SoFi vs. Discover: Which Is Right for You?

SoFi and Discover are both online banks that offer personal loans. Depending on your expenses and the loan features you’re looking for, one may be a better fit than the other. For example, SoFi offers larger loan amounts, more discount opportunities, and potential same-day funding, while Discover offers a lower maximum APR, smaller loan amounts, and no fees. 

You might choose SoFi if you have a very large expense, need the money ASAP, or if you can take advantage of SoFi’s multiple discount opportunities. On the other hand, you might choose Discover if you prefer a true no-fee lender and top-notch customer service, or if your credit is fair but not quite good.

How Discover and SoFi compare

The table below shows how SoFi and Discover compare based on several important loan features. We’ll also cover the benefits and drawbacks of each bank and their suitability for different financing needs.

Overview of SoFi

• JD Power consumer lending satisfaction score: 719 (study average 706)

SoFi is a fintech company and FDIC-insured bank that offers deposit accounts, investments, and other products in addition to personal loans. SoFi offers personal loans up to $100,000 — much higher than Discover’s maximum and most competitors. Repayment terms can extend up to seven years, and several rate discounts are available:

• 0.25% autopay discount
• 0.25% discount for opening a SoFi direct deposit account
• 0.25% discount for allowing SoFi to pay your creditors directly when using your loan for debt consolidation
• 0.50% discount for returning borrowers who meet eligibility requirements

To get SoFi’s lowest APR, you’ll need to have excellent credit and take advantage of the autopay and direct deposit discounts.

Pros and cons of SoFi vs. Discover

Overview of Discover

• JD Power consumer lending satisfaction score: 731 (study average 706)

Like SoFi, Discover is an FDIC-insured online bank that offers personal loans, banking, and credit cards that offers competitive APRs and flexible repayment terms up to seven years. The bank caps loan amounts at $40,000. Discover is one of the few lenders that is completely fee-free, which means no origination fees, late fees, or any other fees.

You can use a Discover personal loan for almost any purpose, including debt consolidation, but the bank restricts you from using your loan funds to directly pay off a Discover or Capital One credit card. If you have credit card debt with either of those issuers, you may be better off with a debt consolidation loan from SoFi. Discover is now a division of Capital One.

Pros and cons of Discover vs. SoFi

Which lender is best for you?

When deciding between SoFi and Discover, consider the following loan features and eligibility requirements. 

APR: Discover

Discover and SoFi have a similar starting APR, but Discover's maximum APR is significantly lower (24.99% vs. 35.49%). It doesn’t necessarily mean you’ll qualify for a lower rate with Discover, since each bank weighs your financial information differently. However, the lower maximum suggests that your rate from Discover might be lower if you don’t have very good or excellent credit.

Both Discover and SoFi offer the option to prequalify without hurting your credit —  check your rate estimate with both banks before choosing.

Loan amount: SoFi (large loans) and Discover (small loans)

SoFi offers much larger loans ($5,000 to $100,000 vs. $2,500 to $40,000), making it a better fit for people who need to finance a large home improvement project, IVF treatment, or other high-dollar expense. On the other hand, Discover would be the better option for a loan of less than $5,000.

Transparency (eligibility requirements): Discover

Discover requires a minimum credit score of 660, but SoFi doesn't disclose a minimum credit score. Similarly, Discover's minimum income requirement is $25,000 while SoFi's isn't disclosed. Unless you're confident that you have excellent qualifications, Discover might be the more accessible lender.

Funding speed: SoFi

SoFi offers same-day funding for some loans, while Discover loans are available as soon as the next business day. If you need an emergency loan, you may get money the same day with SoFi — if you’re approved on a business day and sign your documents before 5:30 p.m. ET.

Related: How Long Does It Take To Get a Personal Loan?

Loan purposes: SoFi

Both SoFi and Discover allow you to use your personal loan funds for a variety of household purposes, but Discover is somewhat stricter about debt consolidation loans. For example, you can’t use a Discover personal loan to consolidate credit cards from Discover or Capital One.

