Refinancing with Earnest
Refinancing rates from 2.50% APR. Checking your rates won’t affect your credit score.
For many new graduates, a starting salary of $103,874 is just a dream. But if you’re a pharmacist, that’s the median pay you can expect for an entry-level position. In fact, the median salary for pharmacists of all experience levels is a comfortable $122,230, according to the Bureau of Labor Statistics.
But here’s the catch: Before you can snag that high income, you have to spend four years in pharmacy school. The average pharmacy student graduates with $108,407 in student debt, according to the 2014 National Pharmacist Workforce Survey.
Even with a high salary, your net worth could fall well below zero for years to come. Fortunately, there are ways to make your debt more manageable. Here are the best student loan strategies that will get you out of debt as fast as possible.
1. Refinance your student loans with a private lender
One reason student loans are so difficult to pay off is their constant accrual of interest. Let’s say you graduated with $108,000 in student loans. Altogether, the weighted average interest rate on this hypothetical debt is 6.80%.
On a 10-year repayment plan, you’d end up paying over $41,000 in interest alone. But if you refinance your loans, you could keep much of that $41,000 in your bank account.
When you refinance, you work with a private lender that assumes all your old debt and issues you one loan with better terms. Often, this can include a lower interest rate. With a high loan balance, lowering your interest rate by just one percentage point can mean the difference of thousands of dollars over the life of your loan.
Let’s say you refinance your student loans and score a fixed interest rate of 4.99% on your $108,000 ball-and-chain. Over 10 years, you’d pay just over $29,000 in interest — almost $12,000 less than you would at a 6.80% rate.
And with an interest rate of 3.50%? You’d save about $21,000 over the life of your loan.
Some lenders offer fixed rates as low as 1.95% and variable rates starting from 2.49%. Variable rates can decrease or increase over time, depending on what the market is doing, so they are a riskier choice than a fixed rate. They’re typically best for borrowers who aim to pay off their debt fast.
Want to see how much you could save with a lower interest rate? Use our student loan refinancing calculator to find out.
2. Changing the length your repayment period can help, too
Besides snagging a lower interest rate, refinancing also lets you change your repayment terms. So once you’ve chosen a refinancing offer, you can select a repayment period between five and 20 years. You can choose a shorter or longer term depending on your goals.
If you choose a shorter term, you’ll get out of debt faster and pay less in interest overall — but your monthly payments could increase. On the other hand, a longer term could lower your monthly payments and give you back more spending money from month to month. But it also means you’ll stay in debt longer, possibly paying more in interest over the life of your loan.
Ultimately, refinancing student loans is a strategic move for many pharmacists. Because you have high income — and ideally, a decent credit score — you could qualify for competitive loan terms. With your high student debt, you could see major savings from restructuring your loans with a new lender.
3. Consider an income-driven repayment plan
If you’re struggling to make monthly payments on your student loans, an income-driven repayment plan could help. Income-driven repayment plans adjust your monthly payments based on your discretionary income.
There are four main income-driven plans, all of which apply exclusively to federal student loans:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
Though they all work a little differently, all of these plans cap your payments at 10, 15, or 20 percent of your monthly income. Because they lower your bills, they also extend your payment terms to 20 or 25 years. If you still have a balance after all those years, the government may forgive some or all of your remaining debt.
Note that any forgiven balance will be considered taxable income. You could still have a final tax bill to settle after your term is up, but you won’t have to make any more payments toward your student loans.
Also be aware that your monthly bills could increase if your salary goes up. On the PAYE and IBR plans, your payments could go back to what they were on the standard 10-year plan. And on REPAYE and ICR, your payments could actually exceed what you’d pay on the standard plan.
These income-driven plans reduce your payments when your income is low relative to your debt. But they may cease to be helpful if and when you start making more money.
4. Negotiate a signing bonus and put it toward your loans
Not only do pharmacy jobs command a high salary, but many also come with a substantial signing bonus.
Many companies woo new pharmacists with $10,000 signing bonuses and gifts in the mail, according to ABC News. The U.S. Public Health Service Commissioned Corps also offers a $30,000 signing bonus, as well as an annual $15,000 retention bonus. But to qualify, you must commit to four years of active duty.
If you’re on the job hunt, look for positions with generous signing bonuses. If you get an offer, try negotiating the terms for more money. Most hiring managers expect some level of negotiation before finalizing a contract.
If you put that bonus toward your student loans, you can pay off a significant chunk all at once.
5. Be cautious about student loan deferment and forbearance
By this point, you’re well aware of the danger of student loan interest. The longer you have debt, the more you’ll pay in interest. That’s why you should be cautious about putting your student loans into deferment or forbearance.
Deferment and forbearance are short-term solutions for people who go back to school or run into financial hardship. Both options pause payments on your student loans for a set period of time. But interest may continue to accrue, depending on your situation and loan type.
Deferment and forbearance can be a useful, temporary solution if you can’t make your monthly payments. However, the danger with both options is that your student debt could balloon out of control. Because you’re not chipping away at the principal, the amount will just continue to grow.
Depending on your situation, most federal student loans are eligible for deferment and forbearance. The rules around deferring private student loans are up to the individual lender — though many lenders offer some form of deferment for borrowers.
For many borrowers, deferment and forbearance are the last resort. Both options provide immediate relief, but they have long-term financial consequences.
6. Prepay your student loans when you can
If you score a six-figure income straight out of grad school, it’s easy to ramp up your spending. You might move to a bigger apartment or eat out at restaurants every night. While you deserve to celebrate after all your hard work, you should also be aware of your cash flow.
Instead of succumbing to “lifestyle inflation,” try to keep your expenses low. That way, you can throw extra payments at your student loans. You might make an occasional extra payment or even set up regular bi-weekly payments.
Beyond tracking your spending, calculate what would happen if you ramped up your student loan payments. When you have an idea of how much you could save by paying your loans off early, you might be motivated to take a more aggressive stance.
Let’s revisit that example of $108,000 in loans at a 6.80% interest rate. You could pay $1,243 a month for 10 years. But if you paid an extra $100 a month, you’d be out of debt one year earlier and save over $4,500 in interest.
If you could swing an extra $200 a month, you’d be free in eight years with an interest savings of $8,200. When it comes to tackling student loans, even a small extra payment goes a long way.
Once you’re working, it’s easy to set your loan payments on autopilot and forget about them. But if you make paying off your debt a priority, you could be free of your loan payments years ahead of schedule.
7. Learn about your options for loan forgiveness and assistance
Pharmacists have dozens of options for student loan forgiveness and assistance, as well. The Public Service Loan Forgiveness (PSLF) program, for instance, forgives federal loans after 10 years of service in a qualifying organization. The National Institute of Health (NIH) offers $35,000 of loan repayment assistance each year to pharmacists conducting qualifying research.
Beyond these national programs, many states offer loan repayment assistance to healthcare professionals. Most of these programs require two or more years of service in a high-needs area.
Depending on the nature and location of your work, you could qualify for major assistance toward your student loans. Check out our full list of student loan forgiveness programs for pharmacists to learn more.
Find the strategy that works best for you
Earning your Doctor of Pharmacy is a great achievement. However, the journey to get this degree often comes with a huge price tag.
Once you graduate, you need to figure out how to approach your student debt. The best strategy depends on factors like your income, debt-to-income ratio, credit score, and professional goals.
Before acting, make sure to explore your options and identify your needs. With this knowledge, you can find the right prescription to cure your student loan debt once and for all.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate 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 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
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.
4 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.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). 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 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|