Discover Personal Loans

So, I received an offer in the mail last week for a Discover Personal Loan. I know people have different issues with the different credit card companies, but Discover is one that I've found to be fair (for the most part) throughout the years.

The offer was to borrow from $5K-$25K as a personal loan for debt consolidation (or whatever other reason you need it). The interest rate was going to vary based on your credit rating and the repayment terms started at 36 months and went up from there. They stated that there was no prepayment penalty.

Our current plan is to pay off one credit card by the end of this year and the other around May 2012 (HOPEFULLY!). I thought that this loan may be a good way to get the interest rate down on the 2nd card. We currently have about a $17K balance on that card. About $2K is at 19.24% and $15K at 15.24%.

I went through the application process and was approved for the $17K loan. Unfortunately the interest rate they offered was 16.99%. The person on the phone tried to explain that even though this rate is slightly higher than the rate on the majority of my balance, it would probably be less that I'd pay because the credit cards compound interest daily, versus the loan company which will just add the interest monthly.

I wasn't able to find a comparison calculator online to do the math out but it just doesn't feel right. If they came back with a lower interest rate that would have been different, but it just didn't work out that way. That's okay. I'll stick to our original plan and stay focused on getting there.

Question: Has anyone else looked into consolidation loans? Did it work for you? Would you recommend it?