Discover Bank is a reliable option for private student loans, offering loans for undergraduate, graduate, and pre-professional programs. With no loan fees and significant loan limits, Discover provides competitive interest rates and flexible repayment options. Additionally, Discover rewards students who achieve good grades with cash back. However, borrowers should be aware of the narrow repayment terms.

Reviewing Discover Student Loans: The Pros and Cons

Looking for a student loan is daunting, especially if you’re considering private lenders. In this article, we will review the pros and cons of Discover student loans.

Pros

Zero loan fees — Discover doesn’t charge any expenses that can increase the cost of the loans, like the origination, late, or application fees. They also don’t charge prepayment penalties.
Flexible repayment options — Student loans from Discover come with deferment and forbearance extensions and eased repayment options for borrowers experiencing economic hardship. This kind of flexibility is not typical for private lenders.
Generous loan limits — Discover offers many loans, including undergraduate and graduate ones, that allow you to borrow up to the total cost of your education. However, there are aggregate limits for all Discover loans. Discover ensures you don’t borrow more than you need, and you may not be able to borrow above a certain maximum.

Cons

Cosigners cannot be released — Unlike several private lenders, Discover keeps cosigners responsible for repayment until the loan is fully paid. If a cosigner supports your loan, keep this in mind.
Limited loan terms — Discover repayment terms are limited to 15 or 20 years, while some lenders offer a range of short and long-repayment term options. This means you could accumulate more interest.
No prequalification process — You can prequalify to check if you qualify for a loan without going through a hard credit check. Discover requires a hard credit check, which temporarily affects your credit score.

Discover’s Student Loans: A Comprehensive Guide

Discover offers a wide range of student loan options if you’re looking to finance your education. Whether you’re an undergraduate, graduate, or professional student, there may be a loan that fits your needs. Here is a breakdown of the different types of student loans Discover offers:

Undergraduate Programs

Discover’s undergraduate loans include a unique feature: the multi-year option. This allows you to pre-qualify for loans for future semesters at the same school and degree program. This could save you time and money in the long run. First-year students are also eligible for extra good-grade perks, including a 1% cash reward for maintaining a 3.0 GPA or higher.

APRs: Fixed: 5.49%–13.99%; Variable: 2.99%–12.59%
Loan amounts: Minimum $1,000, maximum up to 100% of the cost of attendance (including tuition, room, board, and books) minus other financial aid
Loan terms: 15 years

Graduate Programs (Masters and PhD Degrees)

Discover’s graduate loans are available for students enrolled at least half-time in eligible master’s or Ph.D. programs. Qualified borrowers can take out up to 100% of their cost of attendance.

APRs: Fixed: 5.49%–14.99%; Variable: 3.99%–13.99%
Loan amounts: Minimum $1,000, maximum up to 100% of the cost of attendance (including tuition, room, board, and books) minus other financial aid
Loan terms: 20 years

MBA Programs

Business school can be expensive, but Discover offers loans specifically for eligible borrowers enrolled at least half-time in a business school program leading to an MBA.

APRs: Fixed: 5.49%–11.99%; Variable: 4.24%–10.99%
Loan amounts: Minimum $1,000, maximum up to 100% of the cost of attendance (including tuition, room, board, and books) minus other financial aid
Loan terms: 20 years

Medical School

Discover supports medical students in various specialties, including allopathy, dentistry, nursing, occupational therapy, optometry, osteopathy, pharmacy, physical therapy, physician assistant, podiatry, and veterinary medicine. Eligible borrowers may qualify for up to 100% of their cost of attendance.

APRs: Fixed: 5.49%–9.99%; Variable: 3.99%–8.59%
Loan amounts: Minimum $1,000, maximum up to 100% of the cost of attendance (including tuition, room, board, and books) minus other financial aid
Loan terms: 20 years

Medical Residency and Relocation

Discover’s medical residency and relocation loans help cover the costs of post-grad medical residencies and internships, including moving expenses. Eligible programs include a variety of graduate health profession programs, as well as veterinary and dental residences.

