Refinancing your dental school loan could save you money by lowering your interest rate, and help you pay off your debt faster. You can do it during residency or wait until full-time employment. We’ve evaluated the best refinancing options based on rates, terms, process, fees, and overall quality.
First Tech Federal Credit Union provides competitive rates, but you'll require a membership to receive those benefits. To become a member, you'll have to meet some strict requirements.
UNDERGRADUATE LOANS: Fixed rates from 3.47% to 12.55% annual percentage rate ("APR") (with autopay), variable rates from 2.26% to 13.54 % APR (with autopay). GRADUATE LOANS: Fixed rates from 4.60% to 12.55% APR (with autopay), variable rates from 2.96% to 13.54% APR (with autopay). PARENT LOANS: Fixed rates from 4.48% to 13.05% APR (with autopay), variable rates from 2.06% to 14.04% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 06/08/2022.
Should you refinance dental school loans?
Dental school is expensive, and it can cost more than $151,508Â to $268,348 over four years. That’s a lot of money, and it doesn’t include the interest that accrues while you’re in school or even after you graduate. If you want to pay off your dental school loans sooner, consider refinancing them at a lower rate.
Here are some reasons why you might want to refinance your dental school loans:
Lower your monthly payments: Refinancing could lower your monthly payments if your lender has a lower rate to offer than your current loan.
Consolidate multiple loans into one loan with one lender: Consolidation makes it easier for you to keep track of your payments and manage your finances.
Lower cost of theloan: When you refinance your student loan at a lower rate, you’ll pay less over the life of the loan.
Keep to note, when you consolidate, you will do it through the Department of Education and maintain your federal benefits. When you refinance, you’ll do it through a private lender and lose federal benefits, but you’ll save money if you have a lower interest rate.
When to refinance dental school loans?
You should consider refinancing if you can get a lower rate on your loan and need to reduce monthly payments. This is always true for private student loans, but for federal loans, you’ll have to weigh the pros and cons of federal benefits with your current financial situation.
How to refinance dental school loans?
To refinance your dental school loan, you need to do the following:
Research lenders:Â Many different lenders offer student loan refinancing. Compare them based on fees, interest rates, and customer service ratings before deciding on one.
Get multiple rate estimates: The next step is to get a sense of how much you could potentially save by refinancing your loan. You’ll need to request information from several lenders and compare their offers.
Choose a lender and loan terms: Once you’ve identified the best interest rate, choose the lender you want to work with and get their loan terms in writing before proceeding further with the application process.
How much could you save when refinancing dental school loans?
You could save thousands of dollars when refinancing a dental school loan considering the large loan amount. Here is an example:
Loan amount: $250,000
Months remaining: 120
Interest rate: 5%
Monthly payment: $2,652
Lifetime costs: $318,197
Based on the above scenario, if you refinance at a 3% rate, your monthly payments will drop to $2,414 and your lifetime cost will drop to $289,682. In this case, you’ll save $238 a month and roughly $28,515 over the life of the loan.
Pros and cons of refinancing dental school loan
There are various pros and cons of refinancing.
Pros
Lower your interest rate: When you refinance your dental school loan, you can get a lower interest rate on the new loan. This can help you save money over time, especially if you have a lot of debt or have a high-interest rate on your current loan.
Consolidate multiple loans into one: If you’ve taken out numerous private loans for school, you may be able to consolidate those loans into one, so you have just one monthly payment. This will make it easier to manage finances.
Alter your repayment term: If you have the option, you can change your repayment term from 5 to 10 years or vice versa. In addition, you can extend your repayment term and lower your monthly payments.
Cons
Loss of federal protections: You’ll lose federal protections when refinancing, such as income-based repayment plans, Public Service Loan Forgiveness, and flexible repayment options. These benefits can be critical if you cannot work in a high-paying job or pay back your loan debt due to unforeseen circumstances.
Will refinancing hurt your credit score?
Refinancing your student loan will temporarily hurt your credit score from the hard credit pull. However, it can be beneficial in the long run for your credit score as you continue to make payments on time.
How to choose the best dental school loan refinancing option
Choosing the best dental school loan refinancing option depends on your current financial situation, goals, and student loan type. Here are helpful tips:
Shop around for a good interest rate: You might find that some lenders offer better rates than others, so it’s worth taking the time to compare them all. You’ll want to look at the loan fees and APR, and not just the interest rate alone. Some lenders will have a lower rate but their overall costs of originating the loan come make it more costly.
Repayment terms and conditions: Lenders usually have a standard set of requirements that they offer all applicants, but if you have any specific requests, you’ll have to speak with them, so they can give you advice based on what’s available for your situation.
Look at customer service: You’ll likely have questions about how much you owe and when payments come due during your education. A lender with good customer service can give you less headaches.
