Discover offers various student loans, and the APR and repayment term varies depending on what you choose. A Discover student loan can cover up to 100% of your education expenses. Plus, you won’t have to worry about origination or late fees because Discover doesn’t apply these. MoneyGeek’s Discover student loan review explores its features, benefits and drawbacks.
2024 Discover Student Loans Review
Updated: November 5, 2024
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At a Glance: Discover Student Loans
- Discover
- 3.99%–11.59%Fixed APR Range
- 1.79%–11.09%Variable APR Range
- $1,000 up to 100% of college expensesLoan Amounts
- Six monthsGrace Period
- OptionalCo-signer
Although Discover’s business began in the mid-80s, it only started offering student loans 25 years later. It acquired the Student Loan Corporation, later renamed Discover Student Loans, in December 2010.
If you’re an undergraduate looking for private financial aid, Discover is an excellent option if you don’t want to deal with fees on top of your loan payments. You won’t have to pay an origination fee upon loan approval, and there are no late payment fees on Discover student loans.
But, Discover doesn’t give options for repayment terms. All undergraduate student loans have a 15-year term, a longer term length option than other lenders. However, you can select between three payment options. You can choose to make interest-only monthly payments while in school, make fixed monthly payments while studying and during your grace period or begin six months after you graduate (or if your enrollment falls to below half-time).
You can make additional or higher payments to lower your student loan balance without a penalty and pay off your loan at any time without incurring a fee.
You can also qualify for a discount by enrolling in automatic payments or getting good grades.
Pros
- Variable APR as low as 1.79%
- No origination or late fees
- No prepayment penalty
- Can cover up to 100% of college expenses
- Offers a 0.25% discount for automatic payments
Cons
- No term length option
- No co-signer release
- Does not have a prequalification tool
- Does not have a mobile app
- Fixed APR Range: 3.99%–11.59%
- Variable APR Range: 1.79%–11.09%
- Loan Amounts: $1,000 up to 100% of college expenses
- Grace Period: Six months
- Co-signer: Optional (unless an international student)
MoneyGeek Breakdown: Discover Student Loan Details and Requirements
Discover Details
Fixed APR | A 3.99% to 11.59% APR for undergraduate student loans. The APR range may vary by loan type. |
Variable APR | A 1.79% to 11.09% APR for undergraduate student loans. The APR range may change with a different type of student loan. |
Loan Types | Undergraduate, MBA, Health Professions, Law, Residency, Bar Exam, Parent and Consolidation Loans |
Loan Amounts | $1,000 to up to 100% of school-certified expenses |
Repayment Terms |
|
Grace Period |
|
Co-signer Required | Only for international students |
Time to Receive Funds | 3 to 5 weeks after school certifies the loan |
Late Fees | None |
Prepayment Penalty Fees | None |
Perks |
|
Mobile Application | None (Discover’s mobile app is only for credit cards) |
Discover Student Loan Application Requirements
- 1
Be 16 years old or above.
- 2
Pass a credit check.
- 3
A Discover student loan is available to U.S. citizens, permanent residents and international students. If you are an international student and do not have a Social Security number, you must have a co-signer for your loan.
- 4
Working towards an Associate or Bachelor’s degree at an eligible school and enrolled at least half-time.
- 5
Your academic progress must meet a satisfactory level as defined by your school.
Is Discover Right for You?
Every student loan lender is different and offers various features, not all of which may suit your situation. MoneyGeek’s Discover student loan review can help you decide if it is the best choice for your financial needs as you pursue a degree.
Type of Student Discover Is Perfect For
International students should consider Discover because they are eligible for a student loan if someone can co-sign their loan. The only requirement for the co-signer is being a U.S. citizen.
A Discover student loan is also ideal for students who focus on maintaining a high GPA. You can qualify for a one-time cash back reward if your GPA is 3.0 or higher. It amounts to 1% of your loan amount. So, borrowing $20,000 means you receive $200. It might sound small, but it can go a long way in college.
Discover is also an excellent option for financing school expenses if you don’t want to worry about fees and penalties since it does not charge late payment fees, origination fees or a penalty for early payoff.
Who Should Not Choose Discover
Someone who prefers to compare interest rates between multiple lenders before applying for a student loan may want to avoid Discover. There’s no way to check your interest rate with Discover except to apply.
People with less-than-satisfactory credit scores can improve their chances of approval by having a co-signer. However, they need to be comfortable being accountable for the loan until the end of its term. If they are not, it’s better to find a lender that offers a co-signer release option because Discover does not.
Some borrowers may also prefer to have multiple repayment terms available because it gives them more control over the monthly payment amount. With Discover, you only have one repayment term option with an undergraduate student loan — 15 years.
How to Apply for a Discover Student Loan
Discover boasts an efficient private student loan application process. MoneyGeek’s Discover student loan review walks you through the steps you must take to complete your loan application.
