When people think about high-earning careers, “doctor” and “lawyer” often come to mind. And although these careers can undoubtedly lead to a substantial payday for some, they don’t come without their fair share of student loan debt and hard work.
And anyone studying to be a doctor knows that the lucrative part of this career doesn’t come until after a few grueling and lower-paying years as a medical resident. (All the while student loan debt taken on for medical school is waiting to be repaid.)
Job search site Glassdoor reports an average salary of $56,246 for medical residents in the U.S. And how much student loan debt is being taken on at the same time? According to the Association of American Medical Colleges, a median of $190,000.
So how can medical residents catch a break as they finish out their training and try not to worry about the six figures of debt they have? Finance company SoFi is hoping to provide that break with their new product: medical resident student loan refinancing.
SoFi launches medical resident student loan refinancing
SoFi is already a major player in student loan refinancing — so what’s so different with its new medical resident student loan refinancing compared to its other offerings?
With typical student loan refinancing, your approval depends on factors that often require a solid credit score and income. If approved, you’re locked into the rate and repayment period you chose.
But with medical student loan refinancing, you don’t have to wait until you’re at maximum earning potential to refinance. And if you’re approved, you only have to pay $100 per month during your residency or fellowship.
This low payment can make a big difference for those earning relatively little compared to their student debt load. Many choose to defer their loans during this time frame, but that doesn’t always stop the interest on their debt from compounding. SoFi says their product offers an affordable way to stay on top of that interest.
Here are some details on SoFi’s medical resident refinancing:
- You can include federal and private student loans.
- You’ll pay $100 per month for up to 54 months during your residency or fellowship.
- Interest on your refinanced loans won’t compound during this time frame.
- You can choose from a fixed or variable interest rates.
- In addition to the number of years you have left in your residency, you can choose a repayment period of 5, 7, 10, 15, or 20 years.
- Once you either leave or complete your residency, your amortized payment amount and loan schedule will kick in, and your monthly payment will increase.
- You must have up to four years left as a medical resident or fellow and owe more than $10,000 to qualify.
- You can’t apply until you’ve been matched with a medical residency or fellowship.
The pros and cons of refinancing as a medical resident
SoFi’s medical resident student loan refinancing enables you to lock in a lower rate for your student loans, while also giving you an affordable way to start paying them down now.
But is this product a good idea for you? Here are some things to consider.
Pros of refinancing your student loans as a medical resident:
- You can try to lock in a lower interest rate now without waiting until you earn more.
- You have an alternative to deferring your student loans to save money, one that enables you to stay on top of the interest payments.
- You can use this program to switch to a new student loan servicer if you’re not happy with the one (or several) that you currently have (SoFi works with MOHELA on this product).
- Although the program offers the $100 minimum payment for four years, you can get a six-month extension for a total of 54 months if your residency or fellowship is extended.
- After you have an offer letter in hand for full-time employment, you can try to refinance your student loans again for an even lower rate.
Cons of refinancing your student loans as a medical resident:
- If you refinance federal student loans, you’ll forever forfeit access to income-driven repayment plans and federal student loan forbearance and deferment.
- Similarly, refinancing your federal loans will make you unable to apply for student loan forgiveness.
- There is no grace period for the medical resident student loan refinancing product.
- If the $100 minimum payment doesn’t cover the interest on your refinanced loan, you might end up with a larger balance than you borrowed, unless you pay enough extra to cover the interest for the entire time you’re in a residency or fellowship.
- If you want to switch to a fellowship at the end of your residency, you might not be able to extend the $100 minimum payment.
How to find out more about medical resident student loan refinancing
Financial decisions like this are never easy to make. Don’t be shy about posing as many questions about this as you would in class.
Once you have all the answers, you can know you’re choosing the best way for you to build a strong student loan repayment plan. And you can use that extra mental bandwidth to focus on what you really want — succeeding at this next phase of your career.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Rates (APR)||Eligible Degrees|
|Get real rates from up to 4 Lenders at once
Check out the testimonials and our in-depth reviews!
|2.56% - 7.40%||Undergrad & Graduate||Visit SoFi|
|2.57% - 6.32%||Undergrad & Graduate||Visit Earnest|
|2.58% - 8.12%||Undergrad & Graduate||Visit Lendkey|
|2.80% - 7.02%||Undergrad & Graduate||Visit Laurel Road|
|2.54% - 6.65%||Undergrad & Graduate||Visit CommonBond|
|2.90% - 8.34%||Undergrad & Graduate||Visit Citizens|