How to Refinance Discover Student Loans

Ben Luthi

Discover, which started out as a credit card company, now offers a wide range of financial products and services, including private student loans. If you borrowed Discover student loans to get through school or to help your child, but now you’re making payments, it may be a good idea to consider refinancing them with another lender.

Here’s why student loan refinancing for Discover student loans might be the right choice and how to take advantage of record-low interest rates.

Why you should refinance Discover student loans

Discover offers a range of private student loan options for both undergraduate and graduate students. Available Discover education loans include:

  • Undergraduate student loans
  • Graduate student loans
  • Health professions student loans
  • Residency student loans
  • MBA student loans
  • Law school student loans
  • Bar exam student loans
  • Parent student loans
  • Consolidation student loans

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Free eBook: How to Conquer Student Loans

Depending on the type of loan you have, your terms – including your interest rate – can vary. Now that you’re making payments on your debt, you may be wondering, can you refinance Discover student loans? The answer is yes, and there are a few different reasons to consider it:

  • You want a lower interest rate: In early 2021, fixed student loan refinancing rates are at a record low. If your credit and income are in good shape, you may be able to save money.
  • You’re interested in paying off your student debt early: Some lenders offer repayment terms as short as five years.
  • You need a lower monthly payment through a longer repayment plan: If you’re having trouble keeping up with your payments or you’re hoping to reduce your debt-to-income ratio (more on that below) some refinance lenders allow you to extend your term up to 20 years.
  • You’ve had a bad experience with Discover: In 2020, the Consumer Financial Protection Bureau received 111 complaints from Discover’s student loan customers. While that’s low relative to how many borrowers the lender has, if you’re someone who’s had a poor experience, another lender may be able to provide better satisfaction.
  • You want to switch your interest rate type: Discover offers both variable and fixed interest rates. If you’re looking to switch from one to the other, though, you’ll need to refinance your debt with another lender.
  • You want to transfer parent loan debt to your child: If you took out parent student loans, some refinance lenders will allow you to transfer the debt to your child, as long as they agree and can qualify on their own.
  • You want to remove a cosigner: If your parent or another loved one cosigned your Discover student loans and you can now qualify to refinance on your own, it can be a great way to remove them as a cosigner and release them from the responsibilities associated with that arrangement.

Is Discover student loan consolidation the same as refinancing?

Discover offers its own program to refinance and consolidate student loans, where the borrower is able to combine multiple loans for a lower interest rate and more favorable term.

However, the Discover student loan consolidation is different from a federal student loan consolidation. Federal consolidation will combine all of your loans into one payment, but your new interest rate would be the weighted average of your previous rates. Only federal loans are eligible for federal consolidation.

Discover student loan consolidation is the same as private student loan refinancing. Both federal and private loans are eligible, and you will select the new interest rate and repayment term. If you already have Discover student loans, you may want to explore other lenders and shop around to find the best interest rate.

Benefits of refinancing Discover student loans

Discover student loan refinancing through another lender can come with several different benefits. Here’s how the process could help you.

You could save thousands of dollars

With record-low interest rates available, you could qualify for a much lower interest rate than what you’re currently paying.

For example, let’s say you have $20,000 in student loans with Discover with a 10-year repayment term. And because your credit wasn’t well established yet, you have a 9% interest rate.

Now, let’s say your credit has improved dramatically, and your income is in a good place, so you qualify for a 4% interest rate and keep the same repayment term. Comparing those two options, you’d save $51 per month with the new loan and $6,103 in total interest over the life of your loan.

Refinancing Discover student loans can also allow you to switch from a variable interest rate to a fixed rate or vice versa. While variable interest rates typically start off lower, they fluctuate based on the current market rates, and because interest rates are so low right now, the chances of your rate going up are high.

By switching to a fixed rate, you could lock in a low rate and avoid the extra cost associated with higher interest rates in the future.


Refinancing Discover student loans to a lower rate is often a no-brainer!

