Diksia.com - If you are looking for a way to pay for college or graduate school, you may have considered taking out a student loan. But with so many options available, how do you choose the best one for your needs?
In this article, we will introduce you to Discover Student Loans, a private lender that offers a range of benefits and features for students and parents.
We will also compare Discover Student Loans with other types of loans, such as federal student loans and other private lenders, and help you decide if Discover Student Loans are right for you.
What are Discover Student Loans?
Discover Student Loans are private loans that you can use to cover up to 100% of your school-certified college costs, such as tuition, fees, books, housing, and other expenses. Unlike federal student loans, which are funded by the government, private student loans are offered by banks, credit unions, and other financial institutions.
Discover Student Loans is one of the leading private student loan providers in the US, with over 35 years of experience in the student loan industry.
What are the benefits of Discover Student Loans?
Discover Student Loans offer several advantages over other types of loans, such as:
- Zero fees: You don’t have to pay any application, origination, or late fees when you take out a Discover Student Loan. This can save you hundreds or thousands of dollars over the life of your loan.
- Rewards for good grades: You can get a cash reward of 1% of your loan amount for each new Discover Student Loan if you have a 3.0 GPA or higher. This reward can be redeemed as a statement credit or a direct deposit to your bank account. You can use it to pay off your loan faster, save for the future, or treat yourself to something nice.
- Auto Debit Reward: You can get a 0.25% interest rate reduction when you sign up for automatic payments from your bank account. This can lower your monthly payments and reduce the total interest you pay over time.
- Flexible repayment options: You can choose from four repayment options to suit your budget and preferences. You can start paying your loan right away, make interest-only payments while in school, defer your payments until after you graduate, or make $25 fixed monthly payments while in school. You can also prepay your loan at any time without any penalty.
- US-based loan specialists: You can get 24/7 support from a team of friendly and knowledgeable loan specialists who are based in the US. They can help you with any questions or issues you may have regarding your loan application, disbursement, repayment, or consolidation.
How do I apply for a Discover Student Loan?
Applying for a Discover Student Loan is easy and fast. You can complete the online application in 15 minutes or less, and get an instant credit decision. You will need to provide some basic information, such as your name, address, social security number, school name, loan amount, and academic term. You will also need to provide information about your income, expenses, and assets, as well as your cosigner’s information if you have one.
A cosigner is someone who agrees to share the responsibility of repaying your loan if you can’t. Having a cosigner can improve your chances of getting approved and getting a lower interest rate. Most undergraduate students need a cosigner to qualify for a private student loan, but some graduate students may be able to get a loan without one. Discover Student Loans recommends that you apply with a creditworthy cosigner to increase your likelihood of approval and lower your interest rate.
After you submit your application, you will receive an instant credit decision. If you are approved, you will need to accept the loan terms and conditions, sign the loan agreement, and complete the self-certification form. You will also need to verify your identity and income, and provide any additional documents that Discover Student Loans may request. Once you complete these steps, your loan will be ready for disbursement. Discover Student Loans will send the funds directly to your school, and your school will apply them to your account.
How do I compare Discover Student Loans with other loans?
Before you take out a student loan, it is important to compare your options and choose the one that best suits your needs and goals. You should consider factors such as the interest rate, fees, repayment options, rewards, and customer service of each loan. You should also compare the total cost of each loan over time, and how it will affect your monthly budget and future plans.
One of the main types of loans that you should compare with Discover Student Loans are federal student loans.
Federal student loans are funded by the government and have some benefits that private student loans don’t, such as:
- Subsidized interest: If you qualify for a subsidized federal loan, the government will pay the interest on your loan while you are in school, during your grace period, and during periods of deferment. This can save you a lot of money in the long run.
- Income-driven repayment plans: If you have trouble making your monthly payments, you can apply for an income-driven repayment plan that will adjust your payments based on your income and family size. This can make your payments more affordable and manageable.
- Loan forgiveness programs: If you work in certain public service or nonprofit jobs, you may be eligible for loan forgiveness after making 120 qualifying payments. This means that the remaining balance of your loan will be forgiven after 10 years of service.
- Deferment and forbearance options: If you face financial hardship, such as unemployment, illness, or military service, you may be able to temporarily postpone or reduce your payments without affecting your credit score. This can give you some breathing room until you get back on your feet.
However, federal student loans also have some drawbacks that you should be aware of, such as:
- Limited borrowing amounts: Federal student loans have annual and aggregate limits on how much you can borrow, depending on your level of education and dependency status. These limits may not cover the full cost of your education, especially if you attend a private or out-of-state school. You may need to supplement your federal loans with other sources of funding, such as private loans, scholarships, grants, or savings.
- Higher interest rates: Federal student loans have fixed interest rates that are set by Congress each year. These rates may be higher than the rates offered by some private lenders, especially if you have good credit or a cosigner. You may be able to save money by getting a lower interest rate from a private lender.
