FROM OUR PARTNERS

Best Medical School Loan Refinance Options of 2022

Brenda Williams

Physicians can refinance medical school loans during and after residency. We’ve evaluated the best refinancing options based on rates, terms, process, fees, and overall quality.

No application, origination, or prepayment fees

640

Min. Credit Score

2.49% - 11.72%

Variable APR

2.59% - 8.49%

Fixed APR

Overview

Splash Financial partners with various banks and lenders to offer a competitive interest rate.

What we like

  • Quick online application process
  • Competitive interest rates
  • Easily compare lenders
  • Personalized customer support

What we don't

  • Terms and conditions differ by lenders
  • No options for deferment

Easy online application process

660

Min. Credit Score

4.13% - 7.39%

Variable APR

2.99% - 9.93%

Fixed APR

Overview

LendKey streamlined the digital application process to save you time and effort by comparing competitive rates from a smaller bank or credit union.

What we like

  • Competitive rates from smaller institutions
  • Streamlined application and repayment process
  • Longer forbearance periods
  • Cosigners are not required

What we don't

  • No full in-school deferment
  • Only a credit-based application available

Competitve rates with credit union membership

660

Min. Credit Score

N/A

Variable APR

2.80% - 7.15%

Fixed APR

Overview

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.

What we like

  • Low refinancing rates
  • Flexible loan terms
  • Payment protection with DebtSafe
  • No application and orgination fees

What we don't

  • No temporary forberance option
  • No co-signer release
  • Parent PLUS loans can't be refinanced
  • Credit union membership required

Temporary forbearance available

650

Min. Credit Score

2.06% - 14.04%

Variable APR

3.47% - 13.05%

Fixed APR

Overview

SoFi provides an easy online application process, so you can receive a rate estimate in minutes without a hard credit check.

What we like

  • No prepayment fees, no origination fees, no late fees
  • Flexible repayment options
  • Exclusive membership perks
  • Borrow up to the total cost of attendance
  • Unemployment protection

What we don't

  • No borrowing below $5,000
  • Application process can take 4 - 6 weeks

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 medical school loans?

There are several reasons why you might want to consider refinancing your medical school student loans:

  • Lower interest rate: If you have good credit, you could qualify for a lower interest rate than what you’re currently paying on your loans. Lenders may offer lower rates because of the income potential from doctors who are likely to be in high-paying specialties like dermatology or orthopedic surgery.
  • Extended term and payment period: Most consolidations extend the term of the loan and payment period so that fewer payments are due each month, making them easier to manage. This can be especially helpful if you’re having trouble making your monthly payments now.
  • Save money on interest payments over time: Refinancing can help reduce your monthly payment and eliminate any high-interest private loans. You’ll pay less interest over time if you do lock down a lower rate.

How much could you save when refinancing medical school loans?

Medical school loans can be a heavy burden for medical students. The average medical student graduates with $241,600 of debt and interest rates are often higher than the prime rate.

If you’re planning to refinance, here’s an example of how much you could save:

  • Loan amount: $100,000
  • Months remaining: 120
  • Interest rate: 5%
  • Monthly payment: $1,012
  • Lifetime costs: $121,494

Based on the above scenario, if you refinance at a 3% rate, your monthly payments will drop to $966 and your lifetime cost will drop to $115,873.

What are the requirements to refinance a medical school loan?

Before you refinance, there are several requirements you should consider first:

  • Credit score: A strong credit score makes it easier to qualify for lower interest rates and better repayment terms. If your score is low, consider improving it by paying bills on time, keeping balances low on credit cards, and paying down any debts.
  • Income: You’ll need to show that you have enough income to repay the loan without taking on additional debt or having difficulty meeting monthly expenses such as rent or food bills.

Is refinancing student loans better than consolidation?

Refinancing student loans can help you save money on interest and make monthly payments more manageable. Just keep to note if you refinance a federal student loan, you will no longer qualify for existing or future benefits offered by the federal government. That’s where consolidating might be worth looking into.

Consolidation usually results in lower monthly payments because you combine multiple debts into one, but the tradeoff is that it extends the life of your debt. This could mean paying more in interest over time, especially if you’re consolidating at a higher interest rate than what you were paying on your original loans.

If you have federal student loans, consolidation can be an excellent way to simplify payments and keep certain options open.

You can keep Public Service Loan Forgiveness (PSLF) available through repayment plans that include income-driven repayment plans such as Pay As You Earn (PAYE). If you refinance into a fixed rate plan with no income-driven options, it will make PSLF unavailable for borrowers with higher incomes. Consolidation may be a better option because it makes the possibility of forgiveness available while saving money on interest.

To summarize, refinancing is your best option to save money while consolidation is your best option for maintaining federal loan benefits.

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 medical school loan refinancing option

Here are some factors to consider to help you choose the best medical school loan refinancing option:

  • APR and fees: The APR tells you how much interest you’ll pay over a year on your loan. A higher APR means higher monthly payments and more interest in total over time. Choose a low-APR option that provides the best value for your money.
  • Repayment terms: The repayment term is the time duration in which you have to pay back your loan. You need to carefully select the term which suits you the best as per your financial situation. The repayment term directly affects your monthly interest payments. The longer the repayment term, the smaller your monthly interest payment will be and vice-versa.
  • Customer service: It’s always good to see what other people think about a company before you decide to work with them. You can check out their social media pages, read testimonials from past clients, and read reviews on websites like Yelp and Trustpilot. This will give you an idea of whether they provide good customer service.