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Discover Reviews: Student Loan Refinancing and Private Student Loans

Discover stands out for its generous options for borrowers who are struggling to make payments.
Sept. 7, 2018
Loans, Student Loans
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We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

Discover Bank, known primarily for its credit cards business, launched Discover Student Loans in 2007. Today, it offers private student loans and student loan refinancing, which it calls private consolidation.

Here we review Discover’s refinance loan; you’ll find a review of its private student loan below.

Review of Discover’s private student loan

Discover student loan refinancing

NerdWallet rating: 5.0 out of 5.0 stars
5.0 stars out of 5

Refinancing student loans through Discover is a good option for financially strong borrowers who may need wiggle room in the future. Discover offers a wider range of repayment assistance programs compared with other student loan refinance lenders, including the option to temporarily reduce payments.

Discover student loan refinancing at a glance:

  • Generous repayment flexibility for struggling borrowers.
  • No late fees.
  • Only 10- and 20-year repayment terms available.
Discover
Reviewed loanStudent loan refinancing
Interest ratesFixed: 5.24% - 8.24%
Variable: 4.87% - 8.12%
Includes autopay discount of 0.25%
Loan terms10 or 20 years
Loan amounts$5,000 to $150,000
Co-signer release availableNo
Can transfer a parent loan to the childNo

How Discover student loan refinancing scores

NerdWallet student loan experts evaluated more than 50 data points across five categories to see whether Discover ranks below average, average or above average compared with other student loan refinance lenders.

Enables faster repayment:
Below average
Lenders score highly if they offer a variety of term lengths and make extra payments easy.

Discloses requirements, limits costs:
Average
Lenders score highly if they limit fees and interest rates, are transparent about their underwriting criteria and allow borrowers to get personalized rate estimates before applying.

Serves range of borrowers:
Average
Lenders score highly if they cater to customers in varying locations, in different financial situations, and with varying citizenship statuses.

Offers payment flexibility:
Above average
Lenders score highly if they offer longer than 12-month forbearance periods, in-school and military deferment, and any other flexible policies that help borrowers during tough times.

Supports customers:
Average
Lenders score highly if they assign borrowers an advisor, offer multiple ways to get in touch, and have in-house customer service. Websites should display full APR ranges, fees and forbearance policies.

How Discover could improve

Discover, like other five-star lenders, isn’t perfect. Discover could improve its student loan refinance product by:

  • Conducting soft credit checks to give personalized rate estimates.
  • Providing a greater number of repayment schedules.
  • Offering a co-signer release program.

Discover student loan refinancing details

  • Soft credit check to qualify and see what rate you’ll get: No.
  • Application or origination fee: No.
  • Prepayment penalty: No.
  • Late fees: No.

Compare Discover’s range of interest rates with other student loan refinance lenders. Your actual rate will depend on factors including your — or your co-signer’s — credit history and financial situation. To see what rate Discover will offer you, apply on its website.

Discover doesn’t disclose specific details about what it takes to qualify for its student loans. Borrowers must pass a credit check, have a positive credit history and have enough income to afford their debts.

Financial

  • Minimum credit score: Did not disclose.
  • Minimum income: Did not disclose.
  • Typical credit score of approved borrowers or co-signers: 95% of Discover student loan borrowers have FICO scores of 660 or higher, according to Discover’s 2017 Annual Report.
  • Typical income of approved borrowers: Did not disclose.
  • Maximum debt-to-income ratio: Did not disclose.
  • Can qualify if you’ve filed for bankruptcy: Yes, though you’re more likely to qualify if the bankruptcy isn’t recent.

Other

  • Citizenship: Must be a U.S. citizen or permanent resident.
  • Location: Available to borrowers in all 50 U.S. states.
  • Must have graduated: No.
  • Must have attended a Title IV-accredited school: Yes.
  • Percentage of borrowers who have a co-signer: Did not disclose.

