Discover is primarily known for their credit cards. However, the bank also offers student loan consolidation. Discover is one of the best lenders for student loan refinancing because they offer a wide range of borrower protections without any fees.
In this guide, we’ll break down Discover’s student loan refinancing, so you can decide if they’re the right lender for you.
Table of Contents
- 1 Discover Student Loan Refinance In A Nutshell
- 2 Discover Student Loan Refinance Features
- 3 Discover Student Loan Refinance Lack of Fees
- 4 Discover Student Loan Refinance Requirements
- 5 Discover Student Loan Refinance Limitations
- 6 Bottom Line
Discover Student Loan Refinance In A Nutshell
|Loan Terms||10 or 20 years|
|Loan Amounts||$5,000 to $150,000|
|Loan Types||Variable, fixed|
Discover Student Loan Refinance Features
Discover is an online direct lender that offers loan consolidation for both federal and private school loans. Along with their amazing pricing (which we’ll break down later in the post), Discover offers a variety of features that put them ahead of other lenders:
Repayment Assistance Programs
Borrowers can also take advantage of the following to avoid delinquency:
- Deferment: Postpone payments if you return to school at least half-time, are on active military duty, are working for a low-paying public service organization, or are completing a medical residency.
- Early Repayment Assistance: Extension of your grace period for up to 3 months.
- Payment Extension: Following delinquency, Discover will revive your loans if you make 3 consecutive payments in 90 days.
- Reduced Payments: Just pay the interest amount for up to 6 months.
- Forbearance: Stop payments (interest will continue to accrue) for up to 12 months during times of financial hardship.
- Hardship: Reduce your interest rate for up to 12 months.
Interest Rates Discounts
Sign up for autopay and get a 0.25% reduction on your interest rate. As a part of the Servicemember’s Civil Relief Act (SCRA), service members’ rates are capped at 6% while on active duty.
Discover gives a three-day period after the final disclosure for you to cancel your Discover consolidation loan without any penalty.
Discover Student Loan Refinance Lack of Fees
|Prepayment Penalty Fee||None|
|Late Payment Fee||None|
One of the best parts about refinancing through Discover is the lack of fees. Discover has no application fee, origination fee or late fee. They also don’t charge a prepayment penalty.
Discover Student Loan Refinance Requirements
Discover doesn’t publish specific details about what it takes to qualify for its student loan refinancing. You will have to pass a credit check, have a positive credit history and have enough verifiable income to afford their consolidation loan. Other requirements include:
- Must be 18 or older at the time you apply.
- U.S. citizen or permanent resident.
- Have no more than $150,000 in aggregate student loan debt.
- Be the primary borrower on the loans you want to consolidate.
Discover Student Loan Refinance Limitations
Before applying for Discover’s Student Loan Refinancing, you should be aware of the following:
- Discover doesn’t offer pre-qualification. Therefore, they’ll do a hard credit pull when you apply which can lower your credit score.
- Discover interest rates are relatively high, compared to other student loan providers.
- Discover doesn’t offer cosigner release. You’ll need to refinance again if you want to take a cosigner off your loan.
- Discover doesn’t tell you much about their requirements, such as minimum credit score and debt-to-income ratio.
- Discover doesn’t refinance the following types of student debt: post-graduate loans, loans originated outside the United States, loans for less than half-time enrollment, K-12 loans, and loans that weren’t used for qualified education expenses.
When it come to student loan refinancing, Discover is a great option for those who are financially-strong borrower who may need payment flexibility in the future or has a low-paying public service job. Compared to other lenders, Discover offers more repayment assistance programs, including the option to reduce payments temporarily.
However, Discover does have some limitations. If you’re looking to refinance postgraduate loans or lower rates then you may want to look elsewhere. Laurel Road is a great alternative for consolidating medical or dental school loans. For more ways to save more, check out our post on how save money online and bank guides here on HMB!