10 Things You Should Know About Discover Student Loan Refinancing

Written by: Matt Kuncaitis
Updated: 4/08/21

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Student loan debt is something many college students, recent graduates, and parents often worry about. You may wonder if refinancing your student loans can make your life a little easier, saving you money and, hopefully, resulting in lower monthly payments. There is a lot to consider before moving forward with refinancing your student loan debt. The good news is that there’s no deadline to apply, so you can take your time to make the decision that is right for you.

If you are ready to move forward with refinancing your federal or private student loans and are looking to work with or already working with Discover, this guide will walk you through everything you should know before submitting your application. As you read through this guide, you’ll learn more about those important considerations and find answers to some common questions.

Can You Refinance With Discover?

Discover offers student loan refinancing through their private consolidation loan program, where you can refinance anywhere from one to all of your student loans. You can include your federal student loans if you’re refinancing multiple student loans, but you might want to think hard before doing so as you could lose significant borrower protections and benefits offered by the federal government.

If you’re ready to begin the refinance process, however, there are some things you need to know, including Discover’s eligibility requirements and offers (e.g., interest rates, benefits, and payments). We’ll discuss each point below.


Requirements to apply for the Discover Private Consolidation Loan:

To qualify, the borrower must:

  • Be a US citizen or permanent resident with a US-based address.
  • Be at least 18 years old at the time of loan application. 
  • Pass a credit check.
  • Have no more than $150,000 in aggregate student loan debt. Higher limits may apply for specific fields of study.
  • Have verifiable income sufficient to support your debts and show a positive repayment history.
  • Be the primary borrower on the loans you want to consolidate.

Some loans are not eligible to refinance. These include:

  • K-12 education loans
  • Postgraduate loans
  • Loans that were not used for intended purposes (e.g., nonqualified expenses or those that were taken out while enrolled less than half-time in school)
  • Loans outside of the U.S.

One nice feature of Discover refinancing that many loan lenders don’t offer is the ability to refinance your loan while you are still in school. However, if you consolidate during any of your loans’ grace periods, you will lose the grace period and need to begin making payments.


Discover has flexible options for consolidated loans. Based on your creditworthiness, your repayment terms will include 10 or 20 years. There is no prepayment penalty, which means you can make additional payments on your loan and lower the total cost to you. You are also able to refinance even if you have not received a degree.

In addition, you can choose between variable and fixed interest rates. Variable rates are anywhere between 1.87% and 5.87% APR*. Fixed rates are anywhere between 3.49% and 6.99% APR*. Your rate will be determined by your credit check. We’ll talk more about the protections Discover offers for individuals facing financial hardships (the company offers more options than many others).

Refinancing Minimums and Maximums

Ultimately, how much you are able to refinance will be determined by your credit report, and having a good credit history will help you in this department. You may be able to refinance up to the total amount of loans you have outstanding. However, the minimum loan amount that Discover offers is $5,000 and the maximum is $150,000. Depending on your field of study, though, different maximums may apply.

It is important to note that you are not required to refinance all of your loans. Before you decide, take some time to compare rates and determine what the best option is for you.

Repayment Plans

Before you begin your application, you should know that Discover does not offer a pre-qualification application, which means you will not benefit from an initial soft credit check (which does not impact your credit history). Once you submit your application, you will be subjected to a hard credit check to determine eligibility and rates. No pre-qualification also means you will not receive an initial rate quote, which will make it harder to compare your loan options.

The loan application is fairly quick. Discover says it can be submitted in 15 minutes or less. Discover then works with you to decide what loans you want to refinance and the total loan amount. Once you are approved, your first payment on the new loan will be due within 30 to 45 days. While Discover only has two options to choose from for the life of the loan, there are multiple repayment options to work with, even if you are struggling to make payments.

Discover offers deferment options, including if you return to school, are on active military duty, are in public service (check with Discover for details on who is eligible), or in a residency program for a health care profession. They also have various options if you are having trouble making your monthly payments.

Interest Rates

When you refinance your loan(s) with Discover, you will be able to choose between a fixed or variable interest rate. Keep in mind that a variable rate may appear to be lower, but your rate may change over the course of the loan. Rate changes may even occur quarterly. A fixed rate loan means your interest rate stays the same for the entire life of the loan.

The Discover student loan refinance rates are as follows:

  • Variable: 1.87%-5.87% APR*
  • Fixed: 3.49%-6.99% APR*

*Lowest APRs shown for the Discover Private Consolidation Loans are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include a 0.25% interest rate reduction while enrolled in automatic payments.

Where, exactly, your loan will fall in those ranges depends on a few factors. The first, of course, is if you choose a variable or fixed rate. After that, the rate will be determined by your credit history and the history of any co-signers you may have.

