Discover vs. American Express: Which Personal Loan Is Right for You?

Updated: July 25, 2023

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MoneyGeek looked at how Discover and American Express stack up against each other based on their APR ranges, loan amounts, repayment terms and eligibility requirements. Our comparison can help you make better decisions based on which lender helps you save, offers the loan amount you need or has more flexible terms for your current situation.

Discover is an ideal lender for smaller personal loans, repayable at a fixed rate at any selected repayment term. On the other hand, American Express personal loans offer flexible loan terms with a much more affordable APR.

Key Takeaways

Discover and American Express are top-rated personal loan lenders in the U.S. ideal for small loans with competitive fixed rates.

Personal loan providers have a unique set of requirements that they use to assess your creditworthiness and establish the appropriate APR for you. Your credit history, score and other factors could be included in the evaluation.

Shopping for a personal lender is much easier when you already have a list of requirements, such as a specific loan amount, an APR rate that you can afford to pay and how long you plan to take to pay the loan off.

WHAT WE’RE GEEKING OUT ON

Discover or American Express: Overview

MoneyGeek explores the different factors that might help each borrower decide between Discover and American Express. APR ranges, loan sizes, repayment terms, credit score requirements and fund disbursement periods are factors that weigh the most when choosing a lender.

Discover and American Express personal loans offer small loans to borrowers at an affordable rate and flexible repayment periods. One might be ideal for those planning to pay off a loan for a longer period, while the other has a lower APR offer.

Discover


  • Discover

    Ideal for smaller loans with fixed rates

    • 5.99% to 24.99%APR Range
    • 720Minimum Credit Score
    • $2,500 to $35,000Loan Amount Range
    • 36 to 84 monthsRepayment Terms
    • Next DayTime to Receive Funds

    Discover personal loans are ideal for borrowers looking for a small personal loan that they plan to pay off within a longer time frame. Borrowers who could qualify for its minimum credit score requirement of 720 might be able to take advantage of its competitive rates at 5.99% to 24.99% APR. Funds are disbursed as soon as the next day after the loan is approved.

    There are no closing costs, origination fees or prepayment penalties, but it may have fees for late payments.

    Discover has an easy account management app where you can track your credit score, length of credit history, number of accounts and more. It offers to pay creditors directly, which makes it an ideal personal loan of choice for debt consolidation.

    Pros

    • Flexible repayment terms
    • No origination or prepayment fees
    • Low minimum loan amount
    • Low APR range

    Cons

    • Late payment fee
    • High credit score requirement
    • Small loan amounts
    • No co-signers
    • Doesn’t accept individuals with new or no credit history
    • Loan amount: $2,500 to $35,000
    • Repayment terms: 36 to 84 months
    • Minimum credit score: 720
    • Time to receive funds: Next day
    Discover

American Express


  • American Express

    Best for AmEx cardholders looking to consolidate debt

    • 4.93% to 19.97%APR Range
    • 660Minimum Credit Score
    • $3,500 to $40,000Loan Amount Range
    • 24 to 84 monthsRepayment Terms
    • Same DayTime to Receive Funds

    American Express personal loans are offered to American Express customers who require a loan amount ranging from $3,500 to $40,000. There are no origination fees or penalties for early payments.

    To avoid incurring late fees, make sure to make the monthly installments on time. The disbursement of funds can happen on the same day, and repayment terms run around 24 to 84 months.

    American Express personal loans can be used for a variety of purposes, including paying off existing credit card debt, home renovations, significant life events and any other major purchases.

    Pros

    • A+ BBB rating
    • Flexible repayment terms
    • Low minimum APR
    • Soft credit inquiry

    Cons

    • Potential late payment fees
    • Only offered to American Express cardholders
    • Fund restrictions
    • Maximum loan amount of $40,000
    • No autopay discount
    • Loan amount: $3,500 to $40,000
    • Repayment terms: 24 to 84 months
    • Minimum credit score: 660
    • Time to receive funds: Same day
    American Express

APR Range

Lender
APR Range

Discover

5.99% to 24.99%

American Express

4.93% to 19.97%

Discover offers personal loans with an APR range of 5.99% to 24.99%. On the other hand, American Express offers personal loans with an APR range of 4.93% to 19.97%. Between Discover and American Express, the latter has the lowest minimum and maximum APR.

Annual percentage rate (APR) refers to the interest that you pay on an annual basis in exchange for taking out a personal loan. This is the amount in addition to your principal loan amount that you need to pay off monthly within an agreed time frame.

Lenders calculate your APR based on your creditworthiness, which can be determined by reviewing your credit score and choosing an appropriate loan size and repayment terms. Getting a loan with the lowest APR rate yields the highest overall savings.

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MONEYGEEK’S VERDICT

American Express has a much more favorable APR at a minimum of 4.93% and a maximum of 19.97%. Securing a lower APR means that you will pay less in interest over the course of your loan.

Aside from APR, you should also look into other factors that matter when considering a particular lender.

