Refinancing loans for medical studentscan help borrowers save lots of cash.But is this the best decision for you?This depends on your individual situation and your financial goals.
Refinancing medical student loans is a smart idea, it’s a good idea
Here are a few scenarios in which it might be beneficial for you to refinance your Medical student loan or check out our Title Loans Online – BridgePayday:
- You can qualify for a better interest rate. If you are able to get lower rates of interest through refinancing, you could make savings of thousands of dollars during the duration that the loan.
- You’d like to repay your loan quicker. A refinancing loan with a shorter duration or securing a loan with a lower rate could assist you in eliminating the student loan debt faster.
- You’re looking to combine several student loans. Converting multiple loans into one will make it easier to track your payments.
Refinancing medical school loans isn’t a wise idea
A refinance of your medical student loan is not the best option If one of these scenarios applies to you:
- You can qualify under federal law for the forgiveness of student loans.If you are a recipient of federal student loans, you might be eligible to participate in a loan forgiveness program like the Public Service Loan Forgiveness (PSLF).To be eligible for the program, you need to make 120 qualifying payments while working full-time with a qualified government or non-profit company.If you decide to refinance your federal loans into a private loan, you won’t be eligible for the benefits offered by federal loans, including PSLF and the income-driven repayment plan.
- You’ve got bad credit.If you’re not able to establish stellar credit it’s likely that you’ll struggle to qualify for a better interest rate with no cosigner.
- There is no or little income.If you are applying for refinancing the lender will look at your earnings to determine whether you have the funds to pay back the loan.If you’re not doing work for your industry and you have a low or any income, it might hinder you from obtaining.
Refinancing the medical school loans
Check out your goals and decide if refinancing is a good idea for you.For instance, if you have both federal and private loans, it is best torefinance only the personal student loansexcept if you require federal loan benefits or protections.
If you’re looking to refinance the medical school loans you have, you must follow these steps:
- Verify your credit score.When you are applying to refinance, you should check your credit score to know what your standing is and determine if you are in compliance with the lender’s minimum credit score criteria.You can request free copies of your credit report by visiting AnnualCreditReport.com, or you can view your score by using a free credit-scoring app or website.
- Compare rates and shop around.To ensure you’re getting the best price for your particular situation, you should examine rates and terms with the most lenders you can.Check to see that any lenders have fees, for example, origination fees or late payment charges.
- Make a refinance request.After you’ve selected the lender you want to work with, fill out the loan application.It is likely that you will need to submit the following documents including W-2s, payslips, and tax returns.
- Take care of your loan.Continue to make payments on your initial loans until you receive the confirmation of having paid them.Once you’ve received confirmation, begin paying the refinance loan at the date you agreed to, in order to avoid penalties for late payments and damage to the credit score.To ensure that you make your payment in time, opt to make auto-pay if your lender has an autopay program.
What can you save through refinancing?
The amount you’ll be able to save by refinancing is contingent on many factors, such as the rate of interest you pay the new loan term as well as the amount you’re refinancing.
As an example, let’s say you have a 10-year $200,000 student loan that has an interest rate of 8% and a monthly payment of $2,427.If you refinance to an existing loan with the same terms but with at 4% interest then you’d reduce your monthly amount to $2,025.That would reduce your interest bill by $48,198 over the course that the loan.
How do you get the highest interest rate when refinancing your medical school loans?
To obtain the most favorable interest rate for refinancing medical school loans, you should begin by scouring the market by comparing loans with a minimum of three to five lenders.If you are able to manage the larger monthly payment for your loan, a shorter repayment period will probably be a better deal with lesser interest costs than a more lengthy time frame for repayment.
When you’re comparing lenders be sure to look for any discounts they might offer such as an autopay discount to set automatic payments or a loyalty reward for being a current customer.
When you seek to refinance, lenders typically will look at your credit past as well as your income.The better the credit scores, the greater chances you have of getting an interest rate that is lower.If you’re interested in working to improve your credit before applying to refinance your loan, you should focus on making sure you pay the bills in time, as well as paying off any other debts you have to boost your credit score.
If you’re earning a low income and/or bad credit, consider adding cosigners — people who are willing to pay for the loan if you don’t be able to repay it — to your application for a loan.If you have a cosigner with good income along with good credit could increase your chances of being approved and getting the lowest rate.
Financing medical school loan during vs. after residency
If you’re a resident then you might be thinking about whether it’s a good idea in refinancing your school’s loan in the near future or keep waiting until the time when your residency is over.The disadvantage of refinancing your loans right now is that you’re earning less than when you start your official medical career.In the end, you may have a hard time being able to repay as much of your loan as you’d like to.
However, some lenders provide specific kinds of loans or benefits specifically designed specifically forMedical students who are in the residency.For instance, Citizens Bank (a Credible partner) only requires that you make a monthly payment of $100 while finishing your fellowship or residency.
The advantage of refinancing following the residency period is it allows you time to improve your credit score and increase your income so that you can get the lowest interest rate that is available to the borrower when you decide to refinance.