Discover Student Loan Refinance Review

Our Rating: D (Compare)

Discover Bank may be a good option for borrowers who already have accounts with Discover or those who may wish to take advantage of Discover’s multiple debt relief programs, such as loan forbearance or temporarily reduced payments.

Loan Limits $5,000 – $150,000
Fixed Rates 5.99%* – 10.49%
Variable Rates 5.49% – 9.49% (18.00% Cap)
Terms 10 or 20 years
Min. Credit Score Undisclosed
Apply Link

*Lowest rates always include the 0.25% interest reduction for enrolling in auto-pay.

Skip to: Rates & Fees | Eligibility Requirements | Repayment Options | Consumer Reviews & Complaints | FAQ

Loan Refinancing Options
Private student loans
Private parent loans
Federal student loans
Federal Parent PLUS loans (in parent’s name only)

Discover Refinance Rates & Fees

Discover’s fixed rates are between 5.99% and 10.49%. Variable rates are between 5.49% and 9.49%. Note that the lowest rates always include the 0.25% interest reduction for enrolling in auto-pay.

In 2022, Discover has raised their lowest available variable rate 175.9% (from 1.99% APR) and their highest variable rate 65.3% (from 5.74% APR). Fixed rates have increased 100.3% on the low-end (from 2.99% APR) and 55.6% at the high-end (from 6.74% APR).

Refinance Loan Rates
Terms Fixed Rate Variable Rate
10 or 20 Years 5.99% – 10.49% 5.49% – 9.49%

Additional information about Discover refinance rates:

  • Checking your rate with SoFi may affect your credit score. They will conduct a hard, not soft, credit inquiry (learn the difference).
  • Variable rates are based on the 3-Month CME Term SOFR (4.45% as of this writing) as published by CME Group.
  • Variable rates are capped at 18.00%.
  • Discover Bank discloses that “Discover may sell or transfer a refinance loan to another institution at any time.” Such a transfer may impact a loan’s APR.

Student Loan Refinancing Calculator

Based on advertised rates, use the calculator below to determine what your new monthly payment and potential savings may be if you refinance with Discover.

Additional Fees

Beyond interest rates, there are a number of fees a refinance lender may charge up-front or during the loan servicing period. Below is a list of these fees that Discover does or does not charge.

Fee Type Amount Charged
Application Fee None
Loan Origination Fee None
Disbursement Fee Undisclosed
Prepayment Penalty None
Late Payment Fee None
Returned Payment Fee None
Collection Fee Undisclosed
  1. Application fee – fee to apply for rates & approval.
  2. Loan origination fee – fee to create the new loan.
  3. Disbursement fee – fee for distributing funds to lenders to pay off loans that have been refinanced.
  4. Prepayment penalty – fee for making extra payments to reduce a refinance loan balance or pay it off early.
  5. Late payment fee – fee for making a late payment.
  6. Returned payment fee – fee for failed payments due to insufficient funds, also known as a “bounced check”.
  7. Collection fee – fee for collection activity on a defaulted debt.

Current Promotions & Offers

Discover offers a 0.25% interest rate reduction with enrollment in automatic payments. Borrowers may also be eligible to earn $100 for every qualified referral that results in a new loan or line of credit. The person who was referred also receives $100 if they do not have any prior or existing loans with Discover. The program limits referral bonuses to $400 per calender year.

Discover Refinance Eligibility Requirements

To qualify for refinancing with Discover, all borrowers must meet the criteria below.

  • Citizenship Requirement: U.S. citizenship or permanent residence.
  • Income Requirement: proof of income required, no minimum specified.
  • Credit Score Requirement: undisclosed minimum credit score.
  • Graduation Requirement: none.
  • Location Requirement: unspecified.

Additional restrictions apply for specific individuals and loans.

  • Payments must be made from a U.S. bank account. Sending cash payments is not allowed.
  • $50 minimum monthly payment.
  • If a loan enters default, the entire outstanding balance is immediately due.

Discover Student Loan Repayment Options

Lenders vary greatly on the benefits and options provided to borrowers during the loan servicing period. Additionally, benefits may only be available on a case-by-case basis. Discover offers some relief options.

Deferment & Forbearance

Discover offers more opportunities for deferment and/or forbearance than most other lenders. They also offer unspecified repayment assistance.

See Discover’s conditions for deferment and forbearance below.