Minimum Credit Score

Lender
Credit Score

Discover

720

American Express

660

Discover requires a minimum credit score of 720, while American Express has a credit score requirement of at least 660.

Credit bureaus assign each borrower a specific score to have a standard way of determining their creditworthiness. Lenders typically consult major credit card bureaus to verify that a borrower pays debts on time and keeps a good credit history to be eligible for a personal loan.

Having a higher credit score means you can get a better interest rate and loan terms.

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MONEYGEEK’S VERDICT

American Express wins this comparison since its required credit score is lower than the score Discover mandates.

Having a good credit score means lower risk and, therefore, lower APRs. Alternatively, having a bad credit score or a limited credit history means a higher risk of lending you money, ergo, higher APRs.

Make sure to evaluate other factors of your loan’s terms before choosing a lender since credit score isn’t the only consideration that is important when making a decision.

Loan Amount Range

Lender
Loan Amount Range

Discover

$2,500 to $35,000

American Express

$3,500 to $40,000

Lenders have varying minimum and maximum loan amounts available to each borrower. For example, Discover offers a minimum amount of $2,500 and a maximum amount of $35,000. On the other hand, American Express offers a minimum amount of $3,500 to $40,000.

Before applying with any lender, it’s important to determine exactly how much money you need. You don’t want to submit an application with a lender that will force you to take out a loan that exceeds the amount of money you need, while you also don’t want to end up with a lending company that won’t provide you with enough money.

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MONEYGEEK’S VERDICT

In terms of loan amount ranges, American Express wins for offering up to $40,000.

It’s important to determine how much funding you need before exploring offers. Getting a personal loan with an amount that is more than what you need will only end up resulting in more debt if not managed carefully.

Deciding on a lender does not just depend on whether or not it can meet your funding needs. Factors such as origination fees, prepayment penalties and late payment fees can entirely change how much you will be paying in the entirety of your loan.

Repayment Terms

Lender
Repayment Terms

Discover

36 to 84 months

American Express

24 to 84 months

Discover offers repayment terms ranging from 36 to 84 months. In comparison, American Express starts at 24 and goes up to 84 months. Borrowers who want to pay off debt faster may find American Express an ideal choice. However, Discover could be more flexible for those planning to pay it off in a much longer time frame.

Repayment terms include the amount of time you need to pay off a personal loan. The shorter the repayment term, the quicker you can pay off a loan. For most lenders like American Express, a shorter repayment term is also met with a lower APR offer compared to repayment terms in the higher range. In comparison, other lenders like Discover could offer fixed APRs not affected by your selected repayment period.

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MONEYGEEK’S VERDICT

Discover wins this round, as it offers a longer, more accessible repayment period to borrowers. However, you might find American Express an ideal choice if you want to pay off a loan much faster, as long as this is lower than Discover’s fixed-rate term and you can afford the monthly payments.

Keep in mind that you won’t want to only consider the repayment period for a loan. Evaluate all aspects of the lender’s offering before applying.

Time to Receive Funds

Lender
Time to Receive Funds

Discover

Next day

American Express

Same day

Discover sends the funds to your chosen bank account the next day after your loan is approved. In comparison, American Express can offer same-day funding.

Fast loan disbursement is ideal for borrowers who need a loan for emergencies. Applying online, which is available from both lenders, is also much quicker than visiting the office to apply for a loan. It even increases the chances of accessing your funds faster.

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MONEYGEEK’S VERDICT

Having a faster disbursement period makes American Express the winner for this category. The time to receive the funds is crucial for borrowers who need the money during financial emergencies. The sooner the fund is released, the sooner you can make use of the money.

Don’t forget to evaluate the loan offerings as a whole before deciding on a lender. Fund disbursement is just one factor to consider.

Final Thoughts

Overall, American Express is the better lender when compared to Discover. It offers lower APRs, a higher maximum loan amount, same-day funding and a lower credit score requirement. However, American Express loans are only available to current customers.

If you aren’t an American Express customer, need a longer repayment term or require a lower minimum loan amount, Discover will be a better option for you.

Keep in mind that your unique circumstances will dictate which lender is ideal for your funding needs. Take the time to evaluate your financial situation to decide which personal loan company is right for you.

Frequently Asked Questions About Personal Loan Lenders

MoneyGeek answered frequently asked questions that could help you better decide between Discover and American Express personal loans.

What documents do I need to provide to personal loan lenders?
How do I know what my credit score is?
Do lenders conduct a hard inquiry?
Are interest rates on personal loans the same for all lenders?
Do lenders charge fees for personal loans?
What are the advantages of applying for a personal loan online?
Is prepayment allowed on personal loans?

Read More on Personal Loans

sources
  • American Express. "FAQ." Accessed September 22, 2022.
  • American Express. "Personal Loan." Accessed September 22, 2022.
  • Discover. "FAQ." Accessed September 22, 2022.
  • Discover. "Personal Loans." Accessed September 22, 2022.
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The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.

Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team.

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