  • Academic deferment: Postpone payments if you return to school at least half-time.
  • Military deferment: Postpone payments if you’re on active military duty.
  • Public service deferment: Postpone payments if you’re serving in a qualified public service organization.
  • Medical residency deferment: Postpone payments during your medical residency.
  • Forbearance: Postpone payments for up to 12 months if you’re experiencing unemployment, economic hardship, an excessive student loan burden or a medical disability. Borrowers cannot receive 12 months of forbearance consecutively.
  • Temporary interest rate reduction: Get a lower interest rate, resulting in a lower monthly payment, for up to 12 months. Payments are subject to a $50 minimum per month.
  • Temporary payment reduction: Pay just the interest on your loan, subject to a $50 minimum, for up to six months. The loan must be less than 60 days late to qualify.
  • Are loans discharged in the event of death/disability of borrower? Yes.
  • Allows greater-than-minimum payments via autopay: Yes.
  • Allows biweekly payments via autopay: Yes.

  • Loan servicer: Discover.
  • In-house customer service team: Yes.
  • Process for escalating concerns: Yes.
  • Borrowers get assigned a dedicated banker, advisor or representative: No.

How to refinance with Discover

Before deciding on a student loan refinance lender, compare multiple student loan refinance options to make sure you’re getting the best rate you qualify for. In addition to interest rates, compare lenders’ repayment options and the flexibility they offer borrowers who are struggling to make payments.

If you’re ready to refinance, you can apply on Discover’s website.

Discover private student loan

NerdWallet rating: 4.5 out of 5.0 stars

Discover’s private student loans are a good option for borrowers who want flexible repayment options in case they need wiggle room in the future. Discover offers a wider range of repayment assistance programs compared with other student loan lenders, including the option to temporarily reduce payments.

Discover private student loan at a glance:

  • Generous repayment flexibility for struggling borrowers.
  • International students can qualify with a co-signer.
  • Only one repayment term option.
Discover
Type of loanPrivate student loan
Loan terms15 years
Loan amounts$1,000 minimum. Maximum: Your total cost of attendance, minus other financial aid.
Grace period6 months for undergraduates
Co-signer release availableNo
Related productsGraduate student loans, MBA loans, law school loansmedical school loans, residency loans, bar loans.

How Discover private student loan scores

NerdWallet student loan experts evaluated more than 50 data points across five categories to see whether Discover ranks below average, average or above average compared with other private student loan lenders.

Enables faster repayment:
Below average
Lenders score highly if they offer a variety of term lengths and make extra payments easy.

Discloses requirements, limits costs:
Average
Lenders score highly if they limit fees and interest rates, are transparent about their underwriting criteria and allow borrowers to get personalized rate estimates before applying for the loan.

Serves range of borrowers:
Average
Lenders score highly if they cater to customers in varying locations, in different financial situations, and with varying citizenship statuses.

Offers payment flexibility:
Above average
Lenders score highly if they offer longer than 12-month forbearance periods, in-school and military deferment, and any other flexible repayment policies that help borrowers during tough times.

Supports customers:
Above average
Lenders score highly if they assign borrowers an advisor, offer multiple ways to get in touch, and have in-house customer service. Websites should display full APR ranges, fees and forbearance policies.

How Discover could improve

Discover could improve its private student loans by:

  • Conducting soft credit checks to give personalized rate estimates.
  • Providing a greater number of repayment schedules.
  • Offering a co-signer release program.

Discover private student loan details

  • Get a personalized rate before applying: No.
  • Application or origination fee: No.
  • Prepayment penalty: No.
  • Late fees: No.

Compare Discover’s range of interest rates with other private student loan lenders. Your actual rate will depend on factors including your — or your co-signer’s — credit history and financial situation. To see what rate Discover will offer you, apply on its website.

Discover doesn’t disclose specific details about what it takes to qualify for its student loans, but there’s a good chance you’ll qualify if you have good credit or apply with a co-signer who does. Discover also considers other factors, such as area of study and potential income.