Condition Coverage
Returning to grad school (at least half-time) Deferment
Disability rehabilitation Undisclosed
Active military duty Deferment, up to 36 months
Involuntary unemployment Forbearance, up to 12 months
Economic hardship Forbearance, up to 12 months
Natural disaster Undisclosed
Temporary hardship Unspecified
Health profession residency Deferment, up to 60 months
Public service* Deferment, up to 36 months

*Minimum of 6 months service in any of the following organizations: National Oceanic and Atmospheric Administration (NOAA), Peace Corps (ACTION Program and Tax-Exempt Organization Volunteer), AmeriCorps, Red Cross, US Public Health Service Commissioned Corps, US Department of State (Fulbright Program).

Additional Options

Discover may offer other opportunities for relief or contract modification.

  • Discover’s Early Repayment Assistance Program is for students within their grace period or the first 3 months of repayment.
  • Payment Extension is for loans that have been in repayment for more than 6 months, are 60 or more days delinquent, and have not been in forbearance for the past 6 months; students may return their loan’s status to current by making 3 minimum monthly payments (or the equivalent amount of 3 minimum monthly payments) within 90 days.
  • Reduced Payment is for loans less than 60 days delinquent; the minimum monthly payment is reduced to an amount greater than or equal to the monthly interest amount, but less than a full monthly principal & interest payment, subject to a $50.00 minimum, for an initial period of six months.
  • Co-signer release is not an option at Discover.
  • Death / disability discharge is available in the unfortunate circumstance that a borrower passes away or suffers total permanent disability.
  • Temporary interest rate reductions may also be available to borrowers under economic hardship.
  • Discover has a standard Private Loan Deferment Request form.

Discover Reviews, Complaints & Lawsuits

Beyond our own findings, our team also collected the most genuinely insightful customer experiences we could find, including any instances of legal action against the company in which the details became public.

Discover Online Reviews

Below are 3 samples of Discover customer reviews we found on public forums, included here for their value as unedited, uncensored, and unsolicited user experiences. Note that these reviews are unverified, may include inaccuracies, and may provide outdated information (about rates, bonus offers, etc.).


“They’re fine. The website is better than it used to be. Auto-pay works fine without any hassles. Doesn’t sync to Mint very well. Often have to re-enter the security questions and sometimes still won’t connect for a day or two … but that’s possibly on Mint’s end too.

The thing you need to understand is that they are Private loans. Which means that you are agreeing NOW to a set repayment schedule when you graduate. An interest rate and a term. That defines the minimum payments. People often post here about how their private loan lender is demanding that they pay a particular number and refuse negotiate. They have NO obligation to “work with you” and are in fact prohibited from changing the loan terms on you.

If you’re borrowing a small amount and you get a reasonable degree and a decent job private loans can be fine. Just try to limit them as much as possible..”ANGR1ST on reddit, 6/17/2019


“For 3 months in a row I have had difficulty paying the loan on line and have had to call them up to make payments. As a cosigner, I do not have as much information about the loan as the borrower such as details about payments etc. I have been paying the loan for the person who stopped paying but I feel like I am seen as a money bag by discover and treated as a second class borrower by them. I hate it taking me an hour to make a payment each month. Why cant they just fix their online problems.”Julia Lenhard on The College Investor, 11/21/2017


“As a current Discover student loan borrower, I would strongly advise against using them to finance anything. Their communication and customer service is deplorable. I am still waiting (since November) for a hard copy of my payment history, which seems to have been altered online. Federal loans, if needed, are the way to go.”spelnsane on MyFico, 1/28/2015


More (unfiltered) customer reviews of Discover are available at TrustPilot.com (1.8 out of 5) and ConsumerAffairs.com (3.8 out of 5).

Discover Consumer Complaints

As consumer finance companies, student loan refinancing lenders fall under the jurisdiction of the Consumer Financial Protection Bureau (CFPB), a federal agency. As part of its mission, the CFPB allows consumers to log official complaints. These complaints are publicly available on the CFPB official website.

Since December 1, 2011, consumers have submitted 21,103 complaints about Discover Bank to the CFPB. Among these, 6.53% are related to student loan services; a further 12.2% are related to debt collection. Consumers submit an average of one (1) complaint every four (4) hours and 34 minutes, which is nearly 300 times higher than the average daily complaint rate among reviewed lenders.

In 2022, Discover’s consumer complaint rate is up 108.1% (as of this writing) compared to the complaint rate in an average year.

