MEDICAL SCHOOL LOANS

Yes, both federal and private student loans for medical school are still available during the COVID-19 pandemic. Keep in mind that it’s generally best to take out federal student loans first. This is mainly because these loans come with federal benefits and protections, such as access to income-driven repayment (IDR) plans and student loan forgiveness programs.

If you decide to get a private student loan, be sure to consider as many lenders as you can. This way, you can find a loan that best suits your needs.

Before you take out a private student loan, it’s important to take the time to shop around and consider as many lenders as possible so you can find the right loan for you.

Here are several important points to compare as you research your options:

• Interest rate: Your interest rate is a major factor when it comes to how much you’ll actually pay over the life of your loan. Generally, the better your interest rate, the lower your overall loan cost will be.
• Repayment terms: You’ll typically have five to 20 years to repay a private student loan, depending on the lender. It’s usually best to choose the shortest term you can afford to keep your interest costs as low as possible. Several lenders also offer lower interest rates to borrowers that opt for shorter terms.
• Loan amounts: With a private loan, you might be able to borrow up to your school’s cost of attendance. However, other lenders have lower loan maximums that you’ll need to keep in mind. 
• Fees: Some lenders charge fees on private student loans — for example, origination fees or prepayment penalties. These can increase your overall loan cost. Note that if you take out a loan with one of Credible’s partner lenders, you won’t have to worry about application, origination, or disbursement fees.
• Discounts: Depending on the lender you choose, you might be able to take advantage of rate discounts. For example, some lenders offer a discount to borrowers who sign up for automatic payments. And others provide a rate discount to borrowers who already have an account with them.

If you’re ready to apply for a private medical school loan, follow these four steps: 

1. Fill out the FAFSA. Your first step when it comes to paying for school should be completing the Free Application for Federal Student Aid (FAFSA). Your school will use your FAFSA results to determine which federal student loans and other federal financial aid you’re eligible for. Keep in mind that some federal aid is given on a first-come, first-serve basis — so it’s wise to apply as early as possible, especially if you have high financial need.
2. Apply for scholarships and grants. Unlike student loans, college scholarships and grants don’t have to be repaid — essentially making them free money for school. There’s no limit to how many scholarships and grants you can get, so it’s a good idea to apply for as many as you can. Medical students might also be eligible for school-based scholarships or fellowship opportunities.
3. Take out federal student loans. If you need to borrow for school, it’s generally best to rely on federal student loans first since they come with major federal benefits and protections. After you submit the FAFSA, your school will send you a financial aid award letter detailing what federal student loans and other federal financial aid you qualify for. You can then decide which aid you’d like to accept.
4. Use private loans to fill the gaps. After you’ve exhausted your scholarship, grant, and federal student loan options, private student loans could help fill any financial gaps left over. These loans are provided by private lenders, including online lenders as well as traditional banks and credit unions. Before you take out a private loan, remember to consider as many lenders as you can — this way, you can find the right loan for your situation.

Yes, you can. Medical school students could be eligible for two types of federal student loans, which include:

• Direct Unsubsidized Loans: These loans are available to graduate and professional students regardless of financial need. Keep in mind that unlike with undergraduate Direct Subsidized Loans, you’re responsible for all of the interest that accrues on unsubsidized loans.
• Grad PLUS Loans: These are a kind of Direct PLUS Loan available to students who want to pay for grad school or a professional program like medical school. Unlike Direct Unsubsidized Loans, Grad PLUS Loans require a credit check. They also generally have higher interest rates.

You're typically not required to make student loan payments while you're still in school. Both federal and private student loans offer in-school deferment as long as you meet certain requirements, such as at least half-time enrollment. So, any medical school loans you take out likely won't come due until six months after you graduate.

But keep in mind that interest will continue to accrue on your loans (if you have Direct Subsidized Loans the federal government will pay the interest that accrues while you’re in school at least half-time). So, if you're able to make payments between your undergraduate program and medical school, it can help you save money in the long run. If your budget can handle it, making interest-only monthly payments while you're in medical school can also help reduce your overall interest costs.

This short-term sacrifice will keep your lender from capitalizing the unpaid interest when you graduate and adding it to your principal balance. It’s worth it to make payments toward your interest while you’re in school as it could decrease your monthly loan payments and total interest charges.

Making on-time payments on your undergraduate and medical school loans while you're still in school can also help you build a positive credit history.

As of 2021, between 76% to 89% of medical students took out student loans while they were attending medical school. On average, graduates leave school with a median student loan debt of $200,000, and it typically takes 13 years to pay down the debt.

