Student Loan Interest Rates

(for new applications)

We provide the choice of fixed or variable interest rates. Interest rates for private student loans are credit based. Unlike federal student loans, the interest rate is not the same for every borrower. Students with better credit or students applying with a creditworthy cosigner may receive a better interest rate. Learn more about interest rates.

When evaluating student loan options, there are lots of factors to consider. We encourage you to consider fees, interest rate, monthly payment and total loan cost. Learn more about evaluating student loans.

If your application was submitted prior to June 1, 2014, your interest rate is based on the Prime Index. Applications submitted on or after June 1, 2014, will have an interest rate based on the 3-Month LIBOR.

• A fixed interest rate is set at the time of application and does not change during the life of the loan
  
  
• A variable interest rate may change quarterly during the life of the loan, if the 3-Month LIBOR changes. This may cause the monthly payment to increase, the number of payments to increase or both.The 3-Month LIBOR is currently xxx.
  

About Student Loan Interest Rates and APR

What is an interest rate?

• The interest rate is used to calculate the actual amount of interest that accrues on your student loan.
  
  
• For example, if your principal loan balance is $10,000 and your interest rate is 10% (no payments are due and you make no payments), then your loan will accrue $1,000 (= $10,000 x 0.10) in interest in one year.

What is an APR?

• The Annual Percentage Rate (APR) takes into account the interest rate, fees (if any), length of your deferment period and how interest capitalizes.
  
  
• The APR is a number you can use to compare loans from different lenders since their interest rates, fees, deferment options and capitalization policy may differ.
  
  
• The APR does not represent the rate at which interest accrues.
  
  
• The APR may be different during the deferment period and the repayment period.

Why would the interest rate be different from the APR?

• Discover Student Loans have zero fees, and no interest capitalization during the deferment period - as a result, the deferment period APR will be less than the interest rate.
  
• For our student loans, accrued interest capitalizes at the start of the repayment period - since we do not charge fees, and assuming you make all your scheduled payments on time, the repayment period APR will be equal to the interest rate.

About Variable Interest Rates and 3-Month LIBOR

Variable interest rates for new Discover Student Loans are calculated as the 3-Month LIBOR plus the applicable Margin percentage. The interest rate will never be higher than 18% per year, regardless of the 3-Month LIBOR.

For questions about the interest rates for your existing Discover Student Loans, call us at 1-800-STUDENT. Our knowledgeable Student Loan Specialists are ready to help you anytime 24/7.

When does the 3-Month LIBOR change and how is its value determined?

For new loans, the 3-Month LIBOR will change quarterly on each January 1, April 1, July 1 and October 1 (the "interest rate change date"), as published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). In the event that more than one 3-month LIBOR Index rate is published, the rate will be the highest rate published. If the 3-month LIBOR is temporarily unavailable and not published fifteen days prior to the interest rate change date, then we will use the immediately preceding published 3-month LIBOR Index rate. The 3-Month LIBOR is a pricing index and does not represent the lowest or best interest rate available to a borrower at any bank at any given time.

What is the current 3-Month LIBOR value?

3-Month LIBOR is the current Index and is subject to change with notice.