Student Loans Compared: Discover Vs. Sallie Mae Student Loans
Both Discover and Sallie Mae are renowned national financial institutions offering private student loans to qualified borrowers. They each provide multiple private student loan options for different professional degrees.
Yet, both lenders differ from each other on various grounds. Let’s check out the major differences between them.
Discover Student Loans
Established in Greenwood, Delaware, Discover Bank provides student loans to professionals seeking to pursue graduate and undergraduate degree programs, law degrees, residency programs, and bar exams along with options for MBA students and health professionals.
The company has a strong portfolio of different private student loans that cover various educational tracks.
Who It’s Best For
- A Discover student loan is highly recommended for US citizens and permanent residents
- This is ideal for borrowers seeking to consolidate debt as it comes with low rates, flexible repayment options, and direct payment options
- The loan options are a perfect fit if student borrowers can bring along a cosigner as the approval is strictly dependent on credit scores
- The loan options also fit the requirements of borrowers who would like to choose from multiple repayment options. Discover accepts interest-only payments, deferred payments, and fixed payments
Pros and Cons
- The loan covers all expenses related to education costs
- Reduces the principal by around 1% when borrowers maintain a GPA of 3.0
- Benefit with a reduction of 0.25% on interest by opting for automated payment options
- Zero fees on loan processing charges
- Generous assistance programs
- Private and federal loans are available at a reduced rate of interest
- Single repayment terms reduce flexibility
- Applications can be made for a one-year loan only
- Cosigners are mandatory for undergraduate loans
How To Qualify
To qualify for a private loan from Discover, the borrower needs to meet the minimum credit score, be enrolled at least half-time, be an American citizen or permanent resident, and be at least 16 years or older. In addition to these eligibility criteria, the borrower must also make satisfactory progress based on the school’s parameters.
Borrowers can apply for personal student loans directly on the company's official website. After providing with required information like personal details, preferred payment options, loan amount desired, and other pertinent particulars, the borrower is likely to receive an approval notice when all the information and documents are verified.
Discover offers a 0.25% reduction on the loan interest to student loan borrowers who select automatic payments. However, apart from these incentives, the company doesn’t charge any other fees for loan processing or late fees. The lender will also help with a fixed or variable rate of interest for loans as per your convenience.
Sallie Mae Student Loans
Sallie Mae is among the oldest and most established private student loan lenders located in the United States. The lender offers various private student loan plans for graduate and undergraduate students, medical and dental professional students, career training, and MBA students.
Who It’s Best For
- Getting a private loan from Sallie Mae is best for borrowers who are attending certified degree programs or pursuing veterinary school certificates, bachelor’s degree, and master’s degrees
- Borrowers who have already exhausted federal student loan options, or who those pursuing a professional or graduate degree that are still holding undergraduate student loan balances
- Borrowers looking for higher loan limits even after obtaining bar study loans or residency loans
- For borrowers seeking a cosigner release option in the future
Pros and Cons
- Customized graduate loan options with flexibility in terms
- Career loans allow students to pursue professional courses outside traditional colleges
- Offers four free months of Study Smart - a homework support tool
- Grace period for undergraduate loans is six months and for some graduate loans, it is as much as 12 months or even 36 months
- Multiple repayment options and convenient rates
- Loans are available to non-American citizens as well and for students who are enrolled less than half-time
- No refinancing facilities provided
- No reduction in principle even after graduating
- Non-degree career loans are only provided at a variable interest rate
How To Qualify?
To qualify for a private student loan from Sallie Mae, the borrower needs to have a minimum credit score of 748 at approval time. The minimum age of the borrower needs to be 18 years or older. For younger applicants, a creditworthy and eligible cosigner is required.
Once all the required information and documents are provided to Sallie Mae, the lender will take a minimum of 15 minutes to verify the information and documents before approving the loan. Once approved, the borrower needs to select the interest rate as well as repayment options for the loan contract.
Sallie Mae doesn’t ask for any application fees at the time of applying for the loan. If the borrower makes any advance loan payments, there are no prepayment penalties incurred. The lender only charges around $25 or 5% late fees, depending on whichever amount is less.
When it comes to private student loans, both lenders prove to be amazing choices. The best option depends on the interest rates that are suitable as well as your eligibility criteria for the personal financial condition. Accordingly, review each lender’s requirements and your corresponding eligibility first before applying for the loan that fits your needs best.