Although personal loans are one option to get cash when you need it most, you should consider your financial situation and goals before you move forward. Consider whether you really need a loan for personal purposes or if you have other options. You should also have a plan for repaying the loan. Compare multiple lenders before you choose a personal lender.
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When shopping for a personal loan you should be aware that the final rate you get may differ from the advertised rates. The final rate you end up with will depend on many factors including your credit score and income as well as the loan amount and terms. Pre-qualification for loans or checking your interest rates with a soft credit inquiry can be done without impacting your credit score with some lenders. However, some lenders may require you to complete a hard credit inquiry in order to verify your rate. This could lower your credit score. All lenders conduct a hard credit inquiry before you apply for a personal loan. Consider the interest rate when choosing a personal loan. Also, consider whether the lender has any origination fees, late fees, or prepayment penalties. These fees can increase the total cost of the loan.
Alternatives to personal loans
A personal loan is a great way to consolidate or pay off large debts. Personal loans can be used in lieu of a personal loan.
There are many home equity options. There are three options to tap into your equity: a home equity loan or a home equity line credit (HELOC), and a cash-out refinance. You have three options to access your equity for cash. You may be able to get better rates using your home equity than with an unsecured personal loan. There are some drawbacks to using your home equity.
Credit card for balance transfer. Some credit cards allow you to transfer existing debt to a new account at 0% APR. This can usually last between 12 and 24 months. A balance transfer credit card is a good option if you are looking to consolidate your debt. You can eliminate existing debt as long as the balance is paid off before the introductory period ends. Interest will not be charged if you pay the balance in full. You could end up paying a higher APR if you don’t pay the balance in full before the end the introductory period.
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Personal savings. Saving money is a great way to avoid personal loans if you are planning to purchase a large item. An emergency fund can help you avoid having to resort to personal loans in an extreme situation. Experts recommend that you have between three to six months worth of expenses in an emergency fund. You can start your emergency fund building if you have the time.
How do I Qualify for a Personal Loan?
To be eligible for a Discover personal loan you must be at minimum 18 years of age and a U.S citizen or permanent resident.
You must also have a minimum income of $25,000. You must also have a minimum household income of $25,000. Discover does not specify a minimum credit score on its website and did not respond to a request for information regarding credit scores in the time allowed for publication.
Discover offers only unsecured personal loans and does not offer the option of adding a cosigner or co-borrower. You won’t be eligible if you can’t prove your income and credit to qualify for a loan.
Who should get a Discover Personal loan?
You can use Discover personal loans for many purposes including vacation, debt consolidation and home improvements, as well as personal expenses such as weddings, medical bills, and other personal expenses. However, a Discover personal loan cannot be used for the following:
- Investing
- Costs for businesses
- Real estate (there is a home loan available through Discover).
- Education (Discover private student loans)
Because there are no other options, you can only apply for personal loans with your own credit.
For those who require money fast, Discover is a great option. You can get decisions within minutes and have your funds in the mail as soon as the next day. You have 30 days to return your money if you find a lower rate elsewhere, or decide that you don’t require a personal loan. However, we recommend looking around before applying for a personal loan.
You might also want to compare other lenders if there are additional discounts you can get for other Discover accounts or an autopay discount.
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How to apply for a Discover Personal loan?
- Determine how much money you would like to borrow
Before you apply for a Discover personal loan for your money, think about how much you would like to borrow and the best repayment plan for you. Consider what a reasonable monthly payment might be for you, and how it would impact your loan cost. You can obtain a personal loan through Discover for as long as seven years. This will result in a lower monthly repayment. The longer the term, however, means that you will pay more in interest over time.
- Online calculator to find out your personal loan rate
Fill out the form on Discover’s website to see your potential rate for Discover Personal Loans. You won’t lose your credit score by checking your rate. There is no credit check. To get the best rate, compare rates from different lenders.
- Send an application
After you have made your comparisons and selected a lender to work with, it is time to submit an application. This will result in a hard credit inquiry that can impact your credit score. You will likely be required to provide additional documentation such as a photo ID and proof of address.
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- Wait for your loan approval. Sign your agreement to receive funds
In some cases, Discover may be able to return a decision the same day you apply. You might also receive your funds the next day if you have all you need. If you are self-employed, or have other circumstances that make approval more difficult, the process may take longer.