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Known primarily for their credit cards, Discover Bank also happens to offer student loan consolidation. In fact, they’re one of the best lenders for student loan refinancing, because they don’t charge any fees, and they offer a wide range of borrower protections.
In this guide, we’ll get into everything you need to know about refinancing your student loans with Discover, so you can decide if they’re the right lender for you.
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. Besides their lack of fees (which we’ll cover later), you’ll want to refinance your student loans with Discover because:
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 Rate Discounts
Sign up for autopay and get a 0.25% reduction on your interest rate. As per the Servicemember’s Civil Relief Act (SCRA), service members’ rates are capped at 6% while on active duty.
You have a three-day period after the final disclosure to cancel your Discover consolidation loan without any penalty.
Discover Student Loan Refinance Lack Of Fees
|Prepayment Penalty Fee||None|
One of the great thing about refinancing through Discover is that they don’t charge any fees. There’s 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. You must also:
- Be 18 or older at the time you apply.
- Be a 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 you apply for student loan refinancing with Discover, please keep in mind the following:
- Discover doesn’t offer prequalification, so 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, so you’ll have 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.
Discover is a good option for student loan refinancing if you’re a financially-strong borrower who may need payment flexibility in the future or who has a low-paying public service job. They offer more repayment assistance programs than other lenders, including the option to reduce payments temporarily.
However, if you want to refinance postgraduate loans, or you want lower rates, you’ll want to look elsewhere. For example, Laurel Road is an excellent option for consolidating medical or dental school loans.
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