If you can qualify for a lower interest rate by refinancing Discover student loans, you can save big without any major drawbacks.

Takes 2 minutes • No impact on credit

How to refinance Discover student loans step by step

Once you’re ready to refinance your student loans with Discover, here are the steps you can take to complete the process effectively.

1. Determine your student loan payoff goals

Before you do anything else, it’s important to think about why you want to refinance. What are your goals for the process, and how can refinancing make an impact on your financial situation?

For example, do you want to pay off your student loans early or extend your repayment term and lower your monthly payment? Do you want to cut your interest rate or simply consolidate your monthly payments for more simplicity?

Think about what goals you want to achieve with refinancing, and you’ll have a better chance of finding the best fit for you.

2. Compare student loan refinance rates

Unlike the U.S. Department of Education, which standardizes its interest rates for everyone who qualifies, private lenders have their own set of interest rates and criteria for determining whether you qualify.

As a result, shopping around and comparing rate quotes from multiple lenders is the most important step you can take to maximize your savings. If you simply go with the first offer you get or try to go through your bank or credit union because it’s convenient, you may end up with a more expensive loan.

The prequalification process is the best way to compare student loan refinance rates from the top lenders. With just a soft credit, you’ll get an initial quote based on the information the lender can see on your credit report — once you submit a full application, they’ll run a hard credit check and give you a final offer.

If you want to save time and the headache of dealing with multiple lenders individually, consider using Purefy’s rate comparison tool to do your shopping around. The process is similar to what you’d go through with each lender — provide some information about yourself and your loans — and Purefy can provide rate quotes from several lenders. This makes the process go much more quickly and can make it easier to compare because your options are side by side.

As you compare rates, it’s important to make sure that you’re comparing apples to apples. Remember, variable rates may look appealing because they start out lower, but it’s generally best to avoid them with student loans, especially if you have years to pay off what you owe.

3. Pick your best option

Take your time to compare interest rates, as well as other factors, with each lender to find the one that’s best suited for you and your goals. For example, you’ll want to look at the repayment options, customer satisfaction ratings and other features that may cause one lender to stand out compared to the others.

Take your time with this process. Even if you’re in a rush, it’s worth it to vet each lender thoroughly to ensure the best choice.

4. Apply with your lender of choice

Once you’ve chosen your lender, visit its website or click through from the Purefy rate comparison tool to be directed to its website. From there, you can submit your official application.

On the application, you’ll typically be asked to provide certain personal information, such as your name, date of birth, Social Security number and contact information. You’ll also need to provide details about your student loans, including who’s servicing them and what the payoff amounts are.

In most cases, you’ll also usually need to share some documents, which can include income verification like a pay stub, W-2 form or bank statements, as well as a government-issued photo ID. The actual documents you need can vary depending on the lender, so consider calling beforehand, so you can make sure you have them on hand when you need them.

As soon as you submit your application, the lender’s underwriting team will run a full credit check and give you a final offer based on the information it finds. If the terms are roughly the same as the initial quotes, you may have little reason not to accept it. But if the terms are significantly worse, you may want to revisit the first few steps.

5. E-sign and enjoy your savings

Once you’ve decided to accept the lender’s offer, you’ll need to sign a loan agreement and potentially other paperwork to complete the process. The lender will use your loan funds to pay off your existing loans directly, so you don’t have to worry about that process.

You will, however, want to continue making payments on your Discover student loans until you get confirmation that they’re paid off. Then you can set up automatic payments on the new loan. If you end up making a payment on your old loans and you end up with a positive balance, your original lender will refund the difference between what you and your new lender paid and what was actually owed.

Refinance your Discover student loans today

Discover student loans can be the best fit for many student loan borrowers, and depending on your situation, it may be better to keep your loans where they are. That’s especially true if your eligibility for student loan refinancing is in question.

However, if you’ve decided that refinancing your student loans is the best option for you, it’s important that you take action as soon as possible. Student loan interest rates can fluctuate often, so the sooner you lock in a low interest rate, the more you’ll save.

