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Discover Debt Consolidation review

Discover offers a slick, simple and supportive debt consolidation service that is hard to fault.

Discover Debt Consolidation review
(Image: © Discover)

Our Verdict

Discover offers a straightforward application process, transparency in terms of rates and fees, and an abundance of support if you’re unsure whether debt consolidation is for you. There are plenty of helpful features and benefits on offer too, all which makes you feel as though Discover is genuinely on your side when it comes to helping improve your financial situation.

For

  • Easy to apply and great range of features
  • You can check rates without impacting credit score
  • No penalties for early paybacks

Against

  • You need household income of $25,000 to apply
  • Below average unsecured maximum loan amount

Discover is one of the leading online bank and payment service companies in the U.S., and prides itself on pushing people to spend smarter, manage their debt and save money for a secure financial future. A full range of services are available, including banking, home loan and credit card products, but it is the debt consolidation service that stands out amongst its offerings, and sees Discover rank as one of the best debt consolidation companies that there is.

Having created financial products since the mid-1980s, Discover knows what it is doing. The company ethos is one of encouraging better financial habits among its customers – what it does not want to do is punish people for how they may have managed their finances in the past.

The debt consolidation service that Discover offers means you can bring across existing loan, credit card, store card and gas card debt and pay it off under one low, monthly cost. There are alternative options available if you are looking to consolidate student loans or want to refinance your mortgage loan.

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Discover Debt Consolidation review: Eligibility

  • Household income of $25,000
  • Good credit score recommended

In terms of eligibility, Discover keeps it simple. In order to apply, you must be a U.S. citizen or permanent resident over the age of 18, and your household – rather than just you - needs to have a minimum income of at least $25,000. This means that you are able to apply if you are unemployed.

Several other factors will be considered when determining whether you qualify for a debt consolidation loan, including the information you provide on your application, your credit history, recent credit activities and credit inquiries registered to your name. However, if you manage to provide all the information required straight away, a same-day decision on your application is possible.

The recommended minimum credit score is 680, so you’ll likely need to be on the better side of good to get the best rates. However, if you go online, you can see what your rate will be before you apply without affecting your credit score.

Discover Debt Consolidation: Application process

Key features

Loan amounts: $2,500 - $35,000

APR: 6.99% - 24.99% fixed

Loan terms: 36 - 84 months

Fees: No origination or application fee; charges may apply on late payments

Waiting time for funds: 1 - 7 business days

  • Apply online, over the phone, by mail
  • Potential next-day turnaround

Applying is straightforward, and can be done online, over the phone or by mail if you have received an invitation.   

You will need to select the loan amount and payment term that fits your budget, and then proceed with sharing the personal information that is required. The type of things you will need, and so should have to hand, include:

  • Your Invitation Number (if you received an invitation to apply)
  • Household income information
  • Employment history
  • Bank account number and routing number if you're planning to deposit funds into checking or savings account
  • Creditor information (including balances and account numbers). 

Once your application is received, a loan specialist may call you to confirm your information and verify final details. However, once it is approved, all you need to do is accept your terms and decide how you would like to receive your funds – these could be sent to you as early as the next business day, but may take as long as 7 days if there are errors on your application, or any other complicating matter.

Discover Debt Consolidation review: Essential details 

  • Maximum unsecured loan of $35,000
  • No fees at all if you pay on time

Discover offers debt consolidation loans over terms of between 36 and 84 months, and loan amounts of between $2,500 and $35,000. The option to pay back a loan over a period as long as seven years offers considerable flexibility to any borrower, and should also allow monthly payments to be kept low. If you want to borrow more than $35,000 – and it is a little on the low side compared to the value of unsecured loans available through some other lenders - Discover suggests that a home equity loan may be a viable option.

In terms of the interest you can expect to pay, all loans have fixed rates of anything between 6.99% to 24.99% APR. As is to be expected, the higher your credit score, the lower your interest rate is likely to be. Also note that a debt consolidation loan requires at least 70% of the loan funds go directly to creditors - if the amount paid to creditors is less than 70%, your final approval may be affected and your APR could be higher.

Discover Debt Consolidation review

(Image credit: Discover)

There are no application or loan origination fees, and indeed, no fees of any kind as long you make your payments on time. If you want to pay off your loan early, there are no prepayment penalties to worry about either. Where charges could become a reality is if a payment is late or there are insufficient funds to cover a payment.

Discover Debt Consolidation review: Features

  • Can delegate creditor payments
  • 30-day money-back option 

Discover offers a number of tools to help make sure you remain on the right track. Once you agree to your loan, Discover offers the option of paying your creditors for you, easing the stress of managing your debt. All you need to do is supply the relevant account numbers, amounts and addresses, and Discover will do the rest. If you have any remaining money in your loan, it might be possible to have the funds deposited directly into your checking or savings account.

As part of a pledge to ensure customers are benefiting from the lowest interest rate possible, Discover’s loans also include a 30-day money-back guarantee. If you decide within 30 days that you do not want your Discover personal loan – maybe because you have found a cheaper rate elsewhere - simply return the funds via check (including any amounts paid directly to your creditors), and you will be charged zero interest.

You can sign up to the free automatic payment program at any time, which withdraws your regularly scheduled monthly payment from your checking or savings account so you’re never late paying bills again. And if you'd like to pay off your loan quicker, there is the ability to set up larger payments too.

Discover Debt Consolidation review: Service

  • Can be managed entirely online
  • Comprehensive resource center

Managing your Discover debt consolidation loan account is easy, and can be completely done online. You can upload documents, review your payments, make payments and see the outstanding balance whenever it suits you. This means that you can access the account online 24/7 whether through a desktop computer, or via your phone or tablet. If you like to keep on top of all your outgoings, statements will be available 20 days prior to your payments and you can choose your payment date to suit your budgeting needs.

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Discover Debt Consolidation

(Image credit: Discover Bank)
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Discover Debt Consolidation

(Image credit: Discover Bank)
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Discover Debt Consolidation

(Image credit: Discover Bank)

In terms of support, there is a well-stocked resource center with articles, videos, polls and quizzes, and infographics. Everything is neatly sectioned off, so it is easy find information about the particular area you are interested in. Once you're in amongst the debt consolidation section, it is broken down further into sub-categories, such as action plans and benefits. There is a debt consolidation calculator too, and a crystal clear FAQ section.

Should you use Discover Debt Consolidation?

Discover provides a well thought out and easy to use debt consolidation service, with all the support that you could wish for. Applying is straightforward, there are no charges if you keep on top of your payments, and the ability to see your rate without affecting your credit score is welcome too. The supporting resources are excellent and then there are a number of helpful features, such as the 30-day money-back guarantee and automatic payment programme, that make you feel as though Discover is definitely on your side. 

On the downside, the maximum unsecured loan available of $35,000 might be a little low for some, while you will likely need a good credit score to get the best rates. However, if you’re looking for a simple, stress-free debt consolidation service then, on most counts, Discover certainly delivers.


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