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Discover Private Loans: Small Business Loans

Discover Student Loans may be the right fit for students who are looking for a familiar financial company to service their future private student loans. Discover Student loans have competitive rates, zero fees and may pay for up to 100% of approved educational expenses. In this review we will break down a few other aspects to consider before saying yes to a Discover Student Loan.

Discover Private review
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4.1
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Min. Credit Score
Min. Credit Score Not Disclosed
Loan Amounts
Loan Amount $1K up to the cost of attendance
Fixed APR
Loan Repayment Up to 15 years
Michelle Jackson
Written by:Michelle Jackson
Freelance Financial Writer and Online Business Coach

Discover is a relatively newer financial company that has made a series of well-thought out acquisitions including the Student Loan Corporation formerly owned by Citigroup in 2010. This acquisition would then become Discover Student Loans. For students who might not qualify for federal student loans, limited financial aid eligibility, are looking for better borrowing terms or have parents who prefer to pay for their child’s studies with a private student loan product, Discover offers terms that may be attractive to borrowers.

Summarized Rating

This parameter considers loan term lengths, loan limits, and loan structure optionality (fixed and variable rate offerings). For each loan type offered, each of these features was evaluated using the five-point scoring system. Then, the various scores were aggregated and averaged to establish an overall loan features score.

Discover scores a stellar 4.8 for Loan Features. This is attributable to its highly flexible term lengths and best-in-class loan structure optionality (fixed vs. variable).

Discover Private Pros
Zero Fees
Loans for point in the educational journey
Potentially covers the cost of attendance
Favorable terms for borrowers with strong credit scores
Potential to cover up to 100% of educational expenses
Discover Private Cons
A limited number of incentives
Hard pull on future borrowers credit profile
Credit score minimum isn’t disclosed, making it difficult for borrowers to know if their student loan request will be approved.

What Types of Student Loans

Discover Student Loans offers a wide variety of loans that allow students to address the cost of education regardless of what point they’re at in their education. Discover Student Loans may be a good fit for borrowers needing a limited number of student loans products. These borrowers may also be looking for a way to have more control over the borrowing terms related to their loans.

  • Private Student Loans
  • Parent Loans
  • Consolidation Loans

Discover Student Loans can also be used to pay for almost every point of a student’s academic career.

  • Undergraduate Student Loans
  • Graduate Student Loans
  • MBA Loans
  • Health Profession Loans
  • Law Loans
  • Residency Loans
  • Bar Exam Loans

Private Student Loan Review

Discover Private Student Loan Features

For many future and current students, Discover Student Loans are an appealing loan product. With zero fees and the potential to fund up to 100% of qualified educational expenses, borrowers are also able to set their loan terms. If a borrower prefers a variable interest rate or fixed rate, they have that option.

Students also are given a short repayment grace period of 6-9 months specific to the type of loan that they’ve been approved for. Borrowers can also decide on the loan term that best fits their personal financial situation.


Loan terms

15 years

Repayment period

15 years after 6 month grace period

Loan amount

Minimum of $1,000 and up to 100% of approved school expenses

Loan Structure Flexibility

Variable or Fixed rates

Discover Private Student Loan Interest Rates and Fees

Discover Private Student loans are fee free. Borrowers aren’t charged late fees, origination fees or late fees which can significantly increase the long-term cost of a loan. The Autopay feature also gives students an opportunity to lower the interest rate of their loan by .25%.

Once you’ve chosen the term of your loan, the next step is to decide whether or not a variable or fixed rate is the right fit for you financially. Discover Private Student Loans fixed rate interest rates range from 3.99%-11.59% without the Autopay deduction. Discover Private Student Loans variable interest rates range from 1.29%-10.59% without the Autopay deduction. Interest rates are influenced by a number of factors such as the borrowers overall financial health, credit score and loan term


Borrowing/Origination Fees

None

Prepayment Fees

None

Late Payment Fees

None

Maintenance Fees

None

Fixed Rates

3.99%-11.59% (Autopay lowers rates by .25%)

Variable Rates

1.29%-10.59% (Autopay lowers rates by .25%)

Discover Private Student Loan Qualification Requirements

One of the most challenging aspects of deciding to move forward with a Discover Private Student Loan is figuring out if you’ll qualify for the loan. Discover Student Loans doesn’t disclose some key pieces of information which would help customers applying for a loan. Information such as the minimum credit score, income or the maximum debt-to-income ratio isn’t shared with potential borrowers.