- Fewer rewards and incentives: Federal student loans do not offer any rewards or incentives for good grades, on-time payments, or automatic payments. You may be able to get these benefits from some private lenders, such as Discover Student Loans, and use them to pay off your loan faster or save for the future.
Another type of loan that you should compare with Discover Student Loans are other private student loans. Private student loans are offered by various lenders, such as banks, credit unions, and online platforms.
Each lender has its own criteria, terms, and features for its loans, so you should shop around and compare different offers before you choose one.
Some of the factors that you should look for when comparing private student loans are:
- Interest rate: The interest rate is the percentage of your loan amount that you pay in interest each year. It is one of the main factors that determines how much your loan will cost you over time. Private student loans can have either fixed or variable interest rates. Fixed interest rates stay the same throughout the life of your loan, while variable interest rates can change based on market conditions. Variable interest rates may start lower than fixed rates, but they can also increase over time and make your payments unpredictable. You should compare the APR (annual percentage rate) of each loan, which includes the interest rate and any fees, to get a better idea of the true cost of each loan.
- Fees: Fees are charges that you have to pay to get or maintain your loan. Some common fees that private lenders may charge are application fees, origination fees, late fees, prepayment fees, and returned payment fees. These fees can add up and increase the cost of your loan. You should look for a lender that does not charge any fees, such as Discover Student Loans, or that charges minimal fees that are reasonable and transparent.
- Repayment options: Repayment options are the choices that you have for how and when you pay back your loan. Some common repayment options that private lenders may offer are immediate repayment, interest-only repayment, deferred repayment, and partial repayment. Each option has its pros and cons, depending on your financial situation and goals. You should look for a lender that offers flexible and customizable repayment options that suit your needs and preferences. You should also check if the lender offers any grace period, deferment, or forbearance options in case you need to pause or reduce your payments due to financial hardship.
- Rewards and incentives: Rewards and incentives are benefits that you can get from your lender for meeting certain criteria or taking certain actions. Some common rewards and incentives that private lenders may offer are cash rewards for good grades, interest rate reductions for automatic payments, referral bonuses, loyalty discounts, and cosigner release options. These benefits can help you save money, pay off your loan faster, or improve your credit score. You should look for a lender that offers generous and attainable rewards and incentives that add value to your loan.
- Customer service: Customer service is the quality and availability of the support that you can get from your lender when you have any questions or issues regarding your loan. You should look for a lender that offers 24/7 support, online access, and US-based loan specialists who are friendly and knowledgeable. You should also check the reviews and ratings of the lender from other customers and third-party sources, such as the Better Business Bureau, Trustpilot, and Consumer Affairs.
To help you compare Discover Student Loans with other loans, you can use online tools and resources, such as loan calculators, comparison charts, and guides.
You can also contact the lenders directly and ask for personalized quotes and information. You should compare multiple offers and weigh the pros and cons of each loan before you make a decision.
How do I repay my Discover Student Loan?
Repaying your Discover Student Loan is simple and convenient. You can choose from four repayment options, as mentioned above, and change your option at any time without any fee. You can also prepay your loan at any time without any penalty.
You can make your payments online, by phone, by mail, or by automatic debit. You can also manage your account online, view your statements, check your balance, update your information, and access helpful tools and tips.
If you have trouble making your payments, you can contact Discover Student Loans and request for assistance. They may be able to offer you some options, such as changing your due date, adjusting your payment amount, or applying for a forbearance. A forbearance is a temporary suspension of your payments for up to 12 months, during which interest will continue to accrue.
You can apply for a forbearance if you experience financial hardship, such as unemployment, medical expenses, or natural disasters. You can also apply for a forbearance if you are serving in the military, performing public service, or enrolled in a residency program.
If you have multiple Discover Student Loans, you may be able to consolidate them into one loan with one monthly payment. Consolidating your loans can make your repayment easier and more convenient, as well as lower your interest rate and extend your repayment term.
However, consolidating your loans may also increase the total cost of your loan and cause you to lose some benefits and features of your original loans. You should carefully consider the pros and cons of consolidation before you apply.
Conclusion
Discover Student Loans are a smart way to finance your education, as they offer zero fees, rewards for good grades, auto debit reward, flexible repayment options, and US-based loan specialists. They also offer competitive interest rates and generous borrowing amounts that can cover up to 100% of your school-certified college costs.
You can easily apply for a Discover Student Loan online and get an instant credit decision. You can also compare Discover Student Loans with other types of loans, such as federal student loans and other private student loans, and choose the one that best suits your needs and goals.
You can also repay your Discover Student Loan with ease and convenience, and get assistance from Discover Student Loans if you face any difficulty. Discover Student Loans are a great option for students and parents who are looking for a reliable and affordable way to pay for college or graduate school.
