Discover Student Loans Review 2022
| Variable rates | 4.99% – 12.99% |
| Fixed rates | 6.49% – 13.99% |
| Loan amounts | $1,000 up to $16,000 |
| Loan conditions | 20 years |
Loan Eligibility
To qualify for a student loan from Discover, you must meet the following criteria:
- You must be enrolled at least half-time in a bachelor’s or associate’s degree program (or other eligible program if pursuing a graduate, MBA, law, or health professions degree) in an eligible school.
- You must intend to graduate.
- You must be making satisfactory academic progress as defined by your college.
- You must be a US citizen, permanent resident, or eligible international student with an eligible co-signer.
- You must be at least 16 years old at the time of application.
- You must pass a credit check.
Discover does not disclose its minimum credit score or income requirements. However, you will generally need good credit to qualify for a private student loan.
Is loan prequalification available?
Unfortunately, Discover does not offer loans pre-qualification.
Some private student lenders offer loan prequalification, a tool where you can answer a few basic questions and get an informal decision from the lender. This can give you an idea of whether or not a loan has been approved and your interest rate without having to submit a full application or undergo a credit check, which can impact your credit score.
To find out if you qualify for a Discover student loan, you must submit an application and go through a firm credit check.
Loan fees
Unlike some other lenders, Discover does not charge any fees. There are no application fees, set-up fees or late fees. And, it doesn’t impose a prepayment penalty, so there’s no downside to paying off your student loans early.
Loan discounts
Discover offers automatic debit rewards. If you sign up for direct debit for your minimum monthly payment, Discover will reduce your interest rate by 0.25%.
If you agree to pay interest only during your studies, you will also benefit from a reduction of 0.35%.
Refund options
Discover offers 3 loan repayment options:
- Academic interest only: While you’re still in school and for six months after graduation, you must make monthly interest-only payments. By doing so, you will benefit from an interest rate reduction of 0.35%.
- Fixed at school: While in school and during the deferment period after graduation, you must make fixed payments of $25 per month.
- Deferred: If you prefer, you can defer any payment until the end of the deferral period.
The deferral period differs depending on the type of loan you take out, ranging from 0 to 9 months.
Awards
There are 2 possible rewards you can receive:
- Good marks: If you earn at least a 3.0 GPA (or its equivalent), you’ll get a one-time cash reward on every Discover student loan you have. The reward is equal to 1% of the loan amount, so if you have a student loan of $10,000, you will get a reward of $100.
- Graduation: If you graduate less than 6 years after loan disbursement, you may be eligible for a graduation award equal to 2% of your outstanding loan balance. If your loan balance was $10,000 when you graduated from college, you would get $200.
You should always check your eligibility and the rates of other lenders every year to make sure you get the best loan.
Discover is one of the few lenders to offer multi-year approval. With this option, eligible borrowers can pre-qualify for future undergraduate loans to cover the rest of their education needs. When it comes time to take out your next loan, you can use a pre-populated application, and there’s no impact on your credit.
Are co-signers required?
With Discover, co-signers are not required. However, many students do not have an established credit history or sufficient income to qualify for a student loan on their own. If so, asking a friend or relative with good credit and a stable income to co-sign your loan application can help you secure a loan and earn a competitive interest rate.
Loan forbearance and release options
If you are experiencing financial hardship, such as losing your job, you may be eligible for abstention options with Discover. Depending on your situation, you can defer payments for up to 12 months, or Discover can lower your interest rate to make your monthly payment more affordable.
Not all private student lenders offer forbearance options, so it’s important to check hardship programs before submitting a loan application.
Loan approval and disbursement timeframe
Once you submit your information, it may take 3-5 business days for Discover to process your documents. If approved, it may take up to 5 weeks for your loan to be disbursed.
Is student loan refinancing available?
Discover offers student loan refinance for federal and private student loans. You can refinance between $5,000 and the full amount of your student loan (maximum limits may apply). Fixed rate and variable rate loans are available. Repayment terms include 10 years or 20 years.
Customer service
Your student loan officer is important; it’s who you go to if you have any questions or problems with your account or payments.
According to the Consumer Financial Protection Bureau Student Loan Ombudsman’s annual report, the Consumer Financial Protection Bureau handled approximately 1,900 consumer complaints about private student loans from September 1, 2019 through August 31, 2020. Of those complaints, 76, or about 5% —were about Discover.
That said, Discover student loan specialists are available 24 hours a day, 7 days a week. You can reach them by calling 1-800-788-3368, by secure message through your account, or by faxing 1-224 -813-5195.
Apply for a Discover student loan
Before applying for a private student loan through Discover or another lender, be sure to submit the Free Application for Federal Student Aid and exhaust all your federal financial aid options. If you still need help paying for your education, you can continue with your private loan application.
You can apply for a Discover student loan over the phone or online. According to Discover, the application typically takes around 15 minutes to complete.
If you have a co-signer, you must both complete a separate application.
To complete the application, you will need:
- Your social security number
- Selected school information including field of study
- Loan amount requested
- Financial aid expected
- Financial information, including rent or mortgage payments and income
- Permanent address and school address (if applicable)
Once you submit your information, Discover will review your application. In some cases, a representative may contact you to ask you to submit additional documentation before a decision can be made. Once they approve you for a loan, it can take 3-5 weeks for your loan to be disbursed.
pay for college
When it comes to paying for college, it’s a good idea to use all federal scholarships, grants, and financial aid available to you before turning to private student loans.
Discover offers flexible repayment options, allowing you to defer payments until you graduate. Additionally, it allows borrowers in financial difficulty to forbear and defer their payments. However, you may find other lenders that offer repayment terms more suited to your needs, so it’s a good idea to shop around and look at several private student lenders to find the one that suits you best.
final verdict
Discover offers flexible repayment options, allowing you to defer payments until you graduate. Additionally, it allows borrowers in financial difficulty to forbear and defer their payments. However, you may find other lenders that offer repayment terms more suited to your needs, so it’s a good idea to shop around and look at several private student lenders to find the one that suits you best.
Methodology
Investopedia is dedicated to providing consumers with unbiased and comprehensive reviews of student lenders. We’ve collected over 45 data points from over 15 lenders, including interest rates, fees, loan amounts and repayment terms, to ensure our content helps users make the right decision. borrowing decision for their educational needs.