Before you start the process of refinancing, consider other possible options. For example, if you’re having trouble paying your student loans but anticipate getting back on financial track within the next few months, requesting forbearance may be a better choice, especially if you can’t get better terms through refinancing.

But if you can qualify for a lower interest rate or can see how refinancing student loans can help you achieve your debt payoff goals, start the process of refinancing and see how much it can benefit you.

At the same time, consider the potential drawbacks of refinancing that could impact you. And don’t forget to shop around and compare interest rates and other terms to make sure you find the best lender for you and your situation.

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You could get more payment flexibility

With the option to refinance with a repayment plan from five to 20 years, you can gain more control over your repayment plan. For example, if you have job security and you have the budget for it, reducing your repayment term will increase your monthly payment but result in less total interest and a sooner debt payoff date.

In contrast, if you need a lower payment, you could go up to 20 years. This will generally result in more total interest paid, even if you have a lower interest rate. But it can also give you the payment relief you need.

It’s also a good way to drive down your debt-to-income ratio, which is important if you’re looking to buy a house in the future.

Your debt-to-income ratio, or DTI for short, is the percentage of your gross monthly income that goes toward debt. Mortgage lenders like to see a DTI of less than 43%, and because student loan payments can often be high, they can make up a huge chunk of your debt.

By extending your repayment term, you could reduce your DTI to a more acceptable level, making it easier to get into the house you want.

You can pick your lender based on your preferences

While you picked Discover student loans in the first place, you may not have had much of a choice based on your credit and financial information. Alternatively, you may have chosen Discover without doing much research into other private student loan companies.

Regardless of the circumstances, if you’re dissatisfied with Discover student loans, refinancing them will empower you to choose your new lender based on your refinancing goals. For example, if you need a cosigner to refinance, some lenders allow you to release them from the loan once you’ve made a certain number of payments and you can qualify on your own.

Others may offer other benefits, such as unemployment protection, interest rate discounts, relationship perks and more.

If you didn’t get a chance to shop around for your original loans or you simply want a different experience, refinancing can help.

Drawbacks of refinancing Discover student loans

Discover only offers private student loans, so you don’t have to worry about losing out on the same benefits the government provides to federal student loan borrowers.

But there are still some potential drawbacks to keep in mind.

You may not qualify for better terms

You may have a good chance of getting approved for student loan refinancing if your credit score is in the mid-600s and you earn $30,000 or more. But in order to be eligible for the best rates out there, you’ll need a much higher score and likely a higher income.

According to Purefy data, the average borrower who refinances their student loans has a credit score and annual income of 774 and $98,156, respectively.

In other words, if your credit and income aren’t in stellar shape, you may have a hard time beating your current loan terms. The good news is that the top student loan refinance companies offer prequalification, which allows you to see whether you have a good chance of getting approved and what your interest rate and loan terms might look like — all with a soft credit check which won’t impact your credit score.

Also, if your credit or income isn’t good enough to get better terms, you could get a creditworthy cosigner to apply with you and approved your chances of getting more favorable terms.

Refinancing to a variable rate could cause you to lose money

Again, Discover offers both fixed and variable interest rates. If you’re pulled to the lender’s variable rates because they’re so low, you may end up regretting the decision down the road.

This is because Discover may update its variable interest rates every three months, and if market rates go up, so will yours. So if you do plan to refinance Discover student loans, consider a fixed rate that won’t place the risk of future rate increases on your shoulders.

You could end up paying more in interest with a longer repayment period

If you decide to refinance Discover student loans to get a longer repayment term, you’ll end up leaving money on the table — and you may even pay more in interest, even with a lower interest rate.

For example, let’s say you have $20,000 in Discover student loans with a 9% interest rate and a 10-year repayment term. If you refinance at a 4% interest rate but double that repayment term to 20 years, your monthly payment will drop by $132, but you’ll only save $1,315 in total instead of the $6,103 you’d save with the same repayment term.