Financial

  • Minimum credit score: Did not disclose.
  • Minimum income: Did not disclose.
  • Typical credit score of approved borrowers or co-signers: 95% of Discover student loan borrowers have FICO scores of 660 or higher, according to the company’s 2017 annual report.
  • Typical income of approved borrowers: Did not disclose.
  • Maximum debt-to-income ratio: Did not disclose.
  • Can qualify if you’ve filed for bankruptcy: Yes; you’re more likely to qualify if the bankruptcy isn’t recent.

Other

  • Citizenship: Must be a U.S. citizen or permanent resident. International students are eligible if they apply with a co-signer who is a U.S. citizen or permanent resident.
  • Location: Available to borrowers in all 50 U.S. states.
  • Must be enrolled half-time or more: Yes.
  • Must attend a Title IV-accredited school: Yes.
  • Percentage of borrowers who have a co-signer: Did not disclose.

In-school repayment options

  • Immediate: Begin making full monthly payments as soon as the loan is disbursed. This option will save you the most in interest.
  • Interest-only: Make monthly interest payments while you’re in school and during your grace period. You’ll get a 0.35% interest rate discount for choosing this option.
  • Fixed: Make fixed, $25 payments while you’re in school and during your grace period.
  • Deferred: You won’t be required to make any payments until your grace period ends, but you can choose to make payments if you’d like. Interest will accrue while you’re in school and will capitalize, or get added to your principal balance, at the end of your grace period.
  • Post-school repayment options

    • Academic deferment: Postpone payments if you return to school at least half-time.
    • Military deferment: Postpone payments if you’re on active military duty.
    • Public service deferment: Postpone payments if you’re serving in a qualified public service organization.
    • Medical residency deferment: Postpone payments during your medical residency.
    • Forbearance: Postpone payments for up to 12 months if you’re experiencing unemployment, economic hardship, an excessive student loan burden or a medical disability. Borrowers cannot receive 12 months of forbearance consecutively.
    • Temporary interest rate reduction: Get a lower interest rate, resulting in a lower monthly payment, for up to 12 months. Payments are subject to a $50 minimum per month.
    • Temporary payment reduction: Pay just the interest on their loan, subject to a $50 minimum, for up to six months. The loan must be fewer than 60 days late to qualify.
    • Are loans discharged in the event of death/disability of borrower? Yes.

    Repayment preferences

    • Allows greater-than-minimum payments via autopay: Yes.
    • Allows biweekly payments via autopay: Yes.

  • Loan servicer: Discover.
  • In-house customer service team: Yes.
  • Process for escalating concerns: Yes.
  • Borrowers get assigned a dedicated banker, advisor or representative: No.

  • Reward for good grades: Discover borrowers who earn a 3.0 GPA or the equivalent can get a one-time cash bonus equal to 1% of their loan amount.

How to apply for a Discover student loan

Before taking out a Discover student loan or any other private student loan, exhaust your federal student loan options first. Submit the Free Application for Federal Student Aid, known as the FAFSA, to apply.

» MORE: NerdWallet’s FAFSA Guide

Compare your private student loan options to make sure you’re getting the best rate you qualify for. In addition to interest rates, look at lenders’ repayment alternatives and the flexibility they offer to borrowers who struggle to make payments.

If you’re ready to borrow with Discover, you can apply on its website.

STUDENT LOANS RATINGS METHODOLOGY

NerdWallet believes the best student loan is one you can repay at the lowest interest rate you can get. That’s why NerdWallet’s private student loans ratings reward lenders that offer a variety of loan terms, limit their fees and penalties, and extend borrowers multiple options to avoid default. Points are also awarded for soft credit checks, underwriting transparency and other consumer-friendly features. Use these ratings as a guide, but we encourage you to shop around for the lowest interest rate you can qualify for. NerdWallet does not receive compensation for its reviews. Read our editorial guidelines

5 stars out of 5 — Among the very best for consumer-friendly features

4.5 stars out of 5 — Excellent; offers most consumer-friendly features

4 stars out of 5 — Very good; offers many consumer-friendly features

3.5 stars out of 5 — Good; may not offer something important to you

3 stars out of 5 — Fair; missing important consumer-friendly features

2.5 stars out of 5 — Poor; proceed with great caution

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