Student Loan Refinancing For Doctors
Below you will find helpful programs to Refinance Student Loans. I provide a brief description of each and the particular benefit that they may provide to you. I’ve separated them into loans that are specifically helpful for those in residency (affordable monthly payments during residency) and those that want to refinance after residency (usually provide lower rates).
I have a few comments I’d like you to read BEFORE you refinance, though. This is to make sure that refinancing is right for you, first.
Student Loan Refinancing IN residency
Please do the math for your specific situation to see if you get a better deal through the subsidy provided by REPAYE before proceeding with the following refinance options as a resident!
One other comment: I recommend that if you are a resident (and have decided not to do PSLF) to apply to all of the programs below. The following rates are advertised rates, which doesn’t necessarily correlate to the rate you will actually get. The following is in order of bonus money back to you.
Commonbond $550 back to you
Rates: They refinance you at your future earnings potential, which will provide you the same rate you’d get as an attending physician. That said, Commonbond only allows residents to refinance during your last 12 months of training if you have a contract in hand.
Pro’s: Possibly the lowest rates because they refinance at your attending level pay. Lowest monthly payment (loans are deferred for last 12 months of residency, but you can pay on them if you want with no fees being applied). Great protection for your loans (strong language on discharge of loans with death or disability). Allows you to consolidate with your spouse’s loans.
Con’s: Only available in last 12 months of training. Interest accrues during that last year.
SoFi: 0.125% Interest Rate Reduction
*While not a cash back offer, this deal is actually pretty sweet. Let’s look at the average medical student loan debt to see why. If you have $200,000 in student loans each year, and your rate is reduced by 0.25% that saves you $250 per year (that’s $750 over three years). Have $300,000? Make that $375 per year.
Pro’s: SoFi is one of the most widely used refinancing programs. They advertise some the lowest rates of the four resident refinance programs (that said, I encourage you to apply and see actual rates for you). They will also refinance through fellowship (up to 54 total months per website). Low $100 monthly payment while your debt grows at a substantially lower rate than it was before. Also, interest will not compound while in residency (it will capitalize at the end of residency).
Con’s: You must be within four years (54 months total for refinance) of becoming an attending physician (may not be beneficial for longer training programs). The discharge of loans upon death and disability language online is not as strong as some others.
Laurel Road: $400 back to you
Pro’s: Debt forgiven upon death. Also some or all forgiven if permanently disabled. You pay low $100 monthly payment during residency. Remains in effect throughout residency regardless of length of training. Can continue these monthly payments for six months after residency (though, we recommend you refinance again at a lower rate and start paying!). Similar to other programs interest does not capitalize while a resident. This is the only resident program that is offered via a bank, which means it is backed by the FDIC. Also, includes fellowship. May be able to apply for lower rate if contract in hand.
Con’s: Slightly higher rates. Co-signer (if one is placed) is not always released. Do not offer a 5 year rate; starts at 7 years. Max loan amount of $500,000.
Splash Financial Bonus varies ($300 for loans >$30,000) see below:
Pro’s: Lowest monthly payment of any resident refinancing programs (only $1 per month). No monthly capitalization during training. Longest low payment period during training; for up to 84 months (7 years) of training. Also, extends to fellowship. Loans discharged on death in resident product (but not attending product below).
Con’s: Higher rates, but everyone gets the same (other sites can quote lower advertised rates because their rates vary unlike Splash where everyone’s rates are the same). Max loan amount of $350,000.
Student Loan Refinancing AFTER residency
Fortunately, after residency the decision gets a whole lot easier. Look for the policy with the features you need for the lowest interest rate. Do this by applying to multiple lenders and getting rates quoted to you based on your specific circumstances. If the rates are the same for the same term and type (fixed versus variable), choose the one with the best bonus back to you.
A few more comments. A variable rate is better than a fixed rate. Really a fixed rate is a variable rate plus an insurance policy by the refinance company that rates won’t change. Rates have to change a lot and fast for you to lose money with a variable rate. Variable rates are usually lower and are typically worth the (very small) risk.
Here are lenders in order of bonuses back to you with my referral links for various refinancing programs. Again, these are advertised rates and you should apply to multiple companies to see the real rate for you.
SoFi (0.125% interest rate reduction)
*While not a cash back offer, this deal is actually pretty sweet. Let’s look at the average medical student loan debt to see why. If you have $200,000 in student loans each year, and your rate is reduced by 0.125% that saves you $250 per year (that’s $750 over three years). Have $300,000? Make that $375 per year.
*See comments above in resident refinance section
*One of the biggest players in this market
*First to refinance federal and private
*First to receive AAA rating from major rating agency)
*Cannot consolidate loans with spouses
Commonbond ($550 bonus for you)
Rates (Hybrid between fixed and variable, only possible at 10 year loan, hence higher rate than fixed rate above, which comes with shorter terms if desired)
*This is who I refinanced through and have had a great experience.
*Can consolidate your spouses loans (many do not offer this)
*Can go back into forbearance (12 months in a row, 24 max) for economic hardships; may also defer for 34 months (interest accruing at end of time) for going back into higher education
*Refinance for a cause: every loan that is refinance pays for one year of education for a child in Ghana. Have financed over 5,000 children’s educations already.
*Discharged upon death or permanent disability
Laurel Road ($400 bonus for you):
*Discharged upon death or permanent disability
*No unemployment protection
*See comments above in resident refinance section
Earnest ($300 bonus for you)
*Discharged loans in case of death or permanent disability
*Cannot consolidate with spouse’s loans
*Monthly payments to fit your budget
*Can lend in all states except for AL, DE, KY, NV and RI
Splash Financial ($300-see below):
Bonus Schedule: Must have at least $30,000 in loans to refinance with Splash.
*Terms of 5, 7, 15, 20 years
*Minimum FICO of 700 for solo applicants (670 with co-signer; co-signer release after 12-months)
*maxmium loan of $150,000 initially (should be increasing to $300,000 soon)
*Not discharged on death or permanent disability
As time goes by I’ll update this with more lenders who you can use to refinance your student loans! The most important thing is to make a plan, because “When you fail to plan, you plan to fail!” (Benjamin Franklin)
TPP