- 1
Prequalify
You can only prequalify for a Discover student loan if you have a previously approved loan. Prequalification is not an option if it’s your first application.
- 2
Fill Out Application Form
You can complete Discover’s student loan application form online in minutes. Have the following information ready:
- Social Security number (unless you’re an international student)
- Information about your school, including your course of study and the academic period of enrollment
- How much you intend to borrow
- Your income and expenses (if you pay rent, for example)
- Your address (permanent and in-school)
You can also add a co-signer to your application to increase your chances of getting approved or receiving a lower interest rate. Then you choose whether you want a fixed or variable APR for your loan. Lastly, you declare which payment option you want to use.
- 3
Wait for Approval
You may get a decision in as little as 15 minutes. If you’re approved, you receive a loan agreement.
- 4
Review Loan Agreement
Review the loan documents Discover sends. They contain your interest rate. Be sure to read them thoroughly to understand your financial obligations.
- 5
Sign Loan Agreement
If you’re comfortable with the terms and conditions of your student loan agreement, sign the documents electronically.
- 6
Receive or Direct Funds
Discover submits your loan to your school for certification. The school confirms eligibility and the loan amount to ensure it doesn’t exceed the cost of attendance.
Once your school certifies your loan, it schedules your funds for disbursement. It typically takes between three to five weeks.
- 7
Make Payments
There are three ways to pay for your Discover student loan.
- In-school interest only: You make monthly payments towards your interest charge while in school and during your grace period. It lowers how much you pay in total for your loan and qualifies you for a 0.35% discount.
- In-school fixed: You make monthly payments of $25 while in school and during your grace period.
- Deferred: You don’t start your monthly payments until six/nine months after you graduate. You may also be required to start paying your loan if your enrollment falls below half-time.
What to Do if You Are Rejected From Discover
There are several reasons why a lender denies a student loan application. For Discover, it could be because of your credit score or not having enough credit history. If it happens, there are two things you should do.
First, contact Discover directly. It’s best to understand the primary cause of its decision. If it’s about your credit score, ask if it’s possible to modify your application to make it more acceptable. For example, perhaps adding a co-signer might make a difference.
Next, speak to your school’s financial aid office. You can ask for additional information and resources. They may also be able to provide you with other options to finance your education.
Remember, you can always apply for a loan with another lender, but it’s better to know what you need to work on to avoid a similar outcome.
Frequently Asked Questions About Student Loans
A private student loan can be a great help but includes a lot of financial responsibility. MoneyGeek gathered the most commonly asked questions about Discover student loans for our review to provide more information. They can help you determine whether it’s the best lender for you.
What can I use a Discover student loan for?
You can use a Discover private student loan to cover tuition, room and board, and books and supplies. You can even use it for transportation and personal expenses. Your school certifies the loan amount to ensure you don’t borrow more than you need.
What credit score do I need for a Discover student loan?
Discover doesn’t disclose a specific credit score requirement for student loans. If you have a less than satisfactory credit score, you may choose to have a co-signer. That could increase your chances of approval and get you a lower rate.
How long does Discover take to approve a student loan?
You should know whether your loan is approved or not in as little as 15 minutes, but it may take anywhere between three to five weeks before fund disbursement.
Does Discover have a mobile app?
Discover has a mobile app, but it is only for credit cards, not student loans.
What is the maximum amount I can borrow from Discover?
Discover can cover up to 100% of your school-certified expenses. These include tuition, rent, supplies and books.
Will applying for a Discover student loan affect my credit score?
Yes. Discover conducts a hard inquiry when you apply for a student loan, which may affect your credit score.
Does Discover accept co-signers on student loans?
Yes. Although Discover does not require a co-signer except for international students. However, having a co-signer may help increase your chances of getting approved with a potentially lower rate.
Can I use Discover student loans at my college?
About Christopher Boston
Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.
Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.
sources
- Discover. "Student Loans." Accessed November 5, 2024.
- Discover. "Undergraduate Student Loans." Accessed November 5, 2024.
- Discover. "Repaying Student Loans 101." Accessed November 5, 2024.
- Discover. "Top 5 Application FAQs." Accessed November 5, 2024.
- Discover. "Frequently Asked Questions: Borrower Application." Accessed November 5, 2024.
- Discover. "Apply Online." Accessed November 5, 2024.
- Discover. "Private Student Loans for College." Accessed November 5, 2024.
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Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, credit card issuer, hotel, airline, or other entity. Learn more about our editorial policies and expert editorial team.
Advertiser Disclosure: MoneyGeek has partnered with CardRatings for our coverage of credit card products. MoneyGeek and CardRatings may receive a commission from card issuers. To ensure thorough comparisons and reviews, MoneyGeek features products from both paid partners and unaffiliated card issuers that are not paid partners.