Discover the 2021 Student Loans Review
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Advantages and disadvantages
Find out about undergraduate student loans
Variable: 1.24% – 10.34%, Fixed: 4.24% – 11.99%
You might like Discover undergraduate student loans if you want to avoid the fees because the lender doesn’t have prepayment penalties, origination fees, or late fees. However, you may be able to find lower fixed rates with competitors.
You may be eligible for Discover’s one-time cash reward of 1% on its student loans if you achieve a GPA of 3.0 or higher for any academic semester covered by the loan. You will need to redeem your reward within six months of loan disbursement or six months after the end of the academic term, whichever is later.
Find out about graduate student loans
Variable: 1.87% – 11.87%, Fixed: 4.49% – 12.59%
Discover graduate student loans work the same as lender’s undergraduate loans. The main difference between the two is the repayment term; graduate loans are for 20 years, while undergraduate loans are for 15 years. You will still get a no-fee loan and be eligible for Discover’s one-time 1% cash reward on their student loans.
How Discover Student Loans Work
Discover offers student loans for different types of degrees, including undergraduate, graduate, law school, MBA, and health professions.
To be eligible for a loan, you must meet the following conditions:
- Be enrolled at least half-time in a program (undergraduate, graduate, law school, MBA, health program) at an eligible school
- Pursue a diploma
- Make adequate academic progress as determined by your school
- Be a U.S. citizen, permanent resident, or international student (international students must have a co-signer who is a U.S. citizen or permanent resident)
- Be 16 years of age or older when you apply
- Pass a credit check
Before applying for a private student loan, including with Discover, be sure to consider your federal student loan options, as you can often find more favorable terms and better protections from the government.
To contact customer service, call the lender 24 hours a day, 7 days a week. The company has both a US number and an international number. If the call isn’t the best job for you, you can also send a mail to Discover’s Utah address.
Discover has a well-rated app that received 4.8 out of 5 stars on the Apple Store and 4.6 out of 5 stars on the Google Play Store. If you want to manage your loan on the go, this might come in handy.
Is Discover trustworthy?
The Better Business Bureau has ranked Discover as a A + in reliability. A good BBB rating indicates that the company is honest in the way it conducts its business, responds effectively to consumer complaints, and is truthful in its advertising.
However, you won’t necessarily have a positive relationship with Discover just because the company has a top notch BBB rating. Ask your friends and family about their experiences with the lender and read customer reviews online.
Discover has no recent scandals. You may feel comfortable choosing Discover as your student loan lender because of its clean history and excellent BBB rating.
How Discover Student Loans Compare to Similar Lenders
Discover’s rates are similar or higher than those offered by comparable lenders, although the rates depend on your creditworthiness and other financial factors. Here’s how Discover stacks up against the competition:
Check out the exam versus the College Ave exam
You can get a lower minimum APR on your loan with College Ave than with Discover, so if your credit is in good shape, College Ave might be the best choice.
College Ave has a faster application process than Discover, as you can get a rate in minutes with College Ave, and it will take around 15 minutes with Discover. This might not be a problem, but if you want to quickly compare multiple rates, College Ave might be a better place to start.
Discover offers a unique benefit that College Ave does not. Discover offers a one-time cash reward of 1% on its student loans if you achieve a GPA of 3.0 or higher during any academic semester covered by the loan. You must redeem your reward within six months of your loan disbursement or six months after the end of your academic term, whichever is later.
You will not pay any origination fees, prepayment penalties or late fees with either company.
Discover vs. Ascent Notice
Discover has a better range of APRs on graduate loans than Ascent. The minimum rate is about 1% lower with Discover than with Ascent, although the maximum rate is almost the same. Ascent has a better range of undergraduate loans with a minimum rate about 0.75% lower than Discover. The maximum rate with the two companies is about the same.
Ascent offers five repayment terms with co-signed loans, five, seven, 10, 12 or 15 years. Discover has only one standard term available, 15 years.
You may be eligible for a 1% cash reward with Ascent and Discover. Neither company charges origination fees or prepayment penalties, but Ascent may charge late fees, while Discover does.