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  • Writer's pictureNathan Zarcaro

Discover Student Loan Refinancing Review (2023)

Updated: May 25

Affiliate Marketing Disclosure

Many student loan borrowers don't realize quite how many refinancing lenders are on the market. Many have heard of industry leaders like SoFi, LendKey, and CommonBond, but did you know that companies like Discover are also in the student loan refinancing space?

This article will review refinancing with Discover Student Loans.

Discover student loans logo

Loan Amount

$5,000 - $150,000

Variable APR

Starting at 2.99%

Fixed APR

Starting at 5.49%

Term of Loan

​10, 20 years

Student Debt Destroyer Rating

3/5 stars

What is Discover?

Discover Financial Services is best known as a major industry player in the student loan space, but participates in other financial industries such as student loan lending and refinancing. Its subsidiary, Discover Bank, was originally founded in 1911 as The Greenwood Trust Company. Over the years, they evolved into a major financial player nationwide and later worldwide.

Today, they are the third largest credit card company in the United States, and also offers a variety of financial products, including checking/savings accounts, personal loans, home equity loans, and more.

At a glance: Discover student loans

Refinancing is oftentimes best for borrowers that are struggling financially but need to refi. They are one of the only lenders on the market that doesn't assess late fees, and they offer a lot of flexibility for borrowers struggling to keep up with their payments.

This flexibility makes the transition to private student lending easier to handle, as compared to other private lenders in the industry that offer less flexibility.

When you apply, Discover will conduct a hard credit inquiry to determine what interest rate you qualify for (fixed and variable-rate loans are available). At this time, to refinance, you will need to have at least $5,000 remaining in student debt, and you can refi up to their $150,000 maximum limit.

Discover refinancing eligibility

Possibly to maintain a competitive edge in the industry, Discover does not provide much guidance regarding financial eligibility requirements. They do, however, release some miscellaneous guidance. For example, eligibility is reserved for those that:

  1. Are United States citizens or legal and permanent residents

  2. Must live in one of the nation's 50 states

  3. Attended colleges and universities that are authorized to receive federal aid

In addition to these three demographic requirements, it seems important to note that you do not need to have graduated from college to be eligible. This makes Discover a great option for those without degrees.

Loan terms and rates

One negative of refinancing with Discover is that they only offer two loan terms - a 10-year term and a 20-year term. Most lenders offer far more options than this, with options of 5, 7, 10, 12, 15, and 20 years now seen as the standard.

In terms of rates offered, they typically border from being on the higher side to downright brutal. As of the end of August 2022, Discover was advertising variable rates from 2.99% to 12.59% (yes, you read that correctly), and fixed rates from 5.49% to 13.99% (oof).

They do offer a 0.25% rate reduction for making your payments on autopay.

Discover student loan refinancing interest rates

Discover also won't quote you a rate without a hard credit inquiry, so we suggest that our readers check Splash Financial first, since they'll shop for you, and you'll receive a rate in less than three minutes, all without impacting your credit score.

Flexible repayment options

Discover offers a whole host of flexible repayment options for those that need them, including deferments for the following reasons:

  • Academic

  • Military

  • Medical residency

  • Public service

In addition to these deferment options, you may also be able to utilize a forbearance benefit for up to twelve months in the event that you experience unemployment, hardship, or a medical disability. The only caveat to this is that you cannot utilize all 12 months consecutively.

Discover also offers temporary interest rates and payment reductions for up to 12 and 6 months, respectively. These programs establish a minimum monthly payment of $50, but allow borrowers the opportunity to overcome any financial hardships they may be facing at any given time.

Discover refinancing pros and cons

There are a couple of pros to refinancing your loans with Discover.

1. Very flexible repayment options

We've spent much of the piece talking about these, so we'll leave it here for now.

2. You don't need a degree

It is nice to see another option on the market for those that left their college or university without a degree. There are only a select few lenders on the market today that offer this, and we've always been unsure exactly why that is.

So, if you don't have a degree and need to refinance your loans, this could be a good option for you.


Now, the cons.

1. Absurdly high rates at times

Unfortunately, the lender is not offering all of this flexibility for free. You're likely to encounter higher interest rates than you would with competing lenders, and potentially much higher rates.

But if you don't have a degree or need all of this additional flexibility, then you may need to assess the costs which these programs come with.

