Using 30 day guarantee on Discover Personal Loan?

Discuss anything related to interest rates & fees, like balance transfer offers, low rate cards, annual fees, etc.
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Capital
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Using 30 day guarantee on Discover Personal Loan?

Postby Capital » Sun Jan 15, 2012 10:17 pm

I was recently solicited an offer for a Discover personal loan up to $25,000 as low as 7.99% APR. Although I have no need for such a loan, I noticed a 30-day guarantee clause in the terms and conditions that provides for the cancellation of the loan without interest or penalty within 30 days. My question: could I apply for the loan then return it in ~25 days so that it gets reported on my credit report, but then closed as a paid account? Would this increase my score?


eric c
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Postby eric c » Mon Jan 16, 2012 2:09 am

Did you find out anything about this? My goal is to get approved for a jumbo mortgage within next 3 months. Have current income that is high enough but lack of both income history and loan history, don't know if I will be able to pull it off.

Capital
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Postby Capital » Mon Jan 16, 2012 7:56 pm

If you have the income and job security necessary to keep that jumbo loan current, then you should have no problem getting approved. Credit history will only come with time and besides, for mortgages, this will only affect your interest rate and not necessarily your chances of getting approved. This is because a mortgage is a secured loan. Meaning your loan is secured with collateral, your house. I'm not too much more familiar with these types loans, but that's my two-cents.

ooxs
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Postby ooxs » Wed Jan 18, 2012 10:26 pm

This loan will not be reported after 25 days, i had one and it took about 3 months for the loan to show up. However you can always pay it off in full, if you can restrain yourself from spending lol. Additionally they offer you 7.99 but regardless of your credit, the final rate is always higher, 14% for me.

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Pete838
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Postby Pete838 » Thu Jan 19, 2012 4:42 pm

I've heard a lot of bad reviews on these loans. I received an offer from them and briefly considered it as an alternative to a Sallie Mae supplemental student loan with a high rate. The two biggest complaints were:

  • They advertise a low rate (<8%), but even with a well above average credit score they will lock you at 12-14%
  • Interest on the loan is not calculated as interest. It is charged as a fee and front loaded, so even if you pay the 5 year loan off in 31 days, you still pay the entire 5 years worth of interest as a "finance charge".
Ultimately I decided against the loan. If you decide to apply for it, make sure you read and understand the fine print.
Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.
Ronald Reagan

ooxs
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Postby ooxs » Fri Jan 20, 2012 12:08 am

Wise choice Pete, they offered me 18% (Fico 750s) they performed some magic after i asked what they were smoking and lowered it to 14%. At some point you have to draw the line, if you are having issues before you started, chances are you will be in the red after.

It didn't add up for me so i paid it back and walked away.



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