If you graduated with hundreds of thousands of medical school debt, you’re not alone — the average medical school debt is $251,600. However, when you factor in interest charges, you can end up paying back a lot more.
With such high balances, refinancing medical school loans makes a lot of sense for medical school graduates. It could help you save money and get out of debt faster, so it’s a natural choice for healthcare professionals.
In this post:
- Refinancing medical school loans during residency
- Refinancing your loans after residency
- How to refinance your medical school loans
- Refinancing medical school loans FAQ
Refinancing medical school loans during residency
One way to improve your finances is to refinance during your residency.
Unlike most student loan refinancing, which you do after you’ve graduated, some lenders offer refinancing to medical students while they’re still in residency. This allows you to take advantage of lower interest rates while making small payments toward your debt.
But there are a couple things to keep in mind:
- Because the student loan payments are so low, you’ll likely pay more in interest. In fact, your loan balance can exceed far more than you originally borrowed. It might still be worth it in the long run, but it’s something to carefully consider before submitting your application.
- If you have federal student loans, refinancing during your residency might not make sense. Instead, you might opt to apply for mandatory forbearance, income-driven repayment, or graduated repayment. An IDR plan sets your monthly payment at a percentage of your discretionary income.
Refinancing your loans after residency
The income boost you can expect when you finish your residency often means you can refinance your medical school loans to take advantage of lower interest rates. With a higher income, you have more refinancing options.
If you’re looking to refinance after residency, check out the refinancing companies in the table below. You can request rates from all of Credible’s partner lenders by filling out just one form (instead of one form for each) and without affecting your credit score.
| Lender | Variable rates from (APR) | Fixed rates from (APR) | Loan maximum | Min. credit score |
|---|---|---|---|---|
 Advantage review | N/A | 4.54%+ | $500,000+ | 670 |
 Brazos review | 4.01%+ | 3.91%+ | $250,000 | 690 |
 Citizens Bank review | 2.29%+¹ | 3.45%+¹ | $350,000 (depending on degree type) | Does not disclose |
 College Ave review | 2.62%+2 | 3.54%+2 | $300,000 (depending on degree type) | Does not disclose |
 EDvestinU review | 4.64%+5 | 4.93%+5 | $200,000 | 750 |
 ELFI review | 2.39%+3 | 3.14%+3 | None | 680 |
 MEFA review | 4.08%+ | 3.95%+ | None | 670 |
 PenFed review | 2.42%+ | 3.48%+ | $300,000 | 670 |
 RISLA review | N/A | 3.49%+ | $250,000 (depending on degree type) | 680 |
 SoFi review | 2.31%+4 | 3.46%+4 | Up to the full balance of your qualified education loans | Does not disclose |
| Compare personalized rates from multiple lenders without affecting your credit score. 100% free! |
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All APRs reflect autopay and loyalty discounts where available | 1Citizens Bank Disclosures | 2College Ave Disclosures | 3 ELFI Disclosures | 4SoFi Disclosures | 5EDvestinU Disclosures |
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Citizens Bank Education Refinance Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate ("LIBOR") published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of November 1, 2019, the one-month LIBOR rate is 1.80%. Variable interest rates range from 2.15%-8.82% (2.15%-8.82% APR) and will fluctuate over the term of the borrower's loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 3.45%-9.02% (3.45%-9.02% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan. |
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How to refinance your medical school loans
Refinancing your medical school loans is a quick and easy process; it can be completed in just a few minutes with a few simple steps.
1. Ensure that refinancing is right for you
Make sure that you understand how refinancing works and what federal benefits you’ll be giving up (if any). If you plan on using federal benefits, like income-driven repayment plans, refinancing might not be right for you.
2. See if you qualify
Every student loan refinancing lender has different qualification guidelines. But some things they look for in a borrower are that you have:
- Good to excellent credit (or a creditworthy cosigner)
- A steady income (some have minimum requirements)
- U.S. citizenship or permanent residency
3. Compare multiple lenders
Once you’ve decided to refinance your loans, it’s a good idea to compare student loan refinancing lenders to ensure you get the lowest rates and best terms.
4. Submit your application
Once you’ve decided on a lender, gather any documents you might need — like pay stubs or loan statements — and complete the application.
You can do all of the above if you use Credible to compare lenders.
Frequently asked questions: Refinancing medical school loans
You should do your research and ensure student loan refinancing is right for you before applying for a refinance loan. Here are some answers to some frequently asked questions to help you make a decision.
What’s the best way to pay off medical school debt?
One of the best ways to pay off medical school debt is to refinance. Here’s how student loan refinancing can help:
- You could save money. If you have good credit, you can qualify for a lower interest rate, helping you save thousands over the length of your loan.
- You could become debt-free sooner. With a lower rate, more of your payment goes toward the principal rather than interest, helping you pay off your debt ahead of schedule.
- You might get a lower monthly payment. You’ll have the option of extending your repayment term. With this choice, you’ll pay more in interest, but you’ll get a lower monthly bill.
How much money can I save by refinancing?
The amount of money you can save by refinancing can be significant. For example, if you have average medical school debt of $251,600 that you’re paying 6.6% interest on with 10 years left in your repayment. Over the life of your loan, you’d repay a total of $343,695.
But let’s say you refinanced that loan and qualified for a ten-year loan at 5% interest. By the time you repaid your loan, you’d repay just $320,233. By taking just a few minutes to refinance your loans, you’d save about $23,400 in interest.
If you’d like to estimate how much you could save, check out our student loan refinancing calculator.
How can I get my medical school loans forgiven?
Your federal medical school loans are eligible for Public Service Loan Forgiveness (PSLF). PSLF is a loan program that forgives your remaining loan balance after you make 120 qualifying payments (if you work for an eligible non-profit organization or government agency).
Although private student loans aren’t eligible for PSLF, there are a few state repayment assistance programs that will help repay a portion of your student loans if you commit to work in an underserved area for a certain term.
Does refinancing have any downsides?
Student loan refinancing can be an effective tool to manage your debt, but there are some drawbacks if you have federal loans.
Once you refinance, you’ll lose out on federal benefits like access to income-driven repayment plans, eligibility for Public Service Loan Forgiveness (PSLF), and the ability to place your loans into forbearance or deferment.
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