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Discover Card - Discover Personal Loans Are a Scam

Company Discover Card
Product / Service Discover Personal Loans
Location Livingston, New Jersey
Category Credit Cards
Views 1984
Monetary Loss
$8587
 

Discover Personal Loans are not what the company advertises them to be. They claim that you can pay off the loan early without penalty. What they do not tell you is that they bill the interest for the initial duration of the loan as a "finance charge" which you are required to pay regardless of when you pay off the loan.

What this means is that even if you pay off the principle of your loan early, you still owe the company interest for the original term of the loan. Unfortunately I did not know that companies could get around the "no penalty for early payoff" by charging the interest as a "finance charge".

Now they have me locked into a higher interest rate than the credit cards that I used the loan to pay off. Definitely look at this closer before you sign up. It is a life lesson for me and I personally will never do any banking through Discover again. 2db0606

 
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21 hours ago 
Real Waste of time don't bother. Throw those letters in the garbage. They collect all the info happy about your good credit and then say..... But sorry although your payment was always on time, we feel that we cannot loan the consolidation money at this time. All I wanted was the lower interest rate.
Worthless, don't bother. Check at your bank!
Reply to boobaby

Mar 21  from Oakton, Virginia
So what is the truth?! Can you pay it off early and not owe all the interest or not? How can there be so much confusion about this!
Reply to DuckDynasty21

Feb 12 
My credit scores are 796, 760 and 762 with the 3 bureaus. I have a nice annual salary and low debt to income ratio. I received a prequalification letter and applied online and was instructed to call a number because they have to speak with all of their customers as a condition of the approval process. When I spoke to a representative I was not offered the optimal rate of 7.99% or anywhere close to that... I was offered 15.99%. I asked to speak with a manager and the manager stated that because of my solid payment history as a discovercard customer he could offer me 13.99%. I since have written a letter to the CEO David Nelms. I need to understand what are the credit factors that are disqualifying me from an optimal interest rate. --- Something seems fishy about having to speak to someone to get approved. What factor can they distinguish by speaking with someone that cannot be determined by answering questions objectively online?? Hmmmm? Maybe you can tell a lot by someone's voice. I wonder if there are some similarities to those of us who have solid credit scores, income and low debt to income ratios but are still being offered very high interest rates????
Reply to Unhappy Camper

Dec 28, 2013  from Smyrna, Tennessee
I had a Discover Loan as well, recently paid off a 5 year loan 2 years early. No hassle or issues. Exactly as their terms state, no early payoff off penalty. I'd definitely get another loan with Discover if my situation required it.
Reply to Jan

Apr 04, 2013  from Princeton, Illinois
Just went through the process with no problems. Our credit isn't stellar, so we didn't qualify for the lowest rate, which is what I expected. Those who have posted on here claiming great credit and then getting denied either aren't aware of thier true financial condition or aren't being honest. I have had a credit card with discover for years, and I find them to be a very good company. That's why I went with this loan. It's always a good idea to do your due diligence, but I would not recommend basing your decision on the comments posted here.
Reply to Jan

Mar 13, 2013  from Washington, District Of Columbia
You got the offer as low as... my @ss.

I told them everything about my income and debt. I was hoping to use the loan to pay down debt I have at 13%. Because I am accelerating paying off my high interest rate I pay $500 a month on $6,000 debt.

Discover thought I would jump at the oppertunity to borrow at 18% as long as the monthly bill was $250.

I guess they run across enough idiots to play the banking game like a use car salesman
Reply to dog

Mar 10, 2013 
It really pays to read reviews and/or comments.I was close to filling out the application; but I'm a believer in "if it sounds too good to be true, it usually is".These comments helped me to decide that this may not be such a good idea.
Reply to J.J.

Dec 14, 2012 
I think people who are claiming this is a scam either:

A. Don't understand how loans and risk assessment work
B. Are misrepresenting their credit and income situation.
C. Both.