APRs: Fixed: 5.99%–8.99%; Variable: 4.49%–7.24%
Loan amounts: $1,000 to $18,000 for allopathy, dentistry, optometry, osteopathy, pharmacy, podiatry, and veterinary medicine programs. $1,000 to $5,000 for nursing, occupational therapy, physical therapy, and physician assistant programs.
Loan terms: 20 years

Law School

Discover’s law school loans are available to students at least half-time in a degree-granting graduate program. You can borrow up to 100% of your school costs yearly.

APRs: Fixed: 5.49%–13.99%; Variable: 3.99%–12.59%
Loan amounts: Minimum $1,000, maximum up to 100% of the cost of attendance (including tuition, room, board, and books) minus other financial aid
Loan terms: 20 years

Bar Exam Expenses for Law Students

Discover’s bar exam loan gives recent law school grads or students in their final year of law school resources and time to study for the all-important bar exam.

APRs: Fixed: 6.49%–13.99%; Variable: 4.99%–12.99%
Loan amounts: $1,000 to $16,000
Loan terms: 20 years

Parent Student Loans

Discover offers parent-specific private loans with competitive terms for parents helping with their child’s education. Parent loans can cover either undergraduate or graduate student costs.

APRs: Fixed: 9.49%–14.49%; Variable: 7.99%–13.49%
Loan amounts: Minimum $1,000, maximum up to 100% of the cost of attendance (including tuition, room, board, and books) minus other financial aid
Loan terms: 15 years

Consolidation Loans

Discover’s private consolidation loans offer a simplified payback process and the potential for a lower monthly payment. Borrowers who choose this option should be aware that Discover has longer payback terms for refinanced loans — 10-year or 20-year terms — compared to most lenders.

APRs: Fixed: 4.99%–9.49%; Variable: 3.99%–7.99%
Loan amounts: Minimum $5,000; maximum up to the aggregate amount of your loan debt
Loan terms: 10 or 20 years

With so many different loan options, it’s essential to carefully consider your needs and eligibility before deciding on a loan. With Discover’s competitive rates and flexible terms, you can find a loan that works for you.

Discover Loan Eligibility and Benefits

You may qualify for a private student loan from Discover. To apply, you must:

Be enrolled at least half-time and work towards a degree
Meet your school’s academic progress standards
Pass a credit check – the better your credit rating, the lower your interest rate
Be a U.S. citizen, permanent resident, or international student with a U.S. citizen or permanent resident cosigner
Be at least 16 years old

For many undergraduate loans, you’ll need a cosigner. Discover requires cosigners to remain on the loan until it’s fully repaid.

Interest Rates

Discover offers competitive interest rates with other private student loans, but they tend to be higher than the industry average. You can choose between fixed and variable rates. Fixed rates remain the same throughout the life of the loan, while variable rates may fluctuate based on market conditions within a predetermined range. You may qualify for lower interest rates if you or your cosigner have a good credit score (typically 660 or higher), and speeds may also vary based on the loan amount and repayment term.

Rewards for Good Grades

If you maintain a GPA of 3.0 or higher, Discover will reward you with a 1% cash bonus for each year you take out a loan. This bonus can be spent however you like, and it applies annually.

No Fees

Discover does not charge application or late fees, so every payment you make goes directly toward repaying your loan.

Auto Debit Rewards

You can receive a 0.25% interest rate reduction by enrolling in automatic payments during repayment.

Repayment Terms

While private student loans are generally less flexible than federal loans, Discover offers several repayment assistance options to borrowers. These include payment extensions and reduced payments as needed.

Interest-Only or Fixed Plans

During the in-school repayment period, you can choose between an interest-only or a fixed plan. With the interest-only plan, you make payments on the interest only, not the principal, while you’re still in school. As a reward, you can receive a 0.35% interest rate discount. The fixed plan requires monthly payments of $25, saving you money on interest in the long run. You can also pay off your loan early with no prepayment penalty.

Deferment

You can defer loan payments while in school and during your six-month grace period. Note that this option will accumulate more interest than the in-school repayment plans. You may be able to defer payments for more extended periods during a medical residency, active military duty, or qualifying public service.

