Discover Financial Services is pushing further into traditional banking with a line of home equity loans.
Last week, the company started offering home equity loans for customers who want to borrow against their homes to pay for renovations, weddings or college expenses, usually in the range of $25,000 to $100,000, said Gary Harman, vice president of lending and home equity loans for Discover. The fixed interest rates on these loans range from 5.99 to 11.99 percent.
In recent years, Discover has offered mortgages and student loans as it tries to expand its business. “I think this is a logical extension of the direct banking strategy,” Harman said of the home equity line. About 80 percent of Discover cardholders own homes, and with their property values rising, more of them are now interested in borrowing against the equity, Harman said.