Discover is comparable to other major banks when it comes to their lending profile with regards to personal loans.
Reply to JP

Oct 16, 2012 
I recently applied for a Discover Personal Loan and was quickly approved at the best, lowest rate advertised, of 6.99%. I selected a term of 48 months and my payment is as it should be. I have made two payments so far, and logged on to the Discover loans website to see what it would be if I paid it off today. If I repay the loan according to 4 year schedule, I will pay $2,386.88 in interest. The payoff as of today's date did not show that, it showed my current balance after my two payments, plus only the daily interest accrued from the last statement date to today, roughly $45. In NO WAY did the payoff reflect the interest that would accrue for the entire 4 years of the loan. Possibly the OP is confused as to loan terms.
Reply to JB

Apr 11, 2013 
I was concerned I couldn't pay it off early without paying interest that haven't been accrued, I did the same thing you did and the payoff was what it should be. Not sure where everyone is is getting misleading info from.
Reply to TS

Jul 08, 2012 
I wanted to take out a 20k loan to cover my remodel expenses as I couldnt do the same as another poster mentioned with equity until I was finished. My credit score is 794, the loan was below 20% of my annual income for one year spread out over 5 years and they wanted to charge me more than my CC's interest rate by 4%, including the one I have with them under the premise of simple interest. I have reasons for not wanting to pay for this remodel in cash and wanted a ice simple loan, but they wouldnt budge on the interest. Their loss, just be warned that unless you are one of the lucky few you wont see that 7.99% rate. So I just shuffled a couple of things around and now have a 0% interest for 18 months on a 3% transaction fee which will be a lot less then what they wanted. I dont think this is a scam, but it is definitely focused lending that tries to catch those who dont understand financing well enough to really understand the terms being used.
Reply to Joe A

May 28, 2012 
Good day Every Body,

Getting a legitimate loan have always been a huge problem To clients who have financial needs. The issue of credit and collateral are something that clients are always worried about when seeking a loan from a legitimate lender. But REGINALD FINANCIAL LOAN SERVICE. has made that difference in the lending industry.We can arrange for a loan from the range of $2,000. to $100,000,000.00 E-MAIL US VIA reginaldson01@yahoo.com/reginaldson02@gmail.com

Our Services Include the Following:

*Investors Loans..........
*Debt Consolidation..........
*Second Mortgage
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No social security and no credit check, 100% Guarantee. All you have to do is let us know exactly what you want and we will surely make your dream come true.REGINALD FINANCIAL LOAN SERVICE. says YES when your banks say NO. Lastly, we fund small scale loan firm, intermediaries, small scale financial institutions for we have unlimited capital. For further details to go about procuring a loan from: Kindly respond immediately to this E-mail:reginaldson01@yahoo.com/ reginaldson02@gmail.com

LOAN APPLICATION FORM PERSONAL INFORMATION

First Name:.........
Last Name:.........
Contact Address:.........
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State :.........
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Reply to Mr Benson Raymond

May 27, 2012 
Good day Every Body,

Getting a legitimate loan have always been a huge problem To clients who have financial needs. The issue of credit and collateral are something that clients are always worried about when seeking a loan from a legitimate lender. But REGINALD FINANCIAL LOAN SERVICE. has made that difference in the lending industry.We can arrange for a loan from the range of $2,000. to $100,000,000.00 E-MAIL US VIA reginaldson01@gmail.com

Our Services Include the Following:

*Investors Loans..........
*Debt Consolidation..........
*Second Mortgage
*Business Loans........
*Personal Loans..........
*International Loans

No social security and no credit check, 100% Guarantee. All you have to do is let us know exactly what you want and we will surely make your dream come true.REGINALD FINANCIAL LOAN SERVICE. says YES when your banks say NO. Lastly, we fund small scale loan firm, intermediaries, small scale financial institutions for we have unlimited capital. For further details to go about procuring a loan from: Kindly respond immediately to this E-mail:reginaldson01@gmail.com