In 2021, Discover’s complaint rate was 72.7% higher than average. That year, consumers filed 3,336 complaints about Discover Bank, which is equivalent to one (1) complaint for every $3.963 million of that year’s corporate revenue or one (1) complaint for every five (5) employees.

The allegations made in these complaints are unverified, are not necessarily representative of all consumers’ experiences with Discover, and may contain outdated information (about rates, bonus offers, etc.). Note that a lender with a large customer base is likely also to have a higher number of complaints when compared with smaller lenders.

Line Graph: Discover Bank Consumer Complaints, Public Complaints Filesd with the Consumer Financial Protection Bureau, from 2011 (57, December only), 2012 (843), 2013 (901), 2014 (1,015), 2015 (1,477), 2016 (1,589), 2017 (1,807), 2018 (2,008), 2019 (2,141), 2020 (2,590), and 2021 (3,336)

Below we’ve included 3 of the most recent complaints (as of this writing) in which the consumer consented to share their details. These samples are limited to complaints that specifically reference student loan products and services.


Complaint 5941454
9/1/2022
New Jersey

“This complaint is regarding the {$25000.00} Education loan application, which has been canceled due to Discover service issues. This is causing me serious financial trouble since I have been told to re-apply for another loan, resulting in higher interest rates. I had applied for 2 Education loans of {$25000.00} each ( A total of {$50000.00} ) with different co-signers for the same loan period. My college certified/approved both of these loans, and they would be disbursed half in XXXX XXXX and the remaining in XXXX XXXX. However, Discover cancelled one of the loans marking it as Duplicate. Of the two loans I applied for, the cancelled loan was a lower fixed rate loan with fixed interest rate of 4.590 % while keeping the higher fixed loan open at 7.240 %. This deliberate action has been taken outside my interests and is selective and biased, to serve the bank ‘s interest.”


Complaint 5927973
8/29/2022
Ohio

“I have 3 student loans with Discover bank. This complaint is about Discover Financial and how they omitted important information, harassed my mother and I for two months, are falsely holding 3 loan balances on my credit report, and still have not fixed the issue. On XX/XX/XXXX I consolidated my private loans with XXXX bank. On XX/XX/XXXX XXXX sent 3 checks to the XXXX XXXX XXXXXXXX in Illinois, the address Discover requests payments be sent to. I was told 10 business days until the checks would post. I called Discover a few days before my payment was due letting them know the checks were on the way, they ” noted ” it on my account. I kept calling to see if the checks were there up until my due date ( XX/XX/XXXX ) every few days, no checks yet. One day after my payment was due, they began calling me multiple times a day asking for payment. I would tell each representative about the checks. They began sending me delinquent letters in the mail, emails, emails to my MOM, and calling my MOM. Saying we owe payment. Leaving voicemails. When I would call in trying to see why they do not have the checks they began saying oh maybe wait up to 14 days then call your new lender XXXX and ask for new checks to be sent. I asked if electronic copies could be sent they said no. Every day I went in rounds between Discover calling insisting I owe them a payment and there is no checks in their possession, and that it’s my problem to fix with XXXX. XXXX every time I would call, would tell me that Discover is doing this to everyone that they have sent checks for, and that it’s taking over a month for payments to process. XXXX advised against sending new checks. This continues on for the next month, except now the calls emails and mail becomes more frequent and says I am two months behind in payments, talking about reporting to creditors my delinquency. In the meantime I am already paying on my NEW consolidation loan. They say they can not call it a missing payment because they didn’t cash the checks, and say there is NO REASON the checks could be delayed. I begin asking about a way to put this loan into forbearance and they say I have used my time available already. ( I am a fresh graduate. ) They acted like they didn’t believe I had checks coming. Like I was a liar and unable to pay. A few days short of being ” 60 days delinquent ” I hear Discover had launched an ” internal investigation ” on student loan practices. I call in again demanding a supervisor for the 500th time. I tell them I need to speak to someone about this investigation. I also tell them due to this investigation I fear their processing times will be even longer and told them there is no way I am paying this almost XXXX dollar bill to them. They then put my loan into forbearance. A few days later someone from the lost payments department calls me and says there was a SECURITY BREACH at the XXXX XXXX XXXX Illinois, Discover forwarded the checks from that location and they have a new payment processing company. They said they had made it though the other customer ‘s XXXX checks and still don’t see mine. I confirm with XXXX the XXXX XXXX used was the breached one. The ‘back office ” Discover person says they think they can ask higher above them to accept the original checks, but not before suggesting new checks be over nighted. ( That would mean dated for sometime in XXXX and increased interest. ) XXXX forwards over the original checks via email per Discover ‘s request ( Couldn’t do this 2 months ago?? ) Discover states they will cash them ASAP, and backdate the interest to the original check date. Two more weeks pass by. I call them asking WHY they still have not cashed the checks. They told me they were working on a big project, why is my situation not your big project? I threatened to place in complaints on every level. They called me letting me know the checks were cashed and back dated. They should have been back dated to XX/XX/XXXX. They are not. They are back dated to XX/XX/XXXX. Three extra days of interest. The person on the phone with Discover said I am getting a refund still, and my reply is that I want the CORRECT refund. Every turn as been deception from Discover. This feels Illegal what they have done, someone please help me prove exactly how it is.”