Forbearance

If you’re experiencing financial hardship, forbearance allows you to postpone payments for up to 12 months. Interest will continue to accrue during this time. Discover also offers additional repayment assistance options for borrowers struggling to make payments, including the temporary interest rate and payment reductions, early repayment assistance, and payment extensions.

Alternatives to Discover Student Loans

When it comes to private student loans, Discover is one of many options. Here’s how Discover fares compared to some of its competitors.

Earnest

Best for: Those seeking maximum flexibility with their loans.

Earnest offers both original loans and refinancing. One unique aspect of Earnest student loans is that borrowers can set their repayment schedule within certain limits. Repayment options include an extended 30-year term if desired.

Earnest also allows borrowers to skip one payment per year, which could be helpful during particularly tight financial periods.

Like Discover, Earnest offers both fixed and variable interest rates. Borrowers can even switch between variable and fixed rates without incurring fees, although Earnest does perform a hard credit check each time a switch is made.

Eligibility

Pass a credit check.
At least 18 years of age
U.S. citizen or permanent resident
Debt must be from a Title IV accredited college or university.
Debt must be for a completed degree, a degree estimated to complete the next semester, or an incomplete bachelor’s or associate’s degree.

Perks & Benefits

Set your monthly payment.
Skip one payment per year.
Swap between fixed and variable interest rates

Conclusion

While Discover is a solid option for private student loans, other lenders like Earnest offer competitive interest rates and borrower perks. Be sure to research multiple lenders and compare their offerings before deciding.

SoFi

Best for Individuals seeking the best variable rate.

If you’re looking to refinance your student loans, SoFi offers both fixed and variable rates. With rates ranging from 3.99% – 8.24% APR (including an auto-pay discount of 0.25%), SoFi’s rates are lower than the variable rate limits for some of Discover’s loans. Like Earnest, SoFi allows you to customize your repayment plan.

SoFi borrowers can take out loans up to the total cost of their education, and unlike Discover, there are no aggregate limits on how much you can borrow.

Repayment terms are flexible, with loan terms ranging from 5 to 20 years. After two years of making on-time payments, borrowers can apply for cosigner release.

Eligibility Criteria

Must be a U.S. citizen of legal age
Must be employed or have an offer of employment to start in the next 90 days
Must have graduated from an eligible Title IV accredited university or graduate program
Must have at least $5,000 in student loans to refinance (federal or private)

Benefits & Perks

The application process is fast, easy, and entirely online
There are no prepayment penalties
There are no hidden fees

Credible

Best for Individuals seeking to view all their loan options in one place.

Credible is a loan aggregator, meaning it compiles all your eligible loans in one location. The interest rates provided by each lender will vary, but you can view the lowest rate first by using Credible.

In some instances, Credible loans may have higher fixed interest rates than certain Discover loans, depending on your loan and credit eligibility. Nevertheless, Credible does offer prequalification, which allows you to review your rates without impacting your credit score.

Repayment terms are flexible and begin at five years.

Eligibility

Varies by lender

Perks & Benefits

The prequalification process is entirely free and takes only two minutes
No hard inquiry on your credit

LendingTree

Best for People with limited credit.

If you have limited credit, LendingTree may be a good option. As a loan aggregator, LendingTree offers loans from various lenders, so your rates will vary depending on the lender. This is a good option if you’re consolidating, refinancing, or borrowing a loan for the first time.

LendingTree also offers a broader range of loan terms than Discover, with terms ranging from 5 to 15 years or more. Lenders on LendingTree also provide various repayment options, from deferral to immediate repayment, if you want to avoid accumulating interest.

Eligibility

To be eligible for a loan from LendingTree, you must apply for an associate’s degree, bachelor’s degree, master’s degree, or Ph.D.

Perks & Benefits

Fast and easy application
Available to those with little to no credit

Article Rewrite

If you’re considering private student loans, Discover products are worth considering. While the company offers all the basics, its unique features, like grade rewards and flexible repayment options, set it apart from the competition. Overall, Discover is an excellent choice for students needing financial assistance.