Sallie Mae vs. Discover Student Loans – Bankrate.com | Vette Leader

Sallie Mae and Discover are two of the biggest names in student loans, offering private student loans for both undergraduate and graduate students. Sallie Mae offers borrowers a range of repayment options and extensive online resources to help students find financial assistance. Discover, on the other hand, is a more traditional bank that offers multiple opportunities for discounts.

key to take away

Sallie Mae is better suited for borrowers with excellent credit ratings to qualify for the lowest interest rates, while Discover is better suited for borrowers who need multiple years of funding.

Sallie Mae Discover
Interest charges 2% to 12.35% variable, 3.75% to 13.72% fixed (with Autopay) 2.99% to 12.59% variable, 4.99% to 13.99% fixed (with Autopay)
Refund Policy 10 to 20 years 15 to 20 years
loan amounts $1,000 up to 100% total cost of participation $1,000 up to 100% total cost of participation
advantages Four free months of Chegg; quarterly FICO score; Loans for students who attend less than half the time rewards for good grades; multi-year loan option; no credit fees
Disadvantages No clear leniency policy; few admission requirements disclosed; multiple fees One term option per loan; high interest rate caps; no co-signer release

Details as of July 21, 2022

Sallie Mae is one of the most famous companies offering student loans. Here’s what you should know when considering the lender.

advantages

  • Flexible repayment options for doctoral students: Sallie Mae graduate school loans come with a number of repayment flexibilities. For example, its MBA loans allow borrowers to make 12 interest payments after their grace period expires and be deferred for 48 months during an internship.
  • Quick release for co-signers: If you apply with a co-signer, you may be able to remove them from the loan and meet other eligibility requirements after just 12 on-time payments. Most other lenders that offer co-signer release require 24 or 36 payments.
  • Students attending less than half the time are eligible: Sallie Mae makes loans to students who attend school less than half the time, a rare occurrence among student loan lenders.

Disadvantages

  • Vague Forbearance Program: Sallie Mae is not disclosing any information about his indulgence program. There are no details on how to qualify for forbearance or how long it lasts.
  • No personalized tariffs can be called up without a credit check: Unlike many other lenders, Sallie Mae doesn’t offer specific interest rates unless you fill out a full application, which will result in a severe scrutiny of your credit report.
  • Only a few admission requirements disclosed: Sallie Mae does not disclose credit or income requirements, making it more difficult for borrowers to determine if the lender will work for them.

Discover offers a variety of student loans, although it may not be the right choice for everyone. Here are some of the pros and cons of the lender.

advantages

  • Cashback Bonus Available: One of Discover’s biggest benefits is the cashback bonus for students who earn a GPA of 3.0 or higher. This one-time bonus is worth 1 percent of the loan amount.
  • Perennial approval: Students can apply for a loan from Discover and receive multi-year funding from the company. In the following years, only a gentle credit check is required.
  • No late fees: While most student loan companies don’t charge application or closing fees, Discover takes it a step further and doesn’t charge late fees.

Disadvantages

  • Only one term available: Discover only offers a 15-year repayment period for undergraduates and a 20-year repayment period for graduate students, while other lenders offer a variety of repayment terms. If you want to change your repayment period, you will need to refinance with a different lender.
  • Co-signer sharing is not available: If you close a student loan through Discover with a co-signer, you cannot release them from the loan without refinancing.
  • High interest rates for borrowers with poor credit ratings: Borrowers with low credit scores can be charged incredibly high interest rates with Discover — around 14 percent on a fixed rate.

Sallie Mae and Discover can both be good student loan options; Both are reputable companies that have been in the student loan business for years.

Because Discover doesn’t offer co-signer approval, Discover is a better choice for students borrowing independently — though this only applies to students with excellent credit, as Discover’s interest rate caps are high. Discover can also be a good choice for borrowers who want to stay with one lender for each year they need student loans, since subsequent years of funding require only a gentle credit check.

On the other hand, Sallie Mae may be best suited for students who want a little more flexibility with their repayment. Doctoral students in particular benefit from longer grace periods, pure interest payments after graduation and the opportunity to defer loans during the stay or internship.

The best way to get a better idea of ​​which company is right for you is to compare the actual rates you might be getting. Unfortunately, neither Sallie Mae nor Discover offer pre-qualification — which means you have to go through a tough credit check to see your listings. You may want to start your search by pre-qualifying with lenders who only do a soft credit check; This will give you some benchmark interest rates. Then, if you’re interested in Sallie Mae or Discover, apply to both within the same week. While you still undergo a rigorous credit check, two closely related applications can be treated as a single request and should minimize the damage to your credit score.

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