Complaint 5815708
7/27/2022
Virginia

“I was originally in school to get a XXXX XXXX, during that time, my loans were on hold. Then eventually I graduated in XX/XX/XXXX. Soon after Discover student loans contacted me to start payments. I informed them I wasnt making enough money to pay the amount they were requesting. They put me on a lower payment plan, however, I was still unable to make those payments. I started a new job in XX/XX/XXXX which required me to relocate to Virginia. During that time relocating I had to pay all expenses etc. I then received an email Indicating that my loans will be in default. I immediately contacted them and paid {$380.00}. This payment was issued in XXXX. I woke up last week to the news that my loans were charged off. I tried calling them to negotiate or figure out anything I can do. They indicated once a loan is charged off the entire balance is owed. I only make about {$58000.00} a year. With all of my expenses including rent utilities and food I can not afford the amount theyre asking me to pay. I tried everything and there seems to be nothing I can do. I called them again today and was told calling every day will not change the outcome. It will remain the same. I am frustrated, sad, worried, feeling overwhelmed, and feeling like theres no way out even through XXXX. This is one of my last resort As I am not sure what else I can do. Trying to refinance is also impossible because of how they have affected my credit.”


For a full list of complaints made against Discover in the CFPB’s Consumer Complaint Database, click here.

Discover Lawsuits

Discover Bank has been subject to dozens of lawsuits and federal investigations. We’ve included two (2) of the most recent below as examples of Discover’s lawfulness and regulation compliance.

Note that while this information is updated regularly, ongoing legal action is subject to change.

Perez et al v. Discover Bank Case No. 20-CIV-03045

The Mexican American Legal Defense and Educational Fund (MALDEF) has brought a class action lawsuit against Discover Bank alleging the bank “imposed restrictions on student loan services based on immigration status”.[1][2]

Ongoing since July 2020, the civil complaint calls for injunctive and declaratory relief and damages. Allegations are based on complaints that Discover denied one of their borrowers an opportunity to refinance at a lower rate, informing the borrower that her rejection was based solely on her immigration status.

MALDEF alleges violations of California’s Unruh Civil Rights Act, which explicitly prohibits businesses from discrimination based on, among other things, immigration status.”

The case has been assigned to Judge Susan Illston of the California Northern District Court.[3]

Consumer Financial Protection Bureau v. Discover Bank, Case No. 2020-BCFP-0026

In December 2020, Discover Bank – in conjunction with The Student Loan Corporation and Discover Products, Inc. – settled a lawsuit with the Consumer Financial Protection Bureau (CFPB). The company was fined $35 million following an investigation by the CFPB that found “Discover engaged in illegal debt collection practices.” [4]

The CFPB determined that Discover Bank violated the Consumer Financial Protection Act of 2010 (CFPA), the Electronic Fund Transfer Act, and Regulation E. Discover was also found to be in violation of a federal order issued in 2015.

Discover was ordered to pay a minimum of $10 million in consumer redress and a $25 million civil money penalty. The settlement between Discover and the CFPB includes requirements designed to prevent future violations.


Frequently Asked Questions

These are the most common questions consumers have about student loan refinancing with Discover.