Related: What Can't You Use a Personal Loan For?

Repayment terms: SoFi

Both banks offer repayment terms up to seven years. But SoFi offers a wider range of repayment options than Discover, with terms starting at two years (as opposed to Discover’s minimum three-year term). That said, there’s no penalty for paying your loan off early.

How to apply for a personal loan with SoFi or Discover

While the personal loan application process varies from one lender to the next, you can generally expect to follow these steps when applying for a loan with SoFi or Discover.

1. Evaluate your finances: Check your credit score to get a sense of whether you’ll qualify with either SoFi or Discover. Then, consider your budget to determine how much of a loan payment you can afford. 
2. Prequalify: Check your rate with SoFi, Discover, and a few other personal loan lenders by entering your Social Security number and desired loan amount. This step only requires a soft credit check, so it won’t impact your credit score. Bear in mind that the prequalified APR is only an estimate. 
3. Choose the best option: SoFi and Discover may offer you a choice of repayment terms. Generally speaking, you should choose the option with the lowest APR, as long as you can afford the monthly payment. Also, compare options based on other factors, like the total interest, incidental fees, and the lender’s track record of customer service. 
4. Formally apply: Proceed with the formal application. This typically triggers a hard credit check, which may cause a slight decline in your credit score. You may need to upload documents that prove your identity and income. 
5. Sign your loan agreement: If you’re approved, make sure the final rate and term still meet your needs. After carefully reviewing the terms and conditions, e-sign your loan documents. 
6. Get the money: While the exact timeline will depend on your application and where you bank, you can expect to receive the loan funds in your bank account within a few days.

When you should choose a different lender

Both SoFi and Discover cater to borrowers with good or better credit — generally, those with a FICO score of 670 or higher. If you have fair credit or worse, avoid applying with either since the hard credit pull could drag down your score and you're less likely to qualify, relative to others. Instead, consider lenders like Happen Bank, Happy Money, and Reach. These lenders offered lower-than-average interest rates to fair-credit borrowers based on 12 months of Credible closed loans data. 

Methodology

Credible evaluated 32 lenders across 1,184 data points to choose the best lender overall plus top picks for different borrowers and use cases. Across lenders, we collected data on customer experience and service options, minimum and maximum fixed interest rates, minimum and maximum loan amounts, funding times, loan terms, fees, discounts, third-party reviews, and more.

We assigned a score to each attribute based on how that feature compared with the same feature for every other lender in the set. Scores were weighted according to their relative importance — for instance, maximum origination fee scores received a high weight since loan cost is among the most important factors in determining loan value. Individual attribute scores were then added to determine each lender's overall star rating. 

Attributes were grouped into categories; each category contributed to lender scores as follows: 

• Borrower cost (22.5%): Origination fee ranges and minimum and maximum APRs measure upfront and overall costs and lender accessibility across credit score groups.
• Flexibility (22.5%): Maximum loan terms, number of loan purposes, minimum and maximum loan amounts, and availability of joint and secured loans measure the range of options for loan size, repayment terms, and loan types.
• Eligibility and availability (22.5%): Minimum income requirements, funding speed, minimum credit score requirements, and state availability measure how easily and how quickly borrowers can access personal loans.
• Reputation (15%): Trustpilot, Better Business Bureau, and JD Power ratings measure customer satisfaction.
• Discounts, customer service, and account management (12.5%): Discounts for autopay and direct pay, plus availability of mobile apps and live customer support chat, measure borrower perks and ease of loan management.
• Partner lender data (5%): Data from loans closed by our partners, including average rates, loan amounts, funding time, and eligibility criteria, measure real-world performance and borrower outcomes.

Non-partner lenders were evaluated based on the same criteria but not assigned star ratings. Learn more about how Credible rates lenders by exploring our full personal loans lender rating methodology.