Institution Type & Course Load Requirements

Enrolled ½ time in good standing in a degree program (Associates or Bachelors)

Minimum Credit Score

Not Disclosed

Minimum Income

Not Disclosed

Maximum Debt-to-Income

Not Disclosed

Co-signer/Joint Application Requirements

Co-Signers are allowed (no cosigner release option)

Parent Student Loans

Discover Parent Loan Features

In many cases, the student might not be financially eligible to request a student loan. This may happen because the applicant is too young, doesn’t have established credit and solid financials or the parent/guardian is in better financial standing and it would be easier to get their loan request approved.

Discover Parent loans are similar to Discover Private Student Loans with one small key distinction which is that there it doesn’t have a grace period prior to repaying the loan.


Loan terms

15 years

Repayment period

15 years (no grace period)

Loan amount

Up to 100% of approved school expenses

Loan Structure Flexibility

Variable or Fixed rates

Discover Parent Loans Interest Rates and Fees

Parents or guardians who are researching student loan products may find the no fee structure of Discover Parent Loans very attractive. With fixed rates ranging from 5.49%-13.24% and variable rates ranging 3.99%-12.24% Discover Parent Loans offer a competitive rate in a crowded loan market. There is also an option to lower the interest rate by .25% through the Autopay feature.


Borrowing/Origination Fees

None

Prepayment Fees

None

Late Payment Fees

None

Maintenance Fees

None

Fixed Rates

5.49%-13.24% (Autopay lowers rates by .25%)

Variable Rates

3.99%-12.24% (Autopay lowers rates by .25%)

Discover Parent Loans Qualification Requirements

If you’re a parent or guardian with strong financial standing, Discover Parent Loans allow parents/guardians to take responsibility for their student’s college expenses. Prior to submitting an application, it’s important to note that Discover Student Loans doesn’t disclose the minimum credit score, income or maximum debt-to-income ratio. This information influences the ultimate lending decision that Discover Student Loans makes behind the scenes.


Institution Type & Course Load Requirements

Student enrolled ½ time in good standing in a degree program (Associates/Bachelors or Graduate)

Minimum Credit Score

Not Disclosed

Minimum Income

Not Disclosed

Maximum Debt-to-Income

Not Disclosed

Co-signer/Joint Application Requirements

Co-Signers are allowed (no cosigner release option)

Consolidation Loan Review

Discover Consolidation Loan Features

If you’re looking to consolidate your student loans in order to simplify your finances, Discover Private Loans offer a consolidation loan for qualified students. Consolidation Loans are attractive to many borrowers as oftentimes monthly payments are simplified, monthly payments may potentially be lower and repayment terms may be extended.

All of Discover’s Private Student Loan products require a hard credit pull, so borrowers should prepare their financials with that in mind.


Loan terms

Varies depending on applicant’s requests

Repayment period

10-20 years (no grace period)

Loan amount

Minimum of $5,000 and up to $150,000 (Some degrees may allow a higher consolidation amount)

Loan Structure Flexibility

Variable or Fixed rates

Discover Consolidation Loans Interest Rates and Fees

If you’re looking for a zero fee consolidation loan, Discover Consolidation Loans are fee free. Fixed rates APR rates for loans range from 2.99%-6.74% and have the potential to be lowered by .25% with the autopay option. Even lower interest rates are available for qualified borrowers who choose a variable rate for their loan. Currently, the variable rate ranges from 1.99%-5.74% the Autopay feature will lower the interest rate by .25% for qualified borrowers.


Borrowing/Origination Fees

None

Prepayment Fees

None

Late Payment Fees

None

Maintenance Fees

None

Fixed Rates

2.99%-6.74% (Autopay lowers rates by .25%)

Variable Rates

1.99%-5.74% (Autopay lowers rates by .25%)

Discover Consolidation Loan Qualification Requirements

In order to qualify for a Consolidation Loan applicants must have the following: a strong credit score, proof of income and no more than $150,000 in outstanding loans needing to be consolidated based on the course of study previously pursued.


