Should Medical Education Loans Refinance?



When you should and should not refinance your medical student loans. (iStock)

Refinancing student loans involves exchanging your current loan for a new one with a lower interest rate.

These private loans, offered by lenders, banks and credit unions, can be an important asset for medical graduates who have average over $ 215,000 in student debt. Contact a trustworthy to compare student loan refinancing options.

While refinancing can be a useful strategy for those looking to pay off a medical school debt, it isn’t necessarily the right choice for everyone.

To decide whether refinancing is appropriate, you need to consider the type of loans you have, evaluate repayment options, and compare rates.


Understanding Your Medical Education Loans

There are two types of loans for medical schools: federal and private.

Medical students can have access to several options for federal financial assistance, including student loans for medical professionals, direct unsubsidized loans, and PLUS loans.

Although an unfavorable credit history can affect your access to a PLUS loan, federal student loan rates are usually fixed and independent of your credit rating.

Lenders offer private medical schools with rates based on your credit rating, loan term, and whether you choose a variable or fixed rate.

Some private lenders offer specialized plans for medical students to adjust payments during their stay.

Repayment options

Federal student loan payments tend to be more flexible, with features such as grace periods and grace periods.

They also offer the following benefits:

  • Income-driven repayment plan: You can lower your federal loan payments by lengthening the maturity based on your income.
  • Student Loan Forgiveness: Under the Public Service Loan Forgiveness (PSLF) Program, student debt is eligible for forgiveness after 120 eligible monthly payments for employment with a nonprofit or government organization. There are several additional federal payment programs and fellowships for doctors.

Federal and private borrowers can also save money by refinancing medical school loans.

Use an online tool like Ability to compare the refinancing rates of student loans from multiple lenders at the same time without affecting your credit rating.

When is refinancing medical education loans a good idea?

If the situations described below are similar to yours, you might want to consider refinancing:

1. You have high interest private loans: If you have a private education loan, refinancing can lead to significant savings. Use an online tool like The ability to view a rate table that compares rates from multiple lenders at the same time

2. You are not eligible for loan forgiveness programs: If you are not eligible for government loan forgiveness programs, perhaps working for a private health clinic rather than a non-profit organization, refinancing may be your best option.

3. You have a stable income and good creditworthiness: Swapping a federal loan for a private loan means the loss of benefits such as income-related repayment and abstinence. Make sure you are financially stable before taking this step. Likewise, remember that refinancing rates are based on credit.


When refinancing is not recommended (and alternatives should be considered)

While refinancing is a good solution in the above cases, refinancing doesn’t make sense in the following scenarios:

  1. Do you have federal loans with low interest rates: With the exception of PLUS loans, federal student loans almost always have the lowest rates.
  2. You have the right to be forgiven: If your federal loans can be forgiven, refinancing may not be worth it.
  3. Student loan payments are suspended: Under the CARES Act, federal student loan payments are frozen until September 31, 2021 at a 0% interest rate.

In addition to refinancing medical education loans, there are several alternatives you should consider:

  • Standard payment plan: For federal loans, it is best to stick to the standard 10-year maturity.
  • Income related repayment: If you’re struggling to handle payouts, income-driven repayment is a viable option. Just keep in mind that extending the loan term will increase interest.
  • Strengthening: Federal Student Loan Consolidation gives you one fixed interest rate based on the weighted average of all your rates. In the case of private loans, consolidation is based on your credit and loan conditions, not your current rates.


Wondering how much you can save by consolidating or refinancing your student loans?

Use refinancing student loan calculator to understand what your new monthly payments might be.

Refinance your medical education loan when it makes financial sense

Whether you are an intern, resident, or student, it is important to take a step back to evaluate your student loan repayment plan.

Depending on the type of loans you have and your professional plans, refinancing may make sense.

Weigh the pros and cons of refinancing medical school loans and carefully consider the benefits of federal student loans before refinancing them to private loans.

If you’re wondering how much you can save by refinancing, use an online tool like The ability to get prequalified student loan refinancing rates without compromising your credit rating

Have a financial question but don’t know who to contact? Write to the Safe Money Specialist at and your question can be answered by Credible in our Money Expert column.


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