Keep in mind, though, that these are just averages. Whether or not you take out loans to cover medical school costs, and how much money you borrow, will depend on your school of choice, the amount of financial aid you receive, how much you've saved for college costs, and other factors.

Additionally, you can pay down medical school loans faster after graduation in several ways, including refinancing, student loan repayment assistance programs for medical professionals, and loan forgiveness programs.

As you make plans for medical school, it’s important that you take time to consider the financial aspect of your medical education and how to limit the funds you borrow, so you can get a head start when you begin your career.

If you’re considering federal student loans for medical school, here are a few potential benefits to keep in mind:

• Fixed interest rates: All federal student loans come with fixed interest rates, meaning your payments will stay the same throughout the life of your loan.
• Federal protections: As a federal loan borrower, you’ll have access to federal benefits and protections, such as IDR plans as well as deferment and forbearance options.
• Potential loan forgiveness: There are several federal student loan forgiveness programs available to healthcare professionals. For example, if you work for a nonprofit or government agency and make qualifying payments for 10 years, you might be eligible for Public Service Loan Forgiveness (PSLF).

There are also some possible drawbacks to keep in mind before taking out a federal loan, such as:

• Student loan limits: Medical school students can borrow only up to $20,500 in Direct Unsubsidized Loans each year. However, you might be able to borrow up to your school’s cost of attendance with Grad PLUS Loans or private student loans.
• Higher interest rates: If you have excellent credit, you might qualify for a lower interest rate on a private loan compared to what you’d get with a federal loan.
• Can only get a lower interest rate through refinancing: The only way to potentially reduce your federal student loan interest rate is through refinancing. But if you refinance your federal loans, you’ll lose access to your federal benefits. 

Private student loans for medical school come with their own pros and cons to consider, too. Here are some potential advantages to think about:

• No application deadline: Unlike federal student loans, private student loans can be applied for at any time.
• Higher loan amounts: Depending on the lender you choose, you might be able to borrow up to your school’s cost of attendance with a private student loan.
• Lower interest rates: If you have excellent credit, you might qualify for a lower interest rate on a private loan compared to a federal loan.

There are some possible disadvantages to keep in mind, too, such as:

• Fewer options for poor or no credit: You’ll typically need good to excellent credit to qualify for a private student loan — which means you could have a hard time qualifying if you have poor or no credit.
• No federal benefits: Private student loans don’t come with federal benefits and protections.
• Lack of repayment options: Private loans generally don’t provide the same repayment options as federal loans. For example, you likely won’t be able to sign up for an IDR plan or a graduated repayment plan. 

If you decide to take out a private student loan for medical school, remember to shop around and consider as many lenders as possible to find the right loan for your needs.

Credible makes this easy: You can compare your prequalified rates from multiple lenders in two minutes, without affecting your credit score.

While eligibility criteria can vary by lender, there are a few common requirements that you’ll likely come across, including:

• Good credit: Private lenders typically prefer borrowers to have good to excellent credit — a good credit score is usually considered to be 700 or higher. There are also some lenders that offer student loans for bad credit, but these loans generally come with higher interest rates compared to good credit loans.
• Verifiable income: Some lenders have a minimum income requirement while others don’t — but in either case, you’ll likely need to show proof of income.
• Low debt-to-income ratio: Your debt-to-income (DTI) ratio is the amount you owe in monthly debt payments compared to your income. You’ll generally need a DTI ratio no higher than 40% for a private student loan — though some lenders might require a lower ratio than this.

The credit score you’ll need to take out a student loan without a cosigner will depend on the type of student loan you get. Here’s what you can expect when it comes to graduate student loan credit information for medical school loans:

• Direct Unsubsidized Loans don’t require a credit check.
• Grad PLUS Loans do require a credit check. To be eligible, you must not have an adverse credit history. This doesn’t mean you’ll need a minimum credit score, though. Instead, you can’t have negative credit information — such as a default, foreclosure, or bankruptcy — within the past five years.
• Private student loans generally require good to excellent credit, which usually means a credit score of at least 700. Remember that while some lenders accept lower credit scores than this, these loans tend to have higher interest rates.

How much you can borrow in student loans will depend on the kind of loan you choose. Here are the student loan limits you can generally expect for medical school:

• Direct Unsubsidized Loans: Up to $20,500 per year ($138,500 aggregate limit)
• Grad PLUS Loans: Up to your school’s cost of attendance (minus any other financial aid you’ve received)
• Private student loans: Up to your school’s cost of attendance (depending on the lender)

Federal student loan rates are set by Congress each year, and the exact rate you get will depend on the type of loan you choose. Here are the rates you can expect for the 2021-2022 academic year: 

• Direct Unsubsidized Loans (for graduate and professional students): 5.28%
• Direct PLUS Loans: 6.28%

Private student loan rates, on the other hand, are determined by individual lenders according to market conditions. Other factors — such as your credit score and the repayment term you pick — will also impact the rate you’re offered. 

