Got a private student loan with Discover? You could stick with them—or you could refinance your loan, score a lower interest rate, and laugh all the way to the bank.
So, how, exactly, do you refinance your Discover student loan? All you need to do is check competitor's rates and apply—the whole process takes about 15-20 minutes. We'll walk you through it.
What is student loan refinancing?
First things first: Refinancing means replacing an existing loan with a new loan—along with a new interest rate and new terms. It’s the closest thing you get to a do-over on your student loan.
When you refinance, your new lender pays off all your existing loan or loans for you and then issues you a single new private loan. You make payments to one place—not to multiple lenders. That’s one benefit of refinancing—it makes your loans easier to manage.
See also: How Much Student Loan Debt Do I Have?
It also makes your loan cheaper. Ideally, you get a lower interest rate with your new loan—and in a lot of cases, it’s a lot lower. According to our data, most people who refinance can lower their payments by $253 a month or save over $16,000 over the life of the loan.
If your credit score is better now than when it was when you originally took out your Discover student loan, you could qualify for a lower interest rate if you refinance.
How do I pick a new lender to refinance my loan?
Ideally, you want to have maybe four or five lenders to choose from. Here are some criteria to use:
The interest rate they offer
The main point of this exercise is to score a lower interest rate. Each lender will offer you a different rate, based on your credit score and financial history.
You don’t have to go through an entire application process to get a ballpark figure—a lot of lenders have a student loan refinancing calculator on their website (here’s ours).
Once you’ve narrowed the field further, you can put in an application and get an initial offer from the lenders on your shortlist (more on that in a sec).
Their customer service
You’re going to be working with your new lender for a while, so hopefully they’re good with customer service. Read online reviews. Ask around with people you know. Put the question out on social media.
Some people may have had bad experiences--but some lenders really do have great customer service. CommonBond, for instance, has won awards for theirs.
The terms on their loans
Want to stretch your loan out to 20 years so you can save month-to-month? Or how about paying it off in five so you can realize more savings over the life of your loan? Either way, make sure the lender offers loan terms in that range.
What makes each lender stand out
Other factors may make a lender the right fit for you. For instance:
- SoFi offers entrepreneurial seed funding, career counseling, networking events, and even yoga and cooking classes for ambitious members.
- LendKey hooks you up with over 13,000 local community banks and credit unions to score very low rates.
- CommonBond has a major social responsibility mission—for every loan they fund, they put a kid through school in Ghana.
- SplashFinancial negotiates hard with individual banks and credit unions to score you a particularly low rate.
What’s the refinancing process like?
Once you’ve picked a lender you’re interested in, you can apply through their website. The process shouldn’t take more than about 20 minutes—but may vary depending on the lender.
During the application process, you'll be asked about:
- Your existing loans
- Your income
- Personal contact details
- The degree you hold
- Your existing job
- Where you live, and
- Where you went to school.
Once you submit this info, the lender will do a “soft pull” to determine your credit score. This doesn’t show up on your credit report, so know that's it's totally fine to check out several lenders.
After the soft pull, you'll receive initial offer. If you decide to proceed, the lender will then do a hard pull on your credit to get you a final offer.
If you pull the trigger on that, they’ll handle all the paperwork to switch your loan over from Discover to your new, lower-interest-rate loan. However, be sure to keep paying on your Discover loan until you've verified that the balance has been paid off by your new lender.
Is refinancing worth it?
Refinancing could save you a large chunk of change—and reset the terms on your student loan. If you have a Discover student loan, it’s definitely worth considering.
Curious about refinancing? See how much you could save. Check out Refi Ready.
.bmp)