Interest Rate Discounts

One benefit that Discover provides is its auto debit reward. When you enroll in automatic, monthly payments, you will receive an interest rate reduction of 0.25%. Your autopay payments may be made from a checking or savings account.

Co-Signer Policies

A co-signer on a loan shares the responsibility for loan repayment with the loan applicant originator. It’s a good option for a student or recent graduate who is still building up their credit. It is also a good way to obtain a lower interest rate (if your co-signer has an excellent credit history).

Discover student loan consolidation applicants are allowed to use a co-signer. Co-signers must be U.S. citizens or permanent residents and at least 18 years old. Their credit history will be pulled and reviewed. Co-signers should also be aware that, unlike some other programs, there is no co-signer release — which means they will remain the co-signer for the life of the loan.

If you plan to include a co-signer, you will first need to submit your application. Once that is done, you will receive an access code for your co-signer to complete their part of the application.

Application and Origination Fees

Discover student loan consolidation has “zero fees,” meaning there are no application or origination fees. This can be a nice savings compared to some other loans.

Late Fees

Late fees are also included in Discover’s “zero fees” policy. However, just because they don’t charge a late fee should not mean you can miss payments. Skipping payments can lead to damaged credit. It can also mean you default on the loan, which may lead to wage garnishment.

Forbearance and Deferment Options

We mentioned earlier how Discover’s deferment program works for eligible individuals. There are a few other options we should mention, especially for anyone who thinks they will have trouble making payments.

  • Early Repayment Assistance Program: This is a three-month deferral of payments. You may be eligible for this program if you are within the first three months of your repayment period.
  • Payment Extension: This program allows you to make three minimum monthly payments within a 90-day time frame. You may be eligible if you have been in repayment for more than six months, your loan is 60 days or more past due, and you have not been in forbearance for six months.
  • Reduced Payment: With this program, the minimum monthly payment is reduced for six months. You may be eligible if your loan is less than 60 days delinquent.
  • Forbearance: This is when you postpone loan payments for up to 12 months. The 12 months will not be consecutive, however; you will need to make some on-time payments to remain eligible for forbearance. You may be eligible if you are experiencing hardship.
  • Hardship: Your interest rate is temporarily reduced for six months. You may be eligible if you are experiencing extreme economic hardship.

Contact Discover directly for more details on any of the repayment assistance plans or to determine if you qualify.

Explore the Best Student Loan Refinancing Options Today

If you are considering refinancing some or all of your student loans, it is important to take your time and do your research. Understanding all of your options and reading the fine print before you sign any loan documents could save you from a costly mistake.

Discover student loan consolidation has a lot of benefits to consider (e.g., flexibility to work with borrowers who may need assistance with repayment options and the ability to work with people who have not graduated). Discover’s zero-fee policy can also save you some money, and their interest rate reduction for automatic payments will lower your interest rate over the long term.

On the other hand, because Discover does not offer a pre-qualification check, you will find it hard to compare them to other lenders. It also means that you will have a hard credit check before you know what they can offer you. Their consolidation loans also only come with two loan repayment terms: 10 or 20 years.

Understanding your student loan options and how the details impact your overall costs doesn’t have to be difficult. At CollegeFinance.com, we can help potential and current borrowers understand their loan terms, learn more about online lenders, explore their loan payment options, help them with the application process, and more.

Discover Student Loans Refinancing FAQ

How Can I Lower My Discover Student Loan Payments?

How much your payment is each month will be determined by the amount of the loan as well as your credit history. Discover offers several ways to lower your payments. First, if you include a co-signer with excellent credit history, it could lower your interest rate. Second, when you sign up for automatic payments through a checking or savings account, you will be eligible for an interest rate discount.

If you need to lower or defer your payments due to financial hardship, Discover has several programs you may be eligible for. You can learn more about them here, but you will need to discuss your individual eligibility with a Discover employee.

Is There a Downside to Refinancing Student Loans?

While refinancing student loans can simplify your life, save you money, and often help lower your payments, there are some things to consider before taking the plunge. For example, if you have poor credit, you probably won’t be able to save much money — and you may not be able to refinance at all.

Additionally, if you have federal student loans, refinancing with a private lender instead of consolidating into a Direct Consolidation Loan could mean losing the benefits that come with those loans. Some of those benefits include programs that pause your payments during financial hardship, loan forgiveness for certain public service career paths, and allowing your income to determine your payment obligation.





*Lowest APRs shown for Discover Private Consolidation Loans are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include a 0.25% interest rate reduction while enrolled in automatic payments. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Your APR will be determined after you apply. Visit Discover.com/student-loans/consolidation.html for more information, including up-to-date interest rates and APRs.