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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.

APR and Loan Cost Examples

For the range of interest rates effective on new applications as of July 8, 2015

  • The following examples depict the APR, monthly payment and total payments during the life of a $10,000 private loan with a single disbursement.
  • For variable rate loans, the 3-Month LIBOR is currently 0.375% and may change quarterly. This may cause the monthly payment to increase, the number of payments to increase or both.
  • Your actual student loan interest rate may be different than the rates in these examples and will be based on your credit history, which repayment option you choose and other factors, including your cosigner's (if any) credit history.
  • The deferment period is an example of the number of months a student is not required to make any payments of principal or interest, unless a student elects, during the application process, to make $25 in-school, fixed payments. It includes the amount of time the student is enrolled in school at least half-time and a grace period. The repayment period is the number of months over which the loan will be repaid.
  • Interest rates and APR examples are rounded up to the nearest hundredth of one percent.

There are two examples represented below.

  • The Deferred Payment examples assume no payments are made during the deferment period. Although you are not required to make payments until your loan enters repayment, you can make payments ahead of schedule at any time without penalty. By making payments ahead of schedule, you can reduce the total cost of your loan.
  • The In-School Payment examples assume you elected, during the application process, to make fixed payments of $25 each month while you are in-school and during your grace period. By selecting this option, you can reduce the amount of accrued interest capitalized when you finish your in-school and grace periods, thereby reducing the total cost of your loan.
Assuming you have 4 years of school remaining, and starting balance of $10,000
DEFERMENT PERIOD
(45 MONTHS in school
+ 6 MONTHS grace)
INTEREST RATE REPAYMENT
(180 MONTHS of equal payments)
LIFE OF LOAN
(231 MONTHS)
Repayment OptionTypeRangeMonthly PaymentTotal PaymentsAPR
DEFERRED PAYMENT
($0 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$77.78$13,9992.92%
Highest Starting Rate = 9.12%
(3-Month LIBOR + 8.74%)
$141.64$25,4948.53%
Fixed RateLowest Rate = 6.15%$107.45$19,3415.88%
Highest Rate = 11.99%$181.03$32,58410.99%
IN-SCHOOL PAYMENT
($25 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$69.15$13,6962.99%
Highest Starting Rate = 9.12%
(3-Month LIBOR + 8.74%)
$128.88$24,4468.68%
Fixed RateLowest Rate = 6.15%$96.80$18,6745.99%
Highest Rate = 11.99%$166.04$31,13411.18%
Assuming you have 2 years of school remaining, and starting balance of $10,000
DEFERMENT PERIOD
(21 MONTHS in school
+ 9 MONTHS grace)
INTEREST RATE REPAYMENT
(240 MONTHS of equal payments)
LIFE OF LOAN
(270 MONTHS)
Repayment OptionTypeRangeMonthly PaymentTotal PaymentsAPR
DEFERRED PAYMENT
($0 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$59.55$14,2902.96%
Highest Starting Rate = 7.62%
(3-Month LIBOR + 7.24%)
$96.71$23,2107.45%
Fixed RateLowest Rate = 6.15%$83.65$20,0726.04%
Highest Rate = 9.99%$120.49$28,9119.70%
IN-SCHOOL PAYMENT
($25 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$55.53$14,0512.99%
Highest Starting Rate = 7.62%
(3-Month LIBOR + 7.24%)
$90.82$22,5207.51%
Fixed RateLowest Rate = 6.15%$78.39$19,5366.09%
Highest Rate = 9.99%$113.49$27,9629.78%
Assuming you have 1 year of school remaining, and starting balance of $10,000
DEFERMENT PERIOD
(9 MONTHS in school
+ 9 MONTHS grace)
INTEREST RATE REPAYMENT
(240 MONTHS of equal payments)
LIFE OF LOAN
(258 MONTHS)
Repayment OptionTypeRangeMonthly PaymentTotal PaymentsAPR
DEFERRED PAYMENT
($0 monthly)
Variable RateLowest Starting Rate = 4.12%
(3-Month LIBOR + 3.74%)
$64.98$15,5944.09%
Highest Starting Rate = 7.62%
(3-Month LIBOR + 7.24%)
$90.53$21,7277.54%
Fixed RateLowest Rate = 6.49%$81.74$19,6166.44%
Highest Rate = 9.99%$110.87$26,6029.86%
IN-SCHOOL PAYMENT
($25 monthly)
