According to TransUnion, almost 16 million Americans currently have a personal loan. For comparison’s sake, that number was less than 10 million just five years ago. One of the reasons that the volume of personal loans has increased over the years is widely thought to be consumer responsibility. A growing number of individuals are keeping a close eye on their finances, using personal loans as a way to consolidate credit, stick to a budget, and manage their debt.
Debt consolidation is an attractive alternative to paying multiple bills with multiple creditors, with a wide range of fees and interest rates. This can make it hard to budget with certainty and can easily lead to missed, forgotten, or bounced payments. Debt consolidation pays off your existing debt, leaving you with a single creditor and single monthly payment to worry about. This type of arrangement is perfect for those with multiple lenders, regardless of credit score. Individuals across all age ranges, including younger consumers and mature borrowers, often turn to personal loans to help manage their debt load.
About Personal Loans
A personal loan is a lump sum of money that a bank or lending institution loans an individual with specific payment term and interest rates attached. Personal loans are one-time payments, unlike a line of credit that can extend for years. Borrowers must meet the repayment obligation or suffer financial consequences. In some cases, this can include the imposition of steep fines and fees on top of the amount due.
Personal loans can be obtained for just about any reason, including:
- Renovating or remodeling
- Paying for unexpected medical expenses
- Repairing a vehicle
- Obtaining a vehicle
- Making a short-term investment
- Paying off debt
While it is not necessary to tell the lender why you are interested in getting a personal loan, your Bonsai Financial advisor may ask. This knowledge can help them work with you to find a suitable lender, even if it is not with Discover. It can also help them pinpoint the exact amount of the loan that
Ideal Candidates for Discover Personal Loans
Not all individuals are ideal candidates for Discover personal loans. While there are certain benefits to obtaining a loan from this company, such as payment flexibility and direct negotiation with creditors, there are several drawbacks for consumers with bad credit ratings. Discover clients must have a credit score of at least 660. You cannot file a joint application either, which means that you cannot rely on your partner or a family member’s good credit rating to help. In addition, the maximum amount you can receive is $35,000. For individuals hoping to remodel their homes or invest in a high-quality family vehicle, $35,000 is not an adequate amount.
Discover personal loans are perfect for those who are in the process of repairing their credit but need a little extra financial help along the way. These loans are also ideal for individuals who are not great with money or who need discipline when it comes to responsible spending. Discover personal loans can pay off the creditor directly, reducing the risk of accidental overspending. In addition, you must prove that you have spent at least 70 percent of the loan on your creditors or face severe financial penalty.
Benefits of Obtaining a Personal Loan Through Discover
There are numerous benefits to looking into Discover personal loans. One of the first ones is that they provide you with a free copy of your credit score, so you can track this online. The repayment terms are also favorable to most borrowers. You are permitted to change your payment date twice during the loan. This is helpful for those who may have switched jobs and have a new pay date. If you are running into financial difficulty and worry about making your payment on time, you can contact a customer service representative to talk about different payment plans or deferring your payment. If you do this in advance of your payment due date, you may even be able to avoid a late fee.
One of the biggest draws is that there are no penalties for early payment. In fact, if you repay the loan in full in the first 30 days, there is no interest charged at all. When it comes time to make your lump sum or monthly payments, you have numerous options, including paying by electronic means, over the phone, by check, or through automatic withdrawal.
Discover Fees and Penalties
There are no fees to the borrower to file an application, or to make an early payment. Discover also does not charge a fee to process a personal check. One of the biggest perks experienced by those who are in the process of rebuilding their credit is that there are also no fees for returned payments. Forgetting to put money in your account or accidentally bouncing a check can often cost people a lot of money, since both the bank and the creditor tend to charge an return fee. With Discover, you do not need to worry.
Alternatives to Personal Loans from Discover
Unfortunately, not everyone who applies to Discover can get approved. Their minimum credit rating can be a big barrier for those who have bad credit and are just starting to repair it. If you like the idea of flexible payment terms, direct discussion with creditors, and access to professional financial advice, you can contact us at Bonsai Financial instead. We specialize in matching our customers with preferred lenders across the country, often without a credit check.
Once we are able to pair you with a reputable lender, the funds typically arrive in your account the next day. This gives you the opportunity to pay off your debt sooner, restoring your credit much faster. When you speak with a financial advisor, be sure to have the following information with you:
- Your current income
- The amount of the loan you require
- The maximum amount you can reasonably pay each month
- Timing of the automatic payment withdrawal
- Information about your creditors, if you are planning to use the funds to close out those accounts
Whatever the reason you want to look into Discover personal loans, contact us at Bonsai Financial to help you arrange one that is suitable for your needs. We work with a variety of lenders across the country, taking the time to ensure that the one you are paired with can provide you with the loan you need on the terms you want.