seven years if needed, but they can still opt to repay the funds early. Discover offers more flexibility than some of the other financial companies, and taking this fact into consideration is vital for anyone who wants to get a good deal.

Required Credit Score

When it comes to borrowing money, some people forget to check their credit score before they start the paperwork, and this error can cause them to waste time. A bank will require you to have a certain credit score before they will extend a loan to you, and keeping this in mind is a smart move.

Those who would like to get a debt consolidation loan from Discover must have a credit score of 650. So as long as you have an average rating, you should not encounter any problems getting an approval. On the other hand, if your credit score is not the best, you will want to find other options.

Discovering Discover

Discover personal loans have always been one of the preferred ways to get out of a sticky debt problem, or to prepare for an upcoming big expense. Discover offers an easy and convenient online application procedure. The terms are simple and upfront and are flexible for those who have fair to good credit scores. As mentioned earlier, Discover offers personal loans for debt consolidation and credit card refinancing purposes, but they also cater to borrowers who are planning weddings, vacations, or household improvements.

Borrowers can get as much as $35,000 with flexible repayment terms.  The interest rates range from 6.99% to 24.99%. They also offer terms as long as seven years. For borrowers, this offers convenience and an assurance that they won’t be scrimping on other necessities just because they’re still paying off debts. It ensures that their basic needs are still met while making these repayments on schedules

One good thing about Discover debt consolidation loans is that they can send the payment to your creditor’s directly. This saves you the effort of getting in touch with them and sending different payments. As a result, you’ll only have one payment to keep track of.

In the event that you are able to pay your debt within 30 days, Discover will waive the interest charges from the money you borrowed.

Of course, money is not simply handed over to borrowers. Discover is can be stringent with its requirements for personal and debt consolidation loans. People looking at securing a loan should have a credit score higher than 660.

What Can Discover Offer?

The company has always been clear that it can offer between $2,000 and $35,000 in loans for various purposes. A lot of individuals take advantage of its features to consolidate their debts or pay off outstanding credit card bills.  Other people use it to go on the adventure of a lifetime or start a business. Like other financial institutions, Discover doesn’t charge you extra fees if you’re able to make payments on time. In case you do encounter some financial problems, it does offer mutually beneficial solutions to help borrowers complete their payments.

To qualify for a Discover personal loan, individuals must be a US citizen, 18 years of age, with a credit score of above 660. More importantly, you must have at least $25,000 as your minimum household income.  The majority of employed people will have no problem meeting these requirements. However, those who have had bad credit may find this challenge.

For borrowers with great credit scores, Discover sometimes extends interest rates of as low as 6.99%. More importantly, there are no closing costs or origination fees. The company imposes surcharges on late payments, though. Discover also offers automatic debit arrangements to make sure that borrowers don’t forget their due dates and end up missing payments.

Why Choose Discover for Debt Consolidation Loans?

Discover’s financial products clearly aren’t for everyone. these products are not beneficial to applicants with poor credit ratings or those who have had a history of bad debt. They also don’t work for students or fresh graduates who are just starting with their careers. Discover financial products also aren’t for people who are between jobs at the moment. However, they work really well for people who are able to meet their criteria.

Discover’s debt consolidation loans boast of the following advantages:

  1. Flexible terms for effective budgeting. Borrowers can choose from a short three-year term for their loan or extend it to as long as five or seven years. Discover is unique in this feature because most lenders don’t give customers the option to choose their repayment period. It is also rare for lenders to offer borrowers a seven-year payment period. This flexibility is ideal for people who are looking at borrowing large sums because their monthly payments will be smaller. This means that the grocery budget will not suffer, nor will the payments on your car or home.
  2. 2. Consolidate your loans and credit card debts. Paying just one company will save you money on interest rate payments. It’s also more convenient to pay just one bank or company instead of different ones in a given month. This ensures that payments are made on time, and that you are able to pay all of them.

What Discover does is pay off other existing loans from banks or credit companies and consolidate all of them into one large loan. As mentioned earlier, loans can reach as much as $35,000 and can be paid over a period of three to seven years. The interest rates are reasonable, and the payments are divided into equal amounts. This is ideal when you are paying off a large debt and you don’t want to be pressured with paying large sums monthly. 

