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% (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.

 

Interest Rate = 3 Month LIBOR + Margin

  • The Interest Rate will change when the 3-Month LIBOR changes.
  • The 3-Month LIBOR may change quarterly.
  • The Margin is based on your credit evaluation at the time of application and does not change.

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). If the 3-Month LIBOR is not available on 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?

Quarter 3-Month LIBOR Set as WSJ 3-Month LIBOR on
Apr 1 - Jun 30, 2019 2.625% Mar 17, 2019
Jan 1 - Mar 31, 2019 2.875% Dec 17, 2018
Oct 1 - Dec 31, 2018 2.375% Sep 16, 2018
Jul 1 - Sep 30, 2018 2.375% Jun 17, 2018
Apr 1 - Jun 30, 2018 2.250% Mar 17, 2018
Jan 1 - Mar 31, 2018 1.625% Dec 15, 2017
Oct 1 - Dec 31, 2017 1.375% Sep 15, 2017
July 1 - Sep 30, 2017 1.375% Jun 17, 2017
Apr 1 - Jun 30, 2017 1.25% Mar 17, 2017
Jan 1 - Mar 31, 2017 1.00% Dec 17, 2016
Oct 1 - Dec 31, 2016 0.875% Sep 16, 2016
July 1 - Sep 30, 2016 0.75% June 15, 2016
Apr 1 - Jun 30, 2016 0.75% Mar 17, 2016
Jan 1 - Mar 31, 2016 0.625% Dec 17, 2015
Oct 1 - Dec 31, 2015 0.375% Sep 16, 2015
July 1 - Sep 30, 2015 0.375% June 16, 2015
Apr 1 - Jun 30, 2015 0.375% Mar 17, 2015
Jan 1 - Mar 31, 2015 0.25% Dec 17, 2014
Oct 1 - Dec 31, 2014 0.25% Sep 16, 2014
July 1 - Sep 30, 2014 0.25% June 16, 2014
Apr 1 - Jun 30, 2014 0.25% Mar 17, 2014

 


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