Discover Student Loans Review

Learn all about the pros and cons of Discover undergraduate and graduate student loans, refinancing, application process, interest rates and repayment plans from here.

Updated by Gowtham Ramesh on 5th July 2019

The increase in the expenses for education has increased alarmingly for the past few years. This results in students opting for loans to pay for their high college expenditures. There are a lot of students who have moved towards private education loans to cover the expenses and one among the many big private lenders is the Discover Bank. It offers competing choices for private student loans.

The financial crisis of 2008 made many private student loan providers to move out of the market. Discover hence started to offer its private loans to a wider reach. As a result, it grew to become one of the biggest lenders in the industry.

It provides loans for undergraduate and graduate students and also offers consolidation of loans with a decent interest rate, term, and limits.


List of Contents


Overview Discover Student Loans

Discover College Loans are offered by Discover Bank. Most people know Discover from its popular credit card, Discover Bank is one of the biggest student loan providers in the market.

It grants private students with loan choices for various types of students in Undergraduate, Graduate, MBA, Law, Residency and Bar Exam levels. The total amount of the loan is limited by applying based on the program you have opted for.

The following are the rates, terms, and amounts offered by them.

Description Rates and Percentage
Fixed Rates 5.99% – 12.99%
Variable Rates 4.12% – 11.87%
Loan Terms up to 20 years
Loan Amounts $1,000 to 100% of school-certified college costs

Let us discuss each Discover Student Loan in detail.


Undergraduate Student Loans

Discover offers private loans to undergraduate students who are listed as qualified and have attended accredited college or university for at least part-time. It has various determinants to be considered and noted with regards to undergraduate student loans such as Interest rate, repayment terms, and fees.

Interest Rates

The loans that are issued by the Discover are based on the creditworthy of borrowers and other several factors, where the applicants who have higher competitive interest rates can qualify for borrowers. The variable rates range from 4.12% - 11.87% APR. The fixed rates range from 5.49% - 12.99% APR.

The lower rate consists of interest only repayment discount which is granted as an award for Auto Debit program where a reduction of 0.25% point is applicable.

Discover undergraduate and graduate student loans, refinancing and application process and payment plans from here

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The variable interest rates are lesser than the fixed rates at times but could be subjected to irregular fluctuations when the market fluctuates. The fixed rates start much lower for the most creditworthy applicants and can go up to 12.99% APR for the lower qualified borrowers. If you opt for a variable rate Discover loans then you need to be aware of the fluctuations.

Fees, Loan limits and Repayment Options

Undergraduate student loans usually have a 15-year repayment term. You do not have any fees on the loans such as the fees for application, origination, prepayment penalties, or late fees.

Repayment options - Discover student loans of undergraduates have 3 options which are mentioned below.

1 - Fixed payment plan 

It needs a monthly payment of $25 when you are in school. The remaining principal and interest payments are made after school ends.

2 - Deferred payment 

It does not require any payments for six months until or when the borrowers leave from part-time attending status or graduates.

3 - Interest-only 

It permits borrowers to pay any of the interest as shortly because monthly payment of interest is made even when you are in school.


Graduate Student Loans

Discover offers private loans to Graduate students who are listed at an accredited college or university for at least part-time. The different interest rates, loan limits, fee details, and repayment options are as given below.

Interest rate

The interest rate which is offered by the graduate students can be variable or fixed. The variable interest rates start around 4.12% and can go up to 11.87% APR while the fixed interest rates start around 5.49% and can go up to 12.99% APR

Fees, Loan limits and Repayment options

Graduate student loans usually have a 20-year repayment term. You do not have any fees on the loans such as the fees for application, origination, prepayment penalties, late fees, or funding fees.

The loan limits are based on the school certification total cost and the minimum amount is set at $,1000.

Repayment options - Discover student loans of graduates have 3 options which are mentioned below.

1 - Fixed payment plan

It needs a monthly payment of $25 when you are in school. The remaining principal and interest payments are made after school ends.

2 - Deferred payment

It does not require any payments for six months until or when the borrowers leave from part-time attending status or graduates.

3 - Interest-only

It permits borrowers to pay any of the interest as shortly because monthly payment of interest is made even when you are in school.


Residency Loans

Looking into medical schools, loans are offered to medical students while they are in residency programs. Even though most of these programs pay, they fail to pay for everything including the housing and other living costs. These Residency Loans can help them with all the uncovered cost of residency, internship, relocation, and exam review.

There are some limitations to residency loans when compared with other products. You can only borrow $18,000 for Allopathy, Dentistry, Optometry, Osteopathy, Pharmacy, Podiatry and Veterinary Medicine, and $5,000 for Nursing, Occupational Therapy, Physical Therapy, and Physician Assistant.

These loans generally do not need a cosigner if you have a good credit history. In case you do not, you will need a co-signer. During residency, you can defer the payments for a period of 5 years. You can also take the option of making $25 per month at this time.

The repayment period of these loans is up to 20-years. The variable interest rates start around 5.87% - 8.87 % APR while the fixed interest rates start around 6.99% - 9.99% APR. You can also avail of a reduction of 0.25% point when you opt for an auto-debit program.

