How to Refinance Medical Student Loans
Student loan refinancing can be a great way to lift some of the weight that presses on your shoulders. Many medical students are stressed due to the amount of debt they’re in, but if they choose to refinance student loans, they can escape their past problems quickly. If you are curious about what student loan refinancing involves, this post will tell you every important detail, for international students and not only.
What Is Student Loan Refinancing?
Refinancing medical student loans is a useful way of getting rid of your existing debt by taking a new loan. In general, the new loan is taken from a private lender. So, since you get rid of the debt you had previously, you don’t owe any money to the past lender. You only have to take care of the new loan until it’s paid off.
Why Refinance Your Medical Debt?
Before you even think of student loan refinancing, you need to know what’s in for you. You have to count the benefits and figure out whether it’s worth it in your case. Let’s take a look at some of the advantages that come with refinancing medical student loans:
Benefits of Refinancing Student Loans
It Decreases Your Monthly Payments
Isn’t it annoying when you have to give a good amount of money away every month? You may get to the point where you’re even afraid to reach that time when you will have to make payments. A good example is represented by Indian student loans, which are very expensive and have quite a high interest rate.
Luckily, if you use student loan refinancing, you can escape this vicious circle. Since you repay your existing loan and take out a new one from another lender, you can reduce the payments as you get rid of the bigger debt and reduce your interest rate too.
However, this only applies as long as you don’t take out a loan that has a longer payoff time. If you do it, you may have to deal with more costs for the loan as the interest will have to be paid for a longer period.
It Can Reduce Your Interest
Sometimes, interest rates are too high, so having them reduced can be a blessing. Through refinancing, this is achievable.
Your Co-signer Will No Longer Have to Be Responsible
Refinancing will make you able to handle the loan on your own, which means that there’s really no need for a co-signer anymore. And let’s be fair, the co-signer is certainly not on terms with having to pay for you, even if they agreed to do it. So, you will free the co-signer from their responsibilities and deal with the debt yourself.
You Get a New Lender
If you’re not in a good relationship with your lender, refinancing will let you switch to a new one and thus benefit from better customer service.
Refinance Medical Student Loans
As a medical student, there are specific options you will have access to through refinancing. For instance, depending on your possibilities or wishes, you can refinance during residency or after residency. It’s important to know what both of these options include before you jump into them, though.
Refinancing During Residency
Refinancing during residency means that you can refinance medical student loans while you’re still a resident. It’s a great option as it helps you get rid of your debt much faster as long as you have the financial possibility to do so.
Many residents who chose to refinance made larger payments and were able to accumulate wealth quicker. So, a lot of them didn’t regret refinancing.
But it’s always important to look at the situation from all points of view and not refinance unless you’re sure about it. With some loans, such as private student loans, refinancing during residency is safe, mostly because these loans are not eligible for IDR and forgiveness plans.
However, if you have a federal student loan, refinancing should be thought about carefully. You shouldn’t refinance if you plan on going for PSLF later.
Refinancing After Residency
If you want to, you can also refinance after residency. By doing that, you will pretty much choose to refinance once your income gets much higher. Moreover, your interest rate will get lower, which will ease your payments.
How to Refinance Medical School Loans?
Refinancing a medical school loan is not that difficult, but you need to know if it’s the path you should choose. As mentioned earlier, it’s not something everyone should consider. Let’s see how you can refinance your medical student loan.
Decide If Refinancing Is Right for You
Refinancing is not an easy decision, especially if you want to be sure you’re not making a mistake. But to decide if it’s right for you, what you will have to do is go around looking for loan options, and comparing them to see what the more convenient option is.
Also, think carefully about how you see your life after refinancing. Will it be better, or with barely any noticeable difference? Refinancing should lower the amount of money you have to deal with when paying off your debt, and if that doesn’t happen, then this option may not be what you’re looking for.
Find Out If You Qualify
You’re probably already aware that not all lenders have the same rules and requirements when it comes to offering you a refinance loan. So, you will have to find out what eligibility criteria you have to meet before you eventually get accepted for a new loan.
In general, you can check for information online, where you can apply for the loan as well. More often than not, the lender will check your credit situation before figuring out if you’re to be trusted or not. Your credit score matters in your qualification process, and so does your existing debt and income. Therefore, check if you have a good income that will allow you to have enough cash for the loan and for yourself, and whether your credit score is high enough to qualify or not.
Medical Student Loan FAQ
When you visit Stilt, it’s easy to see that we always try to offer useful information and advice regarding loans. We also want to make sure you have answers to your questions. That being said, here are some of the most frequent questions that people ask when they want to refinance medical student loans:
How Should I Pay Off Medical School Debt?
Medical school debt can be paid through different methods. For example, you can switch to an income-driven repayment, which is meant for residents who are unable to pay the whole amount. You can find plans that include this option and you will pay a percentage of your income with them.
Another option is seeking loan forgiveness. Some medical schools have a loan forgiveness program. With these, you can work in a public sector for a while, especially if you have future plans for your career that match what you’re doing during the program. In some cases, you may be able to mix your loan forgiveness with a repayment strategy, so the forgiven amount increases.
You can also choose to keep living like a resident or make more payments during your residency period to pay off your debt.
Is Doctor Loan Forgiveness Right for Me?
Loan forgiveness is a good idea as long as your activities align with your career goals. Simply using forgiveness plans in excess to get the benefits is not recommended. You would have to make career plans based on forgiveness plans, which is not ideal for anyone. Think whether this is what you want to do before you go this path.
How Can I Get Medical School Loan Forgiveness?
You will have to look for forgiveness plans available where you live. To qualify, you should have a direct federal loan, and if it isn’t direct, you should be able to convert it in some cases. Also, you will have to show proof of your financial struggle, which should be less than what you will earn during the forgiveness program option.
How to Refinance Medical Student Loans with Stilt
Refinancing medical student loans with Stilt is not difficult. On the contrary, it’s an easy and quick process that will give you access to the new loan you so desperately need.
First of all, you will have to submit your loan application online, to which we will reply within 24 hours after you apply. In some cases, we may reach out when certain information is missing or needed to get to a decision. The next step will require you to sign a promissory note, and once you provide a signature, your loan will be deposited within 2-3 business days.
To be eligible to refinance medical student loans, you will have to:
- Have a good financial behavior
- Have a good credit score
- Be employed
- Have no bankruptcies, collections or defaults
When you want to refinance medical student loans, you must know how it’s done, and whether you should take this course of action or not. Hopefully, this article was enough to enlighten you and give you the answer. If you end up refinancing, your life as a medical student will be easier, as long as the new loan requires lower monthly payments.