Discover
- Home equity loans
- Between 7.24% and 8.86% for first liens. Between 7.99% and 14.09% for second liens
- 680
- New loan applications and loan applications in progress: 855-361-3435
Discover is a financial services company headquartered in Riverwoods, Illinois, outside of Chicago. It offers various types of loans, banking services and credit cards.
Discover offers home equity loans, as well as personal loans, student loans and mortgages. The lender doesn’t currently offer home equity lines of credit, commonly known as HELOCs.
If you’re looking for a home equity loan, the website has easy-to-use calculators that can help you determine your eligibility for a loan amount and interest rate.
Discover made our list of the best home equity loan lenders because of its low fees, range of loan terms and price transparency.
Discover: At a glance
| Types of home equity loan | Home equity loan |
|---|---|
| APR range | Between 7.24% and 8.86% for first liens Between 7.99% and 14.09% for second liens |
| Loan amounts | $35,000 to $300,000 |
| Credit score requirements | 680 |
| Repayment terms | 10, 15, 20 or 30 years |
| Average time to receive funds | Six to eight weeks |
Homeowners with credit scores of 700 or higher will receive the best rates for a Discover home equity loan, although you can qualify with a score as low as 680. Your credit score is the most significant factor lenders use to evaluate whether you’ll pay back your loan, but you must also have sufficient equity built up in your home (as a result of making consistent mortgage payments over the years) to qualify.
Pros
No fees: Discover keeps the process simple by taking care of all extra fees such as the origination fee, closing costs and home appraisal. That means you don’t need to worry about coming up with any cash during your loan application process or having to roll the additional costs into your loan.
Flexible repayment terms: Discover offers loan terms of up to 30 years, which benefits homeowners who need to stretch their financing over a long period of time. You can repay your home equity loan in 10-, 15-, 20- and 30-year terms.
Available nationwide: Discover offers home equity loans to borrowers in all 48 states (excluding Iowa and Maryland).
Cons
Limited loan products: Discover only offers home equity loans. It doesn’t offer HELOCs, which are variable interest rate products.
High minimum loan amount: A Discover home equity loan requires you to withdraw at least $35,000, which may be high for some homeowners, such as those who only need financing for a small project or to consolidate a moderate amount of debt.
Home equity loan options
With a Discover home equity loan, you can borrow anywhere from $35,000 to $300,000, depending on how much equity you’ve built up. You’ll pay the loan back at a fixed interest rate over 10, 15, 20 or 30 years, depending on your preference.
Fees
One of the benefits of a Discover home equity loan is that it takes care of all of the upfront fees that are typically associated with a home equity loan. Discover doesn’t charge any application fees, and you won’t be responsible for an origination fee, title fee, recording fee, mortgage taxes or closing costs.
Plus, as a borrower, no fees means that you don’t have to come up with any money when you submit your application, saving you thousands of dollars right off the bat.
How to qualify
You must have a minimum credit score of at least 680 to qualify for a Discover home equity loan (although the lender prefers to see a score of 700 or higher). In addition to your credit score, which is typically the most important factor lenders consider when determining your interest rate, your rate will also depend on multiple factors such as your verifiable income, debt-to-income ratio and how much equity you have built up in your home.
An average customer can usually borrow up to 80% of the combined loan-to-value ratio of their house, but qualified borrowers can borrow up to 90% CLTV in some cases, according to Discover. Your CLTV is the ratio of all of your outstanding mortgage balances compared to the current appraised value of your property.
Applying for a home equity loan with Discover
You can start your home equity loan application online or over the phone. The Discover website provides a detailed checklist of necessary documents to help you begin your application.
Be prepared to have documentation such as your Form W-2, bank statements and other personal financial information. Once you have all your documents gathered, you can upload them using the Discover loan application portal, where you can manage the rest of the loan process.
Discover says the entire process, from start to finish, can take anywhere from six to eight weeks.
Customer service
To apply for a home equity loan, call or submit your application online through Discover’s website. Once you set up your online account, you can access Discover’s loan portal to keep track of your application. Homeowners can reach customer support on weekdays from 8 a.m. to 12 a.m. ET and on weekends from 10 a.m. to 6 p.m. ET.
Live phone support:
- New loan applications and loan applications in progress: 855-361-3435
- Funded home loans: 855-295-2193
- General support: 855-361-3435