Institution Type & Course Load Requirements

Currently enrolled students meeting minimum enrollment criteria or students who’ve completed their studies

Minimum Credit Score

Not Disclosed

Minimum Income

Not Disclosed

Maximum Debt-to-Income

Not Disclosed

Co-signer/Joint Application Requirements

Co-Signers are allowed (no cosigner release option)

Discover Student Loans Application Process

For students considering applying for a Discover Student Loan, it’s important to spend some time prior to submitting an application to review your overall financial health. Loan eligibility is based on both a solid credit score, in some cases current income and future earnings potential.

Borrowers should spend some time cleaning up their credit if needed and taking other steps that will make their loan application more likely to be approved. Because Discover Student Loans does a “hard” pull on an applicant’s credit, it’s important to review one’s credit history and overall credit health prior to applying for a Discover Student Loan.

Once that initial step has been taken, it’s now time to submit your application. Have the following documentation on hand prior to beginning the process:

  • Have your Social Security Number on hand.
  • Be prepared to use your full legal name.
  • Proof of legal status. Are you a US citizen, International Student or Permanent Resident residing in the United States?

All financial documentation which includes, but isn’t limited to the following:

  • Pay stubs
  • Tax returns
  • Other financial information detailing what resources you have available to help with educational expenses.

Once you’ve gathered the correct documentation it’s time to begin filling out your loan application online. In order to begin the process you’ll click on the “Apply” button for the type of loan you would like to request

  • Next, you will be taken to a portal that asks if you’re a new or existing customer.
  • At this point if you’re a co-signer you’ll need to Indicate if you’re the co-signer of the loan.
  • Provide school details
  • Personal demographic information
  • Course of study information
  • Review terms and conditions for the loan

Discover Customer Support

One of the most important aspects of choosing a student loan is being clear about the customer experience and the ability to easily communicate with the loan service provider. In the case of Discover Student Loans, customers have several ways to communicate with Discover including via fax if needed.

  • Within the student’s online profile portal
  • There is email assistance available to students who aren’t needing super expedited assistance or are needing to attach documentation to their email.
  • Customers do have a phone option and for those individuals needing TDD assistance that option is available.
  • Currently there is no chat feature on the external facing part of the Discover Student Loan portal.

Overall, Discover Students Loans has a fairly solid range of communication choices available to borrowers needing customer support on their loan.

Discover Student Loans (Online Reviews)

While Discover Financial Services did have Trustpilot reviews, the Discover Student Loans branch of the organization does not have Trustpilot reviews. While this is a bit concerning, this discrepancy is likely due to the scope of Discover’s business and product lines. Discover Student Loans website has over 30,000 reviews with most applicants reporting happiness with the application process and customer service received.

Some applicants did report that the approval process was slower than anticipated, the Good Grades incentive wasn’t enticing enough for most applicants to consider applying for the benefit. There were also some frustrations expressed when adding a co-signer to the loan application and an unexpected lag in communication within the Discover system of the co-signer details.

Discover Student Loans Perks and Bonuses

  • Good Grades Rewards-This is a one-time reward for freshmen who have a 3.0 or higher GPA during high school. This reward is also available to undergraduates/graduates who have a 3.0 grade point average for an academic term that they’ve paid for using a Discover Student Loan.
  • If your Discover Student Loans are in good standing and you’ve graduated within the designated within 6 years of the initial loan disbursement you may be eligible for a 2% Graduation Reward.
  • Automatic Payments and Debit Rewards
  • For students needing additional financial resources outside of loans, Discover Student Loans scholarship directory may be a useful tool.

Final Thoughts

Choosing a private student loan lender can be a daunting process. Discover Student Loans may be a good fit for your future student loan needs. For borrowers with strong credit scores who are needing a straightforward student loan product without a lot of bells and whistles a Discover Student Loan may be worth considering.

FAQ’s

Before moving forward with your loan request, it may be a good idea to review frequently asked questions about Discover Student Loan products.

What is the typical loan term?
For undergraduate loans it’s 15 years and for graduate loans it is 20 years.
What is the typical interest rate for loans?
Interest rates depend on several factors such as student or co-signer income, credit score and whether or not the applicant opts for a variable interest rate versus fixed.
How long will it take to disperse my loans once approved?
This depends on the loan certification process and is specific to each school.

About the Author

 Michelle Jackson

Michelle Jackson

Freelance Financial Writer and Online Business Coach

Michelle Jackson is the host of the podcast "Michelle is Money Hungry." Her goal is to transform people's financial lives through increased financial knowledge.

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