Consumer complaint received 2023-12-05
Company: DISCOVER BANK
State: PA
Product: Student loan
Sub-product: Private student loan
Issue: Struggling to repay your loan
Sub-issue: Problem lowering your monthly payments

Complaint:
On XX/XX/XXXX I called Discover seeking to reconsolidate my loans that are currently being serviced by them. I wanted to switch from a Variable rate to a Fixed rate in order to lower my interest rate and lower my monthly payments. I have been a loyal and responsible customer of this company for a significant number of years. Over the phone, I listed off information requested by the customer service representative including my current income, and agreed to a credit check. After punching in a few numbers, I was hastily denied private loan consolidation and refinance. When I informed the customer service representative that my estimated credit score, which I had checked before I called, was at XXXX, she stated that my credit score was not the problem, instead it was stated that my income is " too low '' to qualify for consolidation and refinance and thus a lower monthly payment. At the end of the call, I was informed that I would receive both a letter in the mail and an electronic letter informing me of this. I was told that the electronic letter would the available to me after 24 hours. 24 hours has come and gone, and I have yet to receive an electronic version of the letter. 

As I am stuck in a Variable rate loan, my monthly payments regularly increase. My latest payment was on XX/XX/XXXX and was for {$630.00}. This is a large increase from the last XXXX years- my payment from XX/XX/XXXX was for {$580.00} and my payment from XX/XX/XXXX was for {$510.00}. These are enormous increases in short periods of time. 

The fact that the reasoning behind my denial was that my income being too low strikes me as very strange and quite frankly, predatory. Since I currently pay {$630.00} a month with my current income, I fail to understand their claims that I would be unable to make a lower monthly payment. My thinking is that Discover wants as much money from me as it can get, and as quickly as possible, because during my phone call I was informed that I have " only 66 months left '' on my loans. I do not see how that could be true when my balance continues to increase- on XX/XX/XXXX my total balance was {$36000.00}. As of today, XX/XX/XXXX my total balance has increased overnight to {$36000.00}. 

As of XX/XX/XXXX, per payment I pay {$400.00} in interest and only {$230.00} in principle. Surely if I am able to make such astronomical payments on my current income, I would be able to make an even lower monthly payment on that very same income. I am not looking for anything other than refinancing my loans in order to lower my monthly payments so that I can continue to better my life and my journey to financial freedom. But Discover seems to want to keep customers stuck. I had no reason to believe that I would be denied, especially since I had received letters from Discover stating my eligibility for Cosigner Release on both XX/XX/XXXX and XX/XX/XXXX, which attests to my positive repayment history. So now that I have been denied, not only I am left in the same financial hole with Discover, I believe I also now will have an inquiry on my credit. 

This is the second time that I have been denied private loan consolidation by Discover- I was previously denied XX/XX/XXXX. At that time in my life, my salary was much less than I currently make, and the reasoning behind the XX/XX/XXXX denial cited on reason which was " Collection item on credit file '' and nothing at all about my income being too low. So the fact that the reasoning behind my XX/XX/XXXX denial is that my current income is too low is even more suspicious to me. It seems as though since my credit has been in great shape ever since my prior attempt at reconsolidating, Discover is reaching for any excuse to deny me the opportunity to consolidate and refinance for a lower interest rate and monthly payment in order to continue to receive a huge amount of money from me at a fast pace, since I make my monthly payments faithfully on time and in full. 

Discover services my XXXX private loans. On those loans I pay the following interest rates with my current salary- 9.250 %, 12.000 %, 15.000 %, and 15.250 %. On the Discover website, their Fixed rates offer interest rates of XXXX %. If I am able to pay the aforementioned interest rates with my current income, I don't see why they claim that my current income should hold me back from an interest rate in the 5.99 % XXXX % range. Plain and simple, I believe that Discover wants as much of my money as possible and as quickly as possible. Discovers website claims that " We Are Here To Help! ", but that has yet to be seen by me.

Company response to consumer: Closed with explanation