Discover Consolidation Loans Review

Have you been looking at different lending companies trying to find the one that can help consolidate your debt? The Discover debt consolidation loan could be an ideal option for you.

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Table of Contents

    Terms, Fees and Rates 2020

    LOAN AMOUNTS

    $2,500 up to $35,000

    LOAN TERMS

    Up to 84 months

    RATES APR

    6.99% and 24.99%

    MIN. CREDIT SCORE

    660

    LATE PAYMENT FEE

    $39

    ORIGINATION FEE

    1%

    They offer loans to those who need better control of their monthly finances through fantastic value and customer service. 

    Discover Pros and Cons

    Pros

    • No origination fee
    • No prepayment penalty 
    • Low annual percentage rate
    • Allows longer repayment plans
    • Checking your rate will not affect your credit score
    • Fantastic client reviews

    Cons

    • Need a good credit score 
    • Maximum loan of $35,000
    • Charges late fees
    • Co-signing not permitted
    • Harder to get approved 

    Why Should You Consolidate Your Loans With Discover?

    Discover could be the ideal choice when applying for personal loans to consolidate your debt. If you have a credit score of 660 or better, it is perfect for you. However, if you have a lower credit score, it can be hard to get approved with Discover.

    Let’s take a look at some of those benefits here:

    • Reasonable APR rates
    • No origination or extra fees
    • No early payoff penalty
    • Long payment plans available

    One of the best features Discover offers clients is reasonable annual percentage rates. The rates range from 6.99% - 24.99%. Which rate you receive on your loan is directly correlated with your credit score and financial history. 

    By consolidating your debt and paying on time every month, a Discover loan can improve your credit score. You can then refinance your loan with a better interest rate, which can save you a lot of money in the long run. 

    There is also no origination fee or extra fees if you always pay the correct amount on time. Another fantastic quality about a loan with Discover is that there is no penalty for paying it off early. Discover offers payment plans for up to 84 months, which allows for lower monthly payments. 

    Discover goes above and beyond most other lending companies. They offer their clients free consumer education tools you can use for the rest of your life, even after you pay off your loan. 

    Discover is a perfect choice for anyone with a good to excellent credit score. 

    What Are the Eligibility Requirements? 

    As with all loan companies, there are a number of eligibility requirements you must meet to gain approval.

    Let’s delve into the details of those a little deeper here:

    • Good enough credit score to apply is the most critical factor
    • Multiple credit cards and other commitments are more likely to gain approval
    • Prove that you are 18+ and are a U.S. citizen or a legal permanent resident.

    Discover wants to make sure that they are lending money to those able to pay it back. They also want the loan they give to be used to help manage your debts and improve your credit score, not hurt it. 

    How to Apply for a Discover Consolidation Loan 

    Discover has a few more requirements than other companies, but if you have all the proper documents, then it should be easy to apply.

    Most people hear if they are approved very quickly and then can get their money in just a few days.  

    Step 1 - Fill out personal and financial information
    Step 2 - Prove that you are a U.S. citizen or a legal permanent resident and verify your age with an official and accepted identification document
    Step 3 - Advice Discover how much you would like to borrow and what the money will be used for (debt consolidation)
    Step 4 - State the loan term length you need
    Step 5 - provide your name, phone number, address, and email address to apply. 
    Step 6 - Prove your income with your employment status and annual earnings needs
    Step 7 - Provide your monthly mortgage or rent payment, whether you have a savings account and your social security number

    After you have been approved, you will provide your bank account number and routing number so you can get your funds deposited. 

    Customer Service

    A Discover customer service representative can be reached in many different ways. You can contact them by phone inside or outside the United States, by mail, by email, or by messaging them directly through their website Live Chat.

    What Kinds of Debt Can Be Consolidated With Discover?

    You can consolidate any of the debts you have with a personal loan. However, there are more common types of financial obligations that people usually combine into a single payment. 

    The first type of debt is credit card debt. It straightforward if you are reading this article and have multiple credit cards with balances that need to be paid off. They all probably have different minimums with various payment dates and high-interest rates. You can pay off all your credit cards and only have to worry about one payment per month. 

    Another type of debt that many people have is student debt. While in school, you might have applied for several different types of loans, some with higher interest rates than a personal loan. You can pay off all your student loans and then only have one payment, hopefully with a lower annual percentage rate. 

    If you have another personal loan with a substantial interest rate, you can refinance it. As long as you have been paying the correct amount on time and consistently, you probably have a better credit score now than when you first applied. You can reapply and hopefully get a lower rate than you are paying now. 

    Discover also offers the ability to consolidate loans using your available home equity, though this has inherent risks associated with leveraging such a large asset, it could prove the easiest way to get yourself back in the black.

    If you have one or all of these types of debts, you can group all of them together and not have to worry about each payment separately. 

    The Bottom Line

    Consolidating your debt with a Discover personal loan can be an excellent way to get a hold on your liabilities and have a set plan on how to pay it off. In a way, it can be the light at the end of the tunnel for you to live a debt-free life. 

    If you can’t apply for a Discover loan because of your credit score, look at ways to improve it so in the future you can use and get approved with a low annual percentage rate and continue building your credit score.