When Dr. Brad Venghaus graduated from medical school, he left with $110,000 in debt hanging over his head. To deal with this massive amount of debt, Venghaus decided to refinance his medical school loans for new terms and better rates. In fact, refinancing was so beneficial that he was able to pay off all his debt in just five years.
Refinancing medical school loans has helped many doctors save thousands on their education debt. If you’d also like to pay off your medical school student loans fast, read on to learn how refinancing could bring you closer to financial freedom.
- Benefits of refinancing medical school loans
- You can refinance medical school loans more than once
- Apply with a cosigner for a lower rate
- Downsides of medical school loan refinancing
After realizing his six-figure loan debt came with a relatively high interest rate of 6.8%, Venghaus searched for ways to lower it. He discovered that refinancing could get him a better rate, as well as come with a host of other benefits.
1. Save money with a better interest rate
When you refinance medical school loans with a bank, credit union or online lender, you could qualify for a better interest rate — and save hundreds or even thousands of dollars on your debt as a result.
“I applied to about four or five of the big-name banks that refinance medical student loans,” Venghaus said. “They all gave me a quote for their best offers and I compared each of them.”
The most attractive offer reduced his 6.80% interest rate to 3.30%. Instead of spending over $41,906 on interest over 10 years, Venghaus would only pay $19,296. In effect, the simple process of refinancing saved him $22,610.
“The process of refinancing was quite easy,” Venghaus said. “Refinancing my loan saved me $10,500 just in residency.”
If you’re looking to refinance medical school loans, make sure to shop around with several lenders to find your best rate.
2. Restructure your medical school debt with new terms
Along with scoring a better rate, refinancing medical school debt lets you choose new repayment terms. For Venghaus, choosing a five-year term would help him meet his goal of getting out of debt as fast as possible.
“My student loans will be paid off five years after graduating from medical school,” he said. “It feels good to pay them off … ahead of schedule.”
Of course, choosing a shorter repayment term means your monthly payment could increase. If you can’t afford high payments, you can choose a longer term with lower monthly payments.
And remember, you can always make extra payments without penalty in the future if your salary increases.
3. Simplify repayment by combining your loans
A third benefit of medical school loan refinance involves combining multiple loans into one. If you’ve got several loans spread across different lenders and loan servicers, you might have a tough time tracking repayment.
Through refinancing, you can consolidate your private and federal student loans into one new loan with a single lender. As a result, you’ll only have to deal with making one payment each month.
That said, you don’t have to refinance all your loans; instead, choose the loans that will benefit from refinancing. If one of your loans already has a low interest rate, you probably won’t see much payoff from refinancing with a new lender.
Since Venghaus saved so much money refinancing his medical school student loans the first time, he decided to look into refinancing a second time for an even lower rate.
“I refinanced with SoFi for a five-year variable term at 2.80%,” he said. This 0.5% percentage point reduction helped Venghaus save even more money on his loans, allowing him to stay on track for his goal of paying his medical school loans off ahead of schedule.
There’s no limit to how many times you can refinance your student loans. If you find a better offer with a lower interest rate, you could repeat the process to save money. However, be careful to do the math to ensure it’s the right choice for you.
Refinancing student loans can get you better rates and terms, but not everyone can qualify. Before approving you for medical school loan refinance, lenders will check your credit and income. If you can’t meet their underwriting requirements, you might not qualify, let alone snag their best rates.
To boost your chances, you could try applying with a creditworthy cosigner. Your cosigner’s credentials could strengthen your application and get you better rates. But your cosigner will be equally responsible for your debt, and their credit could get hurt if you miss payments.
So make sure your cosigner understands exactly what signing on to your debt means for their finances. And before choosing a lender, find out if they offer cosigner release after a certain period of on-time repayment.
Applying for cosigner release, as well as refinancing medical school loans for a second time in your name alone, are two potential ways to relieve your cosigner of responsibility for your debt.
As Venghaus found out, refinancing medical school student loans can save you thousands of dollars. Plus, it lets you choose a repayment term that better fits your budget. You might even pay off your loans ahead of schedule.
But refinancing isn’t without its drawbacks. For one, most lenders require a strong credit score and high income. Without these credentials, you might not qualify for low interest rates — or get approved at all.
“For those new graduates with very high student loan debt, determine if Public Student Loan Forgiveness is an option or desire for you,” Venghaus said. “Refinancing your loans will forgo any option of student loan forgiveness.”
If you’re banking on these federal programs, refinancing probably isn’t for you. But if your priority is saving money on interest, refinancing could help.
Shop around for medical school loan refinance offers
If you’ve weighed the pros and cons of student loan refinancing and decided it’s right for you, make sure to shop around for offers. Every lender is different, and one might be able to give you a better interest rate than another.
Plus, don’t forget to look for additional perks and benefits, such as forbearance options or career coaching. By comparing your options, you can find a medical school loan refinance offer that saves you money and moves you closer to financial independence.
Interested in refinancing student loans?Here are the top 9 lenders of 2021!
|Lender||Variable APR||Eligible Degrees|
|1.88% – 6.15%1||Undergrad & Graduate|
|1.88% – 5.64%2||Undergrad & Graduate|
|2.50% – 6.85%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|1.99% – 6.59%5||Undergrad & Graduate|
|1.88% – 5.64%6||Undergrad & Graduate|
|1.90% – 5.25%7||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|2.13% – 5.25%8||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of June 1, 2021.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.48% APR to 5.79% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.88% APR to 5.64% APR (excludes 0.25% Auto Pay discount). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 36% (the maximum allowable for these loans). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 2.04% and 5.8% to the one month LIBOR. Earnest rate ranges are current as of 6/8/2021, and are subject to change based on market conditions.
Auto Pay Discount Disclosure
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Student Loan Refinancing Loan Cost Examples
These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest. com/terms-of-service, e-mail us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit earnest.com/licenses for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.
One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.
© 2021 Earnest LLC. All rights reserved.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for SoFi.
Fixed rates from 2.49% APR to 6.94% APR (with autopay). Variable rates from 1.99% APR to 6.59% APR (with autopay). All variable rates are based on the 1-month LIBOR and may increase after consummation if LIBOR increases; see more at SoFi.com/legal/#1. If approved for a loan your rate will depend on a variety of factors such as your credit profile, your application and your selected loan terms. Your rate will be within the ranges of rates listed above. Lowest rates reserved for the most creditworthy borrowers. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license #6054612; NMLS #1121636 (www.nmlsconsumeraccess.org). Additional terms and conditions apply; see SoFi.com/eligibility for details. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
6 Important Disclosures for Navient.
7 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 04/07/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay.
8 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are 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.