Learn all about the pros and cons of Discover private student loans for residency and its benefits and other options.

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It might be possible to avoid taking loans while in the residency. Residency salaries may not be much but they should be covering a huge part of the expenses which are associated with the residency.

Looking for negotiating for a relocation package will be costly and might leave you in debt. If you are qualified for the relocation package that does not mean that you should turn to loans too quick. Look for the options and opening a 0% APR credit card.

Use the credit card to finance the expenses for a few months and then work towards repaying it. Residents should also consider refinancing their student loans. The offers and perks to residents and doctors may help them in saving a lot of money.


Bar Exam Loans

In the case of law students, situations are tough with living expenses and other costs stacking up during the study. This can be made simple by the bar exam loans. It helps with their bar exam cost at a low-interest rate.

It allows you to take $16,000 for bar exam preparation. It is available for current law students and it has a grace period that can be extended up to 6 months after graduation.

This loan may not need a cosigner if you have a good credit history. Otherwise, you will require a cosigner with a good credit history.

The loan has a repayment period of 20 years.

The variable interest rate is around 6.27% - 11.87 % APR and the fixed rate of interest is around 7.39% - 12.99% APR. You can avail of the reduction of 0.25% point when you enroll in an auto-debit program.


MBA Loans

In the case of MBA students, a special loan is offered to cover all the costs of attendance.

It allows you to take 100% of your school-certified cost of attendance and the minimum amount for the loan is $1,000. The money will be delivered directly to your school. You get cash reward on your Discover loans when you score 3.0 GPA or more. The maximum term provided to the loan is 20 years.

They offer variable and fixed interest rates. The variable rate starts around 4.12% and can go up to 11.87% APR. The fixed rate of interest starts around 5.49% - 12.99% APR. You get a reduction of 0.25% point when you enroll yourself in the auto-debit program. Variable rates might change every quarterly in the span of the loan life.


Health professionals Loan

Discover offers '0' fees for private student loans for students who are graduating in Allopathy, Osteopathy, Dentistry, Nursing, Pharmacy, Physician Assistant, Occupational Therapy, Optometry, Podiatry, or Veterinary Medicine.

It offers to pay 100% of the cost of attendance for the certification. The minimum amount of loan is set at $1,000. The money is sent directly to the school so you cannot borrow more than what you need. A co-signer might be needed in case you have a low credit score or no history of credit. You can add a creditworthy cosigner.

It offers variable and fixed interest rates. The variable interest rates start around 4.12% - 9.87% APR. The fixed interest rates start around 5.49% - 10.99% APR. You also get a 0.25% point reduction if you get listed in the auto-debit program. You get a cash reward of 1% of your loan if you have a GPA of 3.0 or more. The maximum term provided to the loan is 20 years.


Law Loans

Law Loans is a special loan program made for law students in order to help them achieve their degree without financial stress.

It offers to pay 100% of the cost of attendance for the certification. The minimum amount of loan is set at $1,000. The money is sent directly to the school so you cannot borrow more than what you need. A co-signer might be needed in case you have a low credit score or no history of credit. You can add a creditworthy cosigner. By applying with a creditworthy cosigner, you may get easier loan approval and a lower rate of interest.

It offers variable and fixed interest rates. The maximum repayment term is 20-years. The variable interest rates start around 4.12% - 9.87% APR. The fixed interest rates start around 5.49% - 10.99% APR. You also get a 0.25% point reduction if you get listed in the auto-debit program. You get a cash reward of 1% of your loan if you have a GPA of 3.0 or more.


Trouble paying student loans

The company wants its borrowers to succeed and repay their student loans. In order to so, they have created a number of programs to help them to avoid default. Further, they have offered six to nine months of deferment in school programs and the following are some of the plans of Discover offers.

Early repayment help 

A three-month extension of your grace period.

Payment Extension 

If you fell into delinquency, Discover can revive your loans if you create three consecutive payments in ninety days.

Reduced Payments 

Reduce your payments to simply the interest quantity for 6 months.

Forbearance 

Payments stop for 6 months, however, interest continues to accrue.

Hardship 

Discover reduces your charge per unit for 6 months.


Consolidation

Discover offers refinancing loans under its consolidation program for equipped borrowers. You can refinance federal and private education loans into one new loan. Refinancing is the process of terminating the old private loans and/or federal loans to a new loan with a lower interest rate along with favorable repayment periods.

Description Rates and Percentage
Fixed Rates 5.74% – 8.49%
Variable Rates 4.74% – 7.74%
Loan Terms 10 or 20 years
Loan Amounts $5,000 – $150,000

Consolidation and refinancing can be a good option when you are looking to make a single payment on the student's loan with the option to get lower monthly payments. You are most likely to get it done once they have started to work in a full-time job with an approved credit score and records of income.

Interest Rate

Discover private student consolidation have variable interest rates starting around 4.62% - 7.62% APR. The fixed interest rates of loan for a 10-year repayment period are around 5.74% - 8.49% while for the 20-year period they start around 5.99% - 8.49% APR.