Here are the rates you can expect on private student loans with Credible’s partner lenders:

• Fixed rates starting at: 3.65% APR
• Variable rates starting at: 5.09% APR

If you’re looking to get the most optimal rate possible on a private loan, there are a few strategies that could help, such as:

• Have good credit. Your credit is one of the largest factors when it comes to the interest rates you qualify for. In general, the higher your credit score, the better the rates you’ll get. If you have poor or no credit, it could be a good idea to focus on building your credit to qualify for lower rates in the future. There are several potential ways to do this, such as paying all of your bills on time or becoming an authorized user on the credit card account of someone you trust.
• Apply with a cosigner. If you’re struggling to get approved for a private student loan, having a creditworthy cosigner could improve your chances. Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own.
• Compare lenders. Taking the time to shop around and compare your options from as many lenders as you can is a good way to find a cost-effective loan that suits your needs. 

Medical school can be extremely expensive, which is why medical school graduates leave school with an average of $215,900 in student loan debt. It typically takes about 13 years to pay off medical school debt — though the exact time it will take can vary depending on the type of loans you have as well as your repayment strategy.

For example, if you make federal student loans and make payments on the standard repayment plan, it will take 10 years to pay them off. However, if you sign up for an IDR plan or opt to consolidate your loans into a Direct Consolidation Loan, you could extend your repayment term up to 25 or 30 years. 

Or if you have private student loans, you could have a repayment term ranging from five to 20 years, depending on the lender.

There are several medical school loan forgiveness programs available to healthcare professionals, such as:

• Public Service Loan Forgiveness: If you work for a government or nonprofit organization and make qualifying payments for 10 years, you could be eligible to have your federal loans discharged through the PSLF program.
• National Health Service Corps (NHSC) Loan Repayment Program: If you agree to work for at least two years at an approved site, you could have up to $50,000 of your loans repaid.
• National Institutes of Health (NIH) Repayment Programs: There are eight Loan Repayment Programs offered through the NIH to doctors and scientists who perform biomedical or biobehavioral research. In return, you could receive up to $50,000 per year in loan repayment.
• State-based physician loan forgiveness: Many states also provide their own loan repayment programs to attract and retain doctors in their area.

Unfortunately, private student loan forgiveness doesn’t exist. However, there are other options that could help you more easily manage and repay private loans, such as refinancing.

The best medical student loan lenders are ones that provide competitive interest rates, a wide selection of loan terms, inclusive eligibility requirements, and responsive customer service.

To find the best loan for your needs, it’s important to shop around and compare as many lenders as you can. Here are some of the most important details about the loans offered by Credible’s top medical school student loan lenders:

• Ascent: If you have poor or fair credit, Ascent could be a good option for a medical school loan. You can borrow $2,001 to $200,000 (depending on if your credit is tested) with repayment terms from seven to 20 years (depending on whether you choose a fixed or variable rate). Ascent medical school loans also provide a 36-month grace period after you leave school.
• Citizens: With Citizens, you can borrow $1,000 up to $180,000 or $350,000 (depending on your degree) with a student loan specifically designed for medical students. Terms range from five to 15 years. 
• College Ave: With College Ave, you can borrow $1,000 up to 100% of your school-certified cost of attendance (minus any other financial aid you’ve received) with terms from five to 20 years (depending on degree type). College Ave provides a 36-month grace period on medical student loans and allows payments to be deferred during residency.
• Custom Choice: The Custom Choice Loan ranges from $1,000 to $99,999 annually ($180,000 aggregate limit) with three- or five-year terms. Additionally, if you graduate with at least a bachelor’s degree, you could be eligible for a 2% principal reduction. 
• EDvestinU: If you have excellent credit, EDvestinU might be a good option for a medical school loan. You can borrow $1,000 up to 100% of your school’s cost of attendance ($200,000 aggregate limit) with terms from seven to 15 years. 
• INvestED: If you plan to live or attend school in Indiana, INvestEd might be a good choice. You can borrow $1,001 up to 100% of your school’s cost of attendance (minus any other financial aid you’ve received) with terms from five to 15 years. 
• MEFA: With MEFA, you can borrow $1,500 up to your certified cost of attendance with a 15-year term. Keep in mind that you must attend a nonprofit or public university to qualify for a MEFA loan — for-profit schools aren’t eligible.