LOAN APPLICATION FORM PERSONAL INFORMATION

First Name:.........
Last Name:.........
Contact Address:.........
City/Zip Code:.........
State :.........
Country:.........
Gender:.........
Date of birth (yyyy-mm-dd):........... Show more
Reply to Mr Benson Raymond

May 06, 2012 
I love how people brag about such great credit, yet they're paying 13% on a credit card, and can't get approved for less than 18% on a discover loan. That's because you have too much bad debt and other loans still withstanding. This loan is not a scam. I would have had no other way to re-roof my 1890's home (borrowed $22,000 to have a few grand extra) at 7.5%. I went with the loan due to the fact that I won't have equity until I finish the restoration and have a reappraisal done to pay off the loan early. There's no such thing as a good loan if you pay on the full term. There is nothing about the loan that is not written in the disclosure. The only thing I didn't like about the app. process was that they didn't tell me that once they approve me for an amount that I request, at a specific rate, they can't submit a second request for a higher amount. Basically, whatever amount you're think you may need to get approved for, you need to go for it the first time, or you will have to wait a minimum 6 months to reapply for a larger amount, if they still have an offer available. This loan was a great deal for me.
Reply to You can find scam sites on any

Apr 25, 2012 
This offer came at a perfect time. My loan request was approved at a higher rate than the 7.99% initially advertised. However, the recording at the call's end gave me every explanation as to why the rate increased. I also will have my payments automatically deducted each month. I specifically asked about prepayment penalties and was advised there were none. The only downfall is the initial rate is with you throughout the life of the loan. To date, I am satisfied as I applied on Saturday and my credit cards have been paid as of today with the additional funds to my checking. I will be sure to report back should anything change.
Reply to Bobbi

Apr 24, 2012 
I applied for a loan last year, to transfer a credit card balance. I got 7.99% for my excellent credit (my credit score is 790). The terms allow me to pay off the loan early with no penalty.

Considering this is an unsecured loan, I found the terms to be quite reasonable, lower than my credit card rate, and with no balance transfer fee like most credit cards have. I have them auto-deduct the payment, so I never worry about being late. I'd use them again. It makes me wonder if the original complainant understands his loan terms.
Reply to Tim

Apr 08, 2012 
I just applied for a Discover Loan of $5000 and was approved for a rate of 9.99%, which isn't too bad. I did ask about if there were any penalties if paid in full and the rep stated no. I did reread the full disclosure of the loan and it did state will pay interest on loan balance and nothing when it's paid off. I still haven't decided it I am taking it though.
Reply to tia

Mar 30, 2012 
I have a discover personal loan. Although the interest rate is higher than what I had hoped, at 14%, it is still much lower than some of the 21% rates of my CC's. Not to mention that it is in fact "Simple Interest".
This means that it is compounded monthly. Not daily like a credit card is.
I checked thuroughly before accepting this loan, and I can pay off the remaining principle anytime, without penalty, and without further interest or "finance" charges.
I don't know what some of you think you know about this loan, especially if you don't actually have the terms of the loan.

I am perfectly satisfied with my loan, and will pay it off early as planned.

Please stop spreading false fear and bogus information, when you don't have the facts.
Reply to TB

Mar 27, 2012 
Waste of time...I have excellent credit (just got approved for a home loan of $250k for 30yrs @ 4%) and have a small credit card balance of $6,500 I was looking to consolidate. They wanted to offer me 18%...I told them my credit card it at 13% but they still wanted to try to convince me that their installment loan would "look better". Give me a break. Told them to cancell my application....hopefully no funny business goes on.
Reply to MR

Feb 21, 2012 
i have a discover personal loan, just talked to them. asked for my payoff, and it was exactly what is on the bill. i asked if i would owe anything over this amount, they said no.
Reply to rachel
 

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