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

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.

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 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.

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.

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.

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.

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.

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.

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