What You Need to Know

Discover promises lower interest rates but you cannot estimate how much the monthly payment amounts to until you have actually applied for a loan. The company considers credit score, financial history, as well as your household income before determining the interest rate. People with good credit ratings are offered interests rates lower than 10%. Average credit scores, on the other hand, can be charged with rates as high as 24.99%. All things considered, though, this is still a lower rate than you get from many credit cards.

As a traditional lender, Discover offers loans to individuals from all 50 US states. For best results, applicants are encouraged to visit the Discover website and enter their desired loan amount as well as their estimated credit score. This will give customers an idea of their APR and monthly payments. Remember though that these are estimated values. You won’t know your actual credit score until you’ve had a formal credit check or investigation.

You can get a personal loan or a debt consolidation loan from Discover in a few quick and easy steps:

Step 1: Complete the Application Process

Discover customers can complete the application from online or by phone. Call 1-866-248-1255 and one of their loan specialists will walk you through the application process and help you complete the required forms. If applying through the website, customers will receive prompts to enter the required contact information as well as the personal details which are needed to do a credit check. Applicants also need to say how much they want to borrow, how long they want the term of the loan to be, and what the money will be used for.

Step 2: Review Your Options

Before you send in your application, be sure that you’ve reviewed all your other options. You will be asked by the loan specialist to verify your identity. The good thing about it is that the decisions are given out within a short period of time. The interest rate is computed based on the applicant’s creditworthiness. When you receive your interest rate, you can then make calculations and see how much you’re supposed to pay per month. You can also use a debt consolidation loan calculator. At this point, you still have the option to turn it down if you feel that the interest is too high for you.

You can always look for other options online. If you have a great credit rating, there’s a good chance that you will be able to find an option with lower interest rates. However, they may not have the flexibility of extended payment terms like Discover. It’s up to you to decide. If you feel that you will be able to pay the loan in a shorter period, you’re free to go with another option.

Additionally, even after the loan is approved, Discover sometimes asks for additional documents before they release the money. Borrowers can be asked to produce pay slips, bank statements, or your latest income tax return. It’s natural for Discover to want to verify that you can indeed make the payments for the sum your borrowed – and ensure that you will be making the payments regularly for the next three or seven years, depending on how long you’ve borrowed the money for.

Step 3: Claim Your Money

Another good thing about applying for consolidate debt loans with Discover is that they don’t make borrowers wait for very long. Many borrowers have been able to receive money the following business day. Others had to wait for as long as 10 working days at the most. Discover can also send the money directly to the banks or credit card companies you owe money from or send it to the borrower via direct deposit.

Step 4: Don’t Forget the Monthly Payments

Monthly payments are important to maintain. For one, you will be charged penalties and late fees if you are late with your payments. Second, late payments can seriously affect your credit score. Discover sends out the payment records of its borrowers to Experian, Equifax and TransUnion, three of the largest credit bureaus.  If you feel that you will be having trouble making your payments, get in touch with Discover ahead of time so you can work out a restructured plan or payment scheme.

Final Thoughts

With low interest rates and flexible repayment terms, Discover could be the right match for you when you need to find a dependable debt consolidation loan. No matter how many payments you are making, you can reduce them into a single bill so that you can save time and energy. Read more: Where can I get a debt consolidation loan?

Depending on your current interest rate and loan terms, you also have a good chance of reducing your payments. The biggest issue that turns people away from Discover is that they need to have a decent credit rating to be considered. Also if you're a veteran it may be better to look for a VA loan for debt consolidation.

Dan Steadman

Dan Steadman

Financial Advisor, MoneyBeagle

Dan is one of the top financial experts when it comes to debt consolidation. With more than 20 years of experience helping people tackle debt, he has a unique insight when it comes to solving debt-related problems. 

Dan got his start when he went to work for a bank after getting his Business Degree. He worked his way up and became a loan officer. This position gave him unique insights into the ways that financial products work and how people can utilize different financial products to improve their lives. He’s seen hundreds of success stories and just as many failures – so he knows what steps are most likely to help his readers.

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