And if your new interest rate is 5% instead of 4%, you’ll ultimately pay $1,276 more in interest over the life of the new loan.

That’s not to say it doesn’t make sense to opt for a longer repayment plan, especially if your budget is tight. But it’s important to keep it in mind as you make your decision.

When is the best time to refinance Discover student loans?

There are a few different things you’ll want to consider as you determine when you should refinance your Discover student loans. Here are some aspects of the situation that can tip the scales in your favor.

Your credit and income are in good shape

The higher your credit score and annual income, the better your chances of scoring a low interest rate on your refinanced student loan. If your credit still needs some work, take some time to improve it before you apply.

Start by checking your FICO credit score using a free service like Experian or Discover Credit Scorecard. There are other free credit monitoring services available, but most of them offer a VantageScore credit score, which most lenders don’t use.

Next, get a copy of at least one of your credit reports — Experian offers free access to your Experian report, but you can also get free access to each of your three reports through You can get a free copy of each every 12 months.

As you review your credit report, look for potential issues that you can address, such as paying down high credit card balances and disputing inaccurate information. If you have major negative items on your credit report, such as a delinquency or default, a foreclosure or a bankruptcy, you may need to wait several years before you can get approved.

You’re a parent, and your child has graduated from college

If your plan is to transfer your student debt to your child through refinancing, the sooner you start the process, the less you’ll have to pay.

If your child hasn’t had the chance to build a credit history or earn a high income, you may need to cosign the loan. But this will still shift the responsibility of making payments to your child — though you will be responsible for paying if they can’t.

And remember, many lenders offer cosigner release, so once your child has made the requisite number of payments and has great credit, you can remove yourself from the loan.

You want to maximize your savings

In early 2021, fixed student loan refinance interest rates hit a record low. And because you have private student loans that aren’t eligible for federal coronavirus relief or forgiveness, there’s no reason you shouldn’t at least test the waters and get some quotes.

If you wait, interest rates may increase again, and you may miss out on some of the savings you could have had.

How do Discover loan rates compare with refinance lenders?

When you initially took out your Discover student loan, you likely had little to no credit history, so your Discover student loan rates could be as high as 13%. 

With current interest rates at historic lows, refinancing could cut your interest rate by more than half if you have strong income and good credit.

Refinance rates with Purefy’s lenders start at 1.74%, with the lowest rates reserved for borrowers who have a high credit score and low debt-to-income ratio.

Discover our Student Loan Refinance Calculator

Our student loan refinance calculator allows you to input your current loan information and see how much you can save through refinancing. Use this tool to compare your refinance options and see lifetime interest, savings, and more. If you like what you see, continue to our rate comparison tool to get real offers from industry-leading refinance lenders.

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ELFI Rate Disclosure

4 ELFI Rate Disclosure:

Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 01/01/2023. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

SoFi Rate Disclosure

3 SoFi Rate Disclosure:

Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 5.09% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

Earnest Rate Disclosure

2 Earnest Rate Disclosure:

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.72% APR to 9.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 4.39% APR to 9.19% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

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ISL Rate Disclosure

5 Iowa Student Loan Rate Disclosure:

Fixed Rate Loan Terms: 5 years/60 monthly payments, 7 years/84 monthly payments, 10 years/120 monthly payments, 15 years/180 monthly payments, or 20 years/240 monthly payments. Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. This rate is expressed as an APR. Fixed APRs range from 6.94% to 11.58% APR [low to high range with 0.25% auto-debit rate reduction]. Rates are subject to change without notice. Fixed rates will not change during the term. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan including a 0.25% auto-debit rate reduction. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. All estimates are based on information provided by you and are for informational purposes only, accuracy is not guaranteed and may not reflect actual rates or savings and do not constitute an offer of credit. Your actual rate, payment and savings may be different based on credit history, actual interest rate, loan amount, and term, including your cosigner [if applicable]. If applying with a cosigner, we use the higher credit score between the borrower and the cosigner for approval purposes. All loans are subject to credit approval.

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