Variable RateLowest Starting Rate = 4.12%
(3-Month LIBOR + 3.74%)
$62.38$15,3954.11%
Highest Starting Rate = 7.62%
(3-Month LIBOR + 7.24%)
$87.08$21,3227.57%
Fixed RateLowest Rate = 6.49%$78.58$19,2806.46%
Highest Rate = 9.99%$106.77$26,0449.90%
Assuming you have 2 years of school remaining, and starting balance of $10,000
DEFERMENT PERIOD
(21 MONTHS in school
+ 9 MONTHS grace)
INTEREST RATE REPAYMENT
(240 MONTHS of equal payments)
LIFE OF LOAN
(270 MONTHS)
Repayment OptionTypeRangeMonthly PaymentTotal PaymentsAPR
DEFERRED PAYMENT
($0 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$59.55$14,2902.96%
Highest Starting Rate = 7.62%
(3-Month LIBOR + 7.24%)
$96.71$23,2107.45%
Fixed RateLowest Rate = 6.15%$83.65$20,0726.04%
Highest Rate = 9.99%$120.49$28,9119.70%
IN-SCHOOL PAYMENT
($25 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$55.53$14,0512.99%
Highest Starting Rate = 7.62%
(3-Month LIBOR + 7.24%)
$90.82$22,5207.51%
Fixed RateLowest Rate = 6.15%$78.39$19,5366.09%
Highest Rate = 9.99%$113.49$27,9629.78%
Assuming you have 1 year of school remaining, and starting balance of $10,000
DEFERMENT PERIOD
(9 MONTHS in school
+ 9 MONTHS grace)
INTEREST RATE REPAYMENT
(240 MONTHS of equal payments)
LIFE OF LOAN
(258 MONTHS)
Repayment OptionTypeRangeMonthly PaymentTotal PaymentsAPR
DEFERRED PAYMENT
($0 monthly)
Variable RateLowest Starting Rate = 4.12%
(3-Month LIBOR + 3.74%)
$64.98$15,5944.09%
Highest Starting Rate = 8.87%
(3-Month LIBOR + 8.49%)
$100.94$24,2218.77%
Fixed RateLowest Rate = 6.49%$81.74$19,6166.44%
Highest Rate = 11.24%$122.51$29,39711.08%
IN-SCHOOL PAYMENT
($25 monthly)
Variable RateLowest Starting Rate = 4.12%
(3-Month LIBOR + 3.74%)
$62.38$15,3954.11%
Highest Starting Rate = 8.87%
(3-Month LIBOR + 8.49%)
$97.15$23,7398.79%
Fixed RateLowest Rate = 6.49%$78.58$19,2806.46%
Highest Rate = 11.24%$118.05$28,75511.11%
Assuming you have 2 years of school remaining, and starting balance of $10,000
DEFERMENT PERIOD
(21 MONTHS in school
+ 9 MONTHS grace)
INTEREST RATE REPAYMENT
(240 MONTHS of equal payments)
LIFE OF LOAN
(270 MONTHS)
Repayment OptionTypeRangeMonthly PaymentTotal PaymentsAPR
DEFERRED PAYMENT
($0 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$59.55$14,2902.96%
Highest Starting Rate = 7.62%
(3-Month LIBOR + 7.24%)
$96.71$23,2107.45%
Fixed RateLowest Rate = 6.15%$83.65$20,0726.04%
Highest Rate = 9.99%$120.49$28,9119.70%
IN-SCHOOL PAYMENT
($25 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$55.53$14,0512.99%
Highest Starting Rate = 7.62%
(3-Month LIBOR + 7.24%)
$90.82$22,5207.51%
Fixed RateLowest Rate = 6.15%$78.39$19,5366.09%
Highest Rate = 9.99%$113.49$27,9629.78%
Assuming you have 2 years of school remaining, and starting balance of $10,000
DEFERMENT PERIOD
(21 MONTHS in school
+ 9 MONTHS grace)
INTEREST RATE REPAYMENT
(240 MONTHS of equal payments)
LIFE OF LOAN
(270 MONTHS)
Repayment OptionTypeRangeMonthly PaymentTotal PaymentsAPR
DEFERRED PAYMENT
($0 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$59.55$14,2902.96%
Highest Starting Rate = 8.62%
(3-Month LIBOR + 8.24%)
$106.33$25,5188.41%
Fixed RateLowest Rate = 6.15%$83.65$20,0726.04%
Highest Rate = 11.24%$134.28$32,22110.87%
IN-SCHOOL PAYMENT
($25 monthly)
Variable RateLowest Starting Rate = 2.99%
(3-Month LIBOR + 2.62%)
$55.53$14,0512.99%
Highest Starting Rate = 8.62%
(3-Month LIBOR + 8.24%)
$99.99$24,7198.47%
Fixed RateLowest Rate = 6.15%$78.39$19,5366.09%
Highest Rate = 11.24%$126.68$31,12110.95%

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.
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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 . Our knowledgeable Student Loan Specialists are ready to help you anytime 24/7.

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.

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

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?

Quarter3-Month LIBORSet as WSJ 3-Month LIBOR on
July 1 - Sep 30, 20150.375%June 16, 2015
Apr 1 - Jun 30, 20150.375%Mar 17, 2015
Jan 1 - Mar 31, 20150.25%Dec 17, 2014
Oct 1 - Dec 31, 20140.25%Sep 16, 2014
July 1 - Sep 30, 20140.25%June 16, 2014
Apr 1 - Jun 30, 20140.25%Mar 17, 2014
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