Fees, Loan limits and Repayment Options

The repayment term for consolidation of a student loan under Discover loan is either 10 years or 20 years. The consolidation/refinancing loan does not have any fee for origination, application or prepayment.

It has a limit of $150,000 on the loan.

The consolidation of loans with Discovery is open for students who are graduated or leaving the degree program. The only option of repayment that is available is full principal and interest which gets started after 30 days from the time of the loan is financed.


Pros and Cons

The benefits and drawbacks of Discovery student loans are given here.

Pros

  • The borrower is able to receive 100% of their school-certified cost of attendance without having to pay any fees

  • Students who have a good grade with 3.0 GPA or higher are able to get a cash reward for 1% of new undergraduate or graduate loan which they have borrowed

  • They have good customer service

  • They also have pride in having only U.S. based student loan expert

  • The application process is fairly simple ad can be completed within 15 mins

Cons

  • The significant downside of the loans is having the minimum numbers of repayment periods provided to borrowers

  • Undergraduate borrowers usually have a 15-year term, indifferent to the amount borrowed

  • Graduate borrowers usually have a 20-year term

  • Consolidation offers 10 or 20-years of the repayment period

  • They have different provision from federal student loans such as income-based repayment, forbearance, and forgiveness cannot be found with private student loans from Discover


How to Apply

The application for a Discovery student loan can be done online and is quite simple. You need to give your information about the current loans along with your income, residence, social security number, and date of birth.

After getting this information through the application, it will process it and review it to make a decision within a few days. The loan fund for undergraduate and graduate students are paid to the school directly. In consolidation, the loan is processed and sent to the borrower's current student loan servicers in order to make payoffs.

If you are trying to be a co-signer on behalf of your child then you can look and complete the application by yourself first or you can start with the cosigner application. If the student fills the application form first, then Discover will send them a key code of cosigner where it can be used to start the cosigner application.

In order to complete the application, you will need your social security number, employer information and the financial information where it consists of rent or mortgage payments and the permanent address. The website will make you enter the information and you can receive a credit result within 15 minutes even lesser


FAQ's

  How long does it take to get a student loan from Discover?


Usually, they will send the money to the college without any interference of others. Where it generally takes around 1-2 weeks before the money is transmitted to you back. From the date of the loan is approved this takes place. It can even take 3-10 weeks for you to get the student loan money under the private student loan.

  Are Discover students loan a good idea?


Discover is the biggest market leader in the private student loan. IT has no fees, interest rate of low and other options such as forbearance but, it\'s hard to get one. Borrowers required to have a great score or the cosigner to get a loan. The good thing is that it is on a credible platform.

  What type of loan is a Discover student loan?


Discover college loans are provided by Discover banks where most of the student loans are provided by them making them as the biggest lender on the market and further it\'s known for its credit cards wisely. It even offers private student loan options for many of the students.

  Can I get a discover student loan without a cosigner?


Generally when you don\'t have a good application or a cosigner at your side. The interest rate of yours will be higher as lenders see you as a risk rather a borrower. To get a private loan without a cosigner is possible but you need to do is look for the credit score and other essential to get a loan call them or meet in person to get all the information that you are required to get a loan without co-signer.

  Can you pay off Discover student loans early?


Looking for Paying off your student loans as soon as possible so you can save some money. You can select this in the process of application where you need to be in school and in the grace period. While starting to make the process of payments while you are in school in that you pay a little and most will go towards the principal balance in the repayment. The less interest and reduce the cost of your loan.

  How do Discover loans work?


The loans of Discover can be used for other purposes too. Where it works particularly good for the debt consolidation as it lowers the rates, Makes direct payments of the creditors and gives you the flexibility of repayment terms and the company even provides you free tools to get manage of your debts and get an estimate of monthly payments on your personal loan site.

  How do I apply for a Discover student loan?


The process is very simple and can be done under 15 minutes making it easy for everyone and trying to be on real-time by serving it on online.

Apply for it under their site it will take you around 15 minutes or even lesser. Providing a cosigner if it required in the student loan might be an option to apply with a credit-worthy co-signer. Choose your interest rate type and the repayment option and sign in and accept the loan of yours.

  Can I consolidate my discover student loans?


You get the option to consolidate your federal and private student loans into a single loan making convenient to do Monthly payments at a lower rate. Where you need to be qualified for consolidation of loans on your own. If you take one to apply with a co-signer who has creditworthiness where you might end with a lower rate of interest.

  Is Discover student loan a federal loan?


No, Discover student loans are in responsible for borrowing and encouraging students to use the grants at maximizing, other benefits of financial aid and scholarships. When you are looking and comparing at the options that are available you might find the private student loans are much competing than the federal student loans.

  Can you defer Discover student loans?


You might be able to postpone the private loan of your payments under the deferment option. During this deferment period, the interest will is rising and accruing on your loans. Where you can choose to pay the interest that you are getting and then it will add any unpaid interest of your principal balance at the end of your deferment period.