  • Is Discover good for refinancing student loans?
    Discover may be a good option for someone who already has an account with Discover.
  • Does Discover have a minimum credit score requirement to refinance student loans?
    Discover does not disclose a minimum allowable credit score to qualify for student loan refinancing.
  • Are Discover loans federal?
    Discover loans are not federal. Discover has no affiliation with the federal government or the U.S. Department of Education.
  • Does Discover charge a prepayment penalty?
    There are no penalties for early payments or repaying a loan in full before its term is over.
  • Does checking your rates with Discover hurt your credit score?
    Discover does not offer prequalification, so applying for a refinance loan or private loan consolidation requires a hard credit check. In other words, the credit check will appear in your credit history and may influence your FICO credit score.
  • Is Discover a bank?
    Discover Bank is indeed a bank as well as a subsidiary of Discover Financial Services. In casual conversation, “Discover” often refers to the Discover Card, the third-largest credit card brand nationwide, which is issued by Discover Bank.
  • Can I refinance a Discover loan?
    You can refinance a Discover student loan or a student loan from another private lender. There is no limit to the number of times a borrower may refinance with Discover. Note, however, that every new line of credit requires a hard credit check that may affect your FICO score.
  • Can I refinance just some of my loans with Discover?
    Yes, you can refinance some, all, or just one of your qualifying student loans with Discover. You may choose to refinance your private loans only or refinance private and federal loans together.
  • Can I refinance loans that have already been refinanced?
    Yes, you can refinance loans as many times as you want with Discover. Note that each time you refinance, you will have to submit a new application; every application requires a hard credit check that may affect your credit score.
  • Can my spouse and I refinance our loans together with Discover?
    Discover does not allow spouses to combine their student loans when refinancing.
  • How long does it take to refinance with Discover?
    Refinancing with Discover takes between 9 and 20 weeks. Processing your application takes 30 to 45 days. Once you receive your approval disclosure, you will have 30 days to accept the loan terms (plus a 3-day right-to-cancel period). After an unspecified processing period, your first payment comes due 30 to 45 days following disbursement.
  • Who services Discover refinance loans?
    Discover does not disclose a third-party servicer, but its promissory note stipulates that “service providers (“Authorized Parties”) may contact you, including calls, text message or email, about any current or future accounts or applications, with respect to all products you have with us…”
  • Does Discover offer a grace period?
    Discover does not offer a grace period but may allow for a temporary forbearance when you refinance loans that are in a grace period.
  • How often do variable rates change?
    Discover updates variable rates once per fiscal quarter – that is, on January 1st, April 1st, July 1st, and October 1st – according to the 3-month LIBOR.
  • Can I get any special rates or discounts with Discover?
    Discover does offer a 0.25% interest rate reduction when you enroll in auto-pay. They also have a referral program and occasionally offer special bonus perks, which are listed on their web site.
  • What happens if I file for bankruptcy?
    Discover explicitly states in its promissory note that in cases of bankruptcy, the entire outstanding loan balance is immediately due.
  • Does Discover partner with any major student refinance lender marketplaces?
    Discover does not appear to partner with any multilender marketplaces.

Compare Student Loan Refinance Reviews

Lender Rating
RISLA A+
Brazos A
CommonBond A
Credible A
Advantage A-
ELFI A-
Laurel Road A-
Mpower Financing A-
Splash Financial A-
Purefy B+
UW Credit Union B+
LendKey B+
College Ave B
PenFed B
SoFi B
Earnest B-
EDvestinU B-
INvestEd B-
MEFA B-
Sparrow B-
Yrefy B-
Citizens Bank C+
ISL C+
Lend-Grow C+
SELF Refi C+
SuperMoney C+
First Tech Federal C
BECU C-
Navy Federal C-
First Republic Bank D+
iHelp D+
Discover D
Nelnet Bank D
PNC Bank D-
NaviRefi F

Sources

  1. Perez v. Discover Bank Case No. 20-CIV-03045, Class Action Complaint for Injunctive and Declaratory Relief and Damages, Demand for Jury Trial
  2. ClassAction.org, Class Action Claims Discover Bank Imposed Restrictions on Student Loan Services Based on Immigration Status
  3. PacerMonitor, Perez et al v. Discover Bank
  4. Consumer Financial Protection Bureau Settles with Student Loan Servicers Discover Bank, The Student Loan Corporation, and Discover Products, Inc. for Violating a Bureau Consent Order and Other Unlawful Practices
  5. Discover, Loan Promissory Note
  6. Discover, Consolidate Your Student Loans
  7. Discover, Repayment Assistance Options
  8. Mexican American Legal Defense and Educational Fund, Maldef Sues National Bank for Loan Policy that Discriminates Against Certain Immigrants
  9. CFPB, Consumer Complaint Database
  10. Dun & Bradstreet, Business Directory
  11. Better Business Bureau, Search Businesses and Charities