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If you graduated with hundreds of thousands of medical school debt, you’re not alone. According to the Association of American Medical Colleges, the median student loan debt for the class of 2017 graduates was $192,000. 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.

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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, allowing you to take advantage of lower interest rates while making small payments toward your debt.

However, because the student loan payments are so low, you should know that you’ll likely pay more in interest; in fact, your loan balance can grow to 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, you might decide that refinancing during your residency doesn’t make sense. Instead, you might opt to apply for an income-driven repayment plan, which can be a smart strategy.

With an IDR plan, your loan servicer extends your repayment term to 20 to 25 years and sets your monthly payment at a percentage of your discretionary income. Depending on your income, family size, and loan balance, you can dramatically reduce your monthly bill.

For medical school graduates, it can make sense to sign up for an income-driven repayment plan while you complete your residency.

Refinancing your loans after residency

Afterward, when you’re working and making a solid income, you can refinance your medical school loans to take advantage of low interest rates and pay off your debt early. With a higher income and the ability to make regular loan payments, you have more refinancing options.

If you’re looking to refinance after residency, you can check out the refinancing companies in the table below who compete for your business through Credible. You can request rates from all of these partner lenders by filling out just one form (instead of one form for each) and without affecting your credit score.

LenderVariable rates from (APR)Fixed rates from (APR)Check rates from multiple lenders in 2 min
advantage education loan consolidationN/A4.54%+Get Rates
Advantage review
brazos student loan refinancing2.00%+3.10%+

Get Rates
Brazos review
citizens bank student loans2.15%+¹3.45%+¹Get Rates
Citizens Bank review
college ave student loans2.49%+23.54%+2Get Rates
College Ave review
edvestinu student loan consolidation4.66%+4.93%+Get Rates
EdvestinU review
elfi student loans2.39%+33.14%+3Get Rates
ELFI review
mefa refinancing3.33%+3.60%+Get Rates
MEFA review
penfed purefy student loan consolidation2.42%+3.48%+Get Rates
Penfed review
rhode island student loan authority refinancingN/A3.49%+Get Rates
RISLA review
sofi student loan refinancing1.81%+43.46%+4Get Rates
SoFi review
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All APRs reflect autopay and loyalty discounts where available | 1Citizens Bank Disclosures | 2College Ave Disclosures | 3 ELFI Disclosures | 4SoFi Disclosures

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.

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 your student loan debt is to refinance. Here’s how student loan refinancing can help:

  1. 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.
  2. 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.
  3. 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 $192,000 in student loans — the average for medical school graduates — at 7% interest and ten years left in your repayment. Over the life of your loan, you’d repay a total of $267,514.

But let’s say you refinanced that loan and qualified for a ten-year loan at 4% interest. By the time you repaid your loan, you’d repay just $233,269. By taking just a few minutes to refinance your loans, you’d save over $34,000 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.

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 multiple 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.

About the author
Kat Tretina
Kat Tretina

Kat Tretina is an authority on student loans and a contributor to Credible. Her work has appeared in publications like the Huffington Post, Money Magazine, MarketWatch, Business Insider, and more.

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