Personal loan rates, and how discover personal loans compare

Personal loan APRs commonly range from about 6% for excellent credit to 35.99% for borrowers who are rebuilding, with most fair-credit offers landing somewhere in the high teens to low thirties. Every lender sets its own range.

The table below shows broad estimates of what lenders in the market tend to offer by credit band for loans of $500 to $5,000. These are not offers, and individual quotes can fall outside them.

Many state laws and most mainstream lenders cap personal loan APRs at or near 36%. Some branch lenders charge more where state law allows, which is worth knowing before you accept an offer.

Recent published reviews list discover personal loans at 6.99% to 24.99% APR with no origination fee, for amounts from $2,500 and terms of 36 to 84 months. That ceiling is lower than many smaller lenders publish, but the minimum score and amount are higher.

We are not affiliated with Discover and cannot quote its rates. People who search for discover personal loans are often comparing that lower ceiling with the wider credit range of other lenders. The trade-off looks like this:

For a strong-credit borrower who needs $2,500 or more, a large bank is often worth checking. For a smaller amount, a shorter term or fair credit, lenders with broader ranges are the realistic option, and comparing several is how you find the lowest cost.

APR is the annual cost of a loan including interest and most required fees, such as an origination fee, expressed as a yearly percentage. It is the best single number for comparing two offers of the same amount and term.

The interest rate covers only interest. If a loan has a 20% interest rate and a 6% origination fee taken from the proceeds, its APR will be higher than 20%, because you receive less money but repay the full amount. Federal Truth in Lending rules require lenders to show the APR on every offer.

Two offers with the same APR, amount and term cost the same in total. If one has a lower rate but a fee and the other has a higher rate but no fee, compare APRs rather than rates.

Lenders set your APR mainly from your credit score, debt-to-income ratio, income stability, the loan amount and the term. Small changes in any of these can move an offer several points within the lender’s range.

• Credit score and history. Recent late payments weigh more than old ones.
• Debt-to-income. Less debt per dollar of income lowers the rate.
• Utilization. High card balances can push the rate up even with on-time payments.
• Term. Some lenders price shorter terms lower.
• Amount. Very small loans can carry higher APRs because fixed costs are spread over less principal.
• Autopay. Many lenders cut about a quarter point for automatic payments.

Paying down a card before applying, choosing a shorter term or adding a co-borrower where allowed can each improve the rate you are offered.

Small loans of $500 to $1,500 often carry higher APRs than larger ones from the same lender, because the cost of underwriting and servicing a loan is similar whatever its size and is spread over less principal.

That does not always mean a small loan costs more in dollars. A $1,000 loan at 29.99% over 12 months costs about $170 in interest, while a $4,000 loan at 19.99% over 36 months costs over $1,300. The total cost depends on the amount and the term as much as on the rate.

Large banks often avoid the smallest loans altogether. Recent published reviews show discover personal loans starting at $2,500, and many online lenders start at $1,000 or $2,000. Lenders in our network consider requests from $500, which helps when you need only enough for one repair or bill.

New personal loan offers tend to move with broader interest rates, though more slowly and by less than credit cards do. When benchmark rates rise, lenders’ funding costs rise and new APRs usually drift up; when benchmarks fall, offers tend to ease.

Your own credit profile has a much larger effect on your rate than market swings. A borrower who improves from fair to good credit can see a far bigger drop than any change in benchmarks would bring. That is why working on utilization and payment history before applying often pays off more than waiting for rates to fall.

Once you sign a fixed-rate loan, market changes no longer affect it. People who compare discover personal loans with other lenders at different times may see slightly different ranges; always use the figures shown on the current offer, not an old quote. Credit card APRs, including those on Discover it cards, are variable and can change after you borrow.

Nearly all personal loans carry fixed rates, so the payment never changes over the term. Lines of credit and credit cards usually carry variable rates tied to a benchmark, so their cost can rise.

A fixed rate is set at signing and protects you from rate increases. If market rates fall after you borrow, you can refinance, but most borrowers on small, short loans simply keep the original rate. For a $500 to $5,000 loan repaid within a few years, a fixed rate is almost always the better fit.

Our comparison personal loan vs line of credit explains when a variable-rate line can still cost less.

Origination fees commonly range from none to about 10% of the loan amount and are usually deducted before funding. They are included in the APR, so an offer with a fee will show a higher APR than its interest rate.

On a $2,500 loan, a 6% fee is $150. If deducted, you receive $2,350 and repay the full $2,500 plus interest. To net the full $2,500, request about $2,660. On short loans, fees weigh more heavily, because there are fewer months to spread them across.

When a lender offers a choice, such as a lower rate with a fee or a higher rate with no fee, compare the total of payments for the term you plan to keep. If you might repay early, the no-fee option often wins.

State laws set limits on interest rates and fees for many consumer loans, so the APR and amounts available can differ from one state to another. Some states cap personal loan APRs at 36% or less; others allow higher rates for certain loan types.

Lenders in our network follow the rules of the state where you live, which is why availability, amounts and rates vary. A lender may not lend at all in some states, or may offer different terms. If you move, your existing loan generally keeps its original terms.

If an offer seems unusually high, check your state’s financial regulator website for its rate limits and lender licensing.

The fastest ways to get a lower personal loan rate are to pay down card balances before applying, choose a shorter term, set up autopay, add a qualified co-borrower and compare several offers through prequalification.

1. Check your credit reports for errors and dispute any you find.
2. Pay down a card to lower utilization a month before applying.
3. Prequalify with soft checks to compare estimated rates.
4. Ask whether a shorter term or autopay lowers the rate.
5. Consider a co-borrower with stronger credit, where allowed.
6. Accept only the offer with the lowest total cost that fits your budget.

Each step is small, but together they can move an offer several points. Our eligibility guide explains what lenders review.

Compare personal loan offers on APR and total of payments first, then on the amount you will receive, the payment and the term. The offer with the lowest total cost for a payment you can afford is usually the best one.

Put each offer’s numbers side by side: amount, APR, term, monthly payment, total of payments and any fee. The cheapest offer is often obvious once the totals are in one place. If two are close, choose the lender with clearer terms, a longer grace period or better hardship options.

Our compare lenders page lists published ranges for 20 lenders, which helps you see whether an offer is near the low or high end of what that lender publishes. When you are ready, our application page sends one request to lenders in our network.

Our service is free to use; any rate and fee you see on an offer come from the lender, and lenders may pay us when a loan is made. That arrangement never changes the APR or terms a lender shows you.

Lenders in our network consider requests from $500 to $5,000. Each lender reviews your request on its own terms and decides whether to make an offer. You can compare offers and decline any or all at no cost. Whether you are measuring offers against discover personal loans, discover loans more generally or a credit union quote, the comparison that matters is total cost for the term you choose.