2. Hard credit inquiries

Unfortunately, Discover won't quote you your rate with a soft credit pull, like virtually every other lender will do.

This strikes us as a little unfair since their hard inquiry could push down your credit score, negatively impacting the rates you may be offered by other competing lenders in the student loan space. It feels like a game designed to trip you up, and we don't like that.

Our opinion? Don't start the rate shopping process here.

3. No cosigner release

There is also no cosigner release program, meaning that if you apply for refinancing with a parent, spouse, or friend cosigner, their name will be on the loan for the entirety of the term.

Many lenders offer a release program, in which cosigners can be released after a number of timely and complete payments, usually spanning 24-48 months.

4. Limited term options

Speaking of the term of your loan, you'll only be able to choose between a 10 and a 20-year term. Nobody really wants to spend 20 years paying off their loans due to the extra years of interest, and a 10-year term does not give any improvement over federal student debt programs for those that are trying to shorten their term during the refinancing process.

Applying for student loan refinancing with Discover

Though we do not think that Discover is the best private lender on the market, we will give them props for their refinancing application and acceptance process. After you navigate to the Discover homepage, click on the "Apply" button.

Discover student loan refinancing borrower application

From here, you will be automatically directed to the application, where you will proceed through three unique pages to submit your application.

The first section is just applicant information about yourself, including contact info, phone number, and your email address. Then, you'll proceed to the second section, which will ask you for information about your loans and finances. Finally, you'll be ready to submit your application.

Keep in mind that this is in fact the refinancing application (rather than a form for a rate check), and submitting this form will lead to a credit check being conducted.

Before you refinance with Discover

Before you refinance your existing student loans with Discover - or any private lender for that matter - you'll likely want to consider this list of tips and helpful reminders. We've developed these in conjunction with past clients to help maximize the chances that you are in fact making the right decision for your financial reality.

  • Make sure that refinancing makes sense for you: Obviously, you need to be sure that this is the right course of action for you. Download our student loan calculator and see for yourself whether the new rates and terms you're considering may be able to save you thousands, cut years off your repayment, or potentially both.

  • Evaluate whether Discover is the right lender for you: As we've alluded to, Discover is not our favorite for a variety of reasons. And if for some reason they quote you lower rates than their competitors, you'll want to mentally prepare yourself for the possibility of limited flexibility, subpar customer service, and other variables outside of your control.

  • Understand your eligibility for federal programs: Our third and final piece of advice is to make sure you understand that, once you've refinanced with a private student loan lender, there is no way to transition these loans back into federal debt. This means that, in all likelihood, you will lose eligibility for all federal forgiveness, deferment, and forbearance programs. But these sacrifices may be worth it if you have steady employment and can save money each month!

Get our student loan calculator

Those looking to decide whether refinancing (with Discover or elsewhere) is a good idea should download our student loan calculator to best understand whether it is indeed a prudent strategy for your financial picture.

This free tool will also help you determine eligibility and feasibility for a number of forgiveness and alternate repayment strategies, including:

  1. Income Based Repayment

  2. Pay as You Earn

  3. Revised Pay as You Earn

  4. Public Service Loan Forgiveness

  5. Federal Consolidation

  6. And More!

This calculator could save you thousands of dollars.

Discover student loan calculator

The bottom line

Discover Student Loans offers refinancing with more deferment and forbearance perks than most other lenders on the market. But you pay a price for it, a premium that we believe is just too high to be worth it. If you already have Discover loans at 5% or higher interest rates, or are reviewing your refinancing options, you'll probably want to start by checking your rates with Splash Financial.

They are marketplaces that can compare rates across multiple lenders for you, and can quote you a rate in less than three minutes, all without pulling a hard credit inquiry that will impact your credit score.

You can also check out all of the other refinancing guides below.

Other refinancing lender guides






Laurel Road





Splash Financial

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We manually review all products and services that we think are of high quality and value to you.

About Nathan Zarcaro

Nathan Zarcaro is the founder of The Student Debt Destroyer and is passionate about personal finance related causes.  A 2018 graduate of Providence College's Liberal Arts Honors Program, Nathan studied Finance, and worked for one of the world's largest asset management firms before starting his own business.  In his free time, Nathan enjoys playing golf and traveling with his wife Brigid.

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