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

The best personal loan for you will depend on your financial situation and goals, but if you need cash now, Discover or Upgrade may be suitable options. Though Discover has a lower maximum APR, it’s high minimum credit score requirement may make it challenging to get approved. Because of this, those with fair or bad credit should choose Upgrade.

To help you determine which lender is the best option for you, MoneyGeek’s comprehensive and trusted guide includes key information about each lender’s personal loan terms.

Your particular financial needs and goals will determine which loan is ideal for you. For instance, Upgrade provides a higher maximum loan amount, but Discover has a lower APR range. Before choosing a lender, it’s crucial that you thoroughly compare Discover vs. Upgrade's APRs, credit score requirements, loan amounts and payback schedules.

The annual percentage rate (APR) is the sum of the annual interest that a borrower will be required to pay on their loan, as well as any other fees assessed by the lender. Your credit score, loan type, loan size and the underwriting strategy the lender uses all impact your APR.

Because so many factors are taken into account when assessing your APR, you may not receive a lender’s lowest advertised rate. It’s also important to highlight that APRs are extremely variable and regularly fluctuate.

When assessing your eligibility for loan, lenders place a high importance on a borrower’s credit score. A higher score will make it easier for you to obtain a loan with better terms. By developing sound financial habits, like paying your credit card balance in full each month, you can build credit and improve your score.

Discover's minimum credit score requirement of 720 is relatively high, while Upgrade's is lower at 560. Because Upgrade accepts borrowers with fair and bad credit, its personal loans feature somewhat higher interest rates.

The loan amount range is the minimum and maximum amount a provider will lend to a borrower. While Discover only permits customers to borrow between $2,500 and $35,000, Upgrade has the higher ceiling of the two lenders, allowing borrowers to obtain up to $50,000.

Since Upgrade provides higher loan amounts, it is a better option for urgent and large purchases. However, Upgrade and Discover both provide smaller maximum loan amounts when compared to other lenders that provide loans up to $100,000.

A loan’s repayment period refers to the time period you have to pay back a loan. Lower interest rates are often associated with shorter repayment periods, but other considerations, like your credit score, may impact this.

Discover offers more repayment term options than Upgrade; personal loans from the former feature repayment terms of 36 to 84 months, while the latter has 36 to 60 months. However, a longer repayment term will likely cost you more money, as interest is accrued over the life of the loan.

While most lenders take anywhere from a few days to a few weeks to provide funds, both Upgrade and Discover provide cash faster than their competitors. If you have fair or poor credit and a pressing need for a loan, Upgrade is a better option because of its same-day funding record.

However, unless you need cash now, there’s no significant advantage in choosing one lender over the other; both provide funds within one day of approval.

Although Upgrade and Discover both offer personal loans with swift funding times, Upgrade personal loans stand out as the better option for most people due to its lower minimum credit requirement, flexible loan amounts and prompt fund disbursement. Your particular scenario should still determine how much importance each item is given.

MoneyGeek lists various borrower types who might choose an Upgrade personal loan as the best option for them:

• For borrowers with poor credit. Personal loans from Upgrade are ideal for those who require immediate cash but have fair or bad credit, as the minimum credit score requirement for this lender is 560.
• For borrowers seeking joint loans. Upgrade permits joint loans, which might improve applicants' prospects of loan approval.
• For hesitant borrowers. The prequalification procedure for Upgrade merely entails a soft inquiry. When applying for an Upgrade personal loan, borrowers don’t have to worry about their credit score being impacted.

In the event of debt consolidation, Upgrade pays creditors directly, but this is only advantageous to those seeking a personal loan for this purpose.

Be sure to carefully weigh your options before applying for a personal loan. To assist you, MoneyGeek has provided answers to frequently asked questions concerning personal loan lenders.