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Should you Refinance your Medical School Student Loans?


I get a lot of questions about refinancing student loans from residents, interns and attendings during my speaking engagements.

Disclosure

First of all, you need to be very careful about refinancing your federal loans. You will lose important benefits and it cannot be undone. A medical doctor who refinances federal student loans does not foresee needing any of the benefits the Department of Education offers like Income-Driven Repayment Plans, Loan Forgiveness, Forbearance and or Deferment. They also tend to have high-income relative to debt, and excellent credit when applying for the loan.

What is Refinancing

Refinancing is done with a private lender where they pay-off your loan or multiple loans and replaces them with a new one. You typically want to refinance to lower your interest rate. The goal is to pay less interest during the life of the loan. If you have 8.50% and can get a 5% rate with a private lender the difference is your savings. Depending on your balance the savings can really add up.

Advantages

• Potential lower monthly payments

• Lower interest rate

• Simplify payments

• Private lender can refinance federal loans and private loans

Disadvantages

• If refinancing federal loans, you will lose benefits

• It cannot be undone

If you have private student loans with high-interest rates you should look into refinancing if you can get lower rates. Keep in mind any benefits your current financial institution is offering.

Resident / Fellow

If you’re a resident or fellow there are a couple of firms that refinance loans to this market. Unfortunately, there is only one that will refinance to residents of Puerto Rico and that is Darien Rowayton Bank. They have a division called laurel road which handles student loan refinancing. Applying is pretty straight forward. You will need your residency or fellowship contract, ID, and pay stub among other things. While you’re in the program DRB will require you to make monthly payments of $100.

To refinance and apply with DRB click here.

To calculate your potential savings, use DRB’s calculator here.

Attending

Attending’s have the same problem residents have in that not a lot of financial institutions will refinance their loans if they’re residents of Puerto Rico. Fortunately, DRB will refinance your loans assuming you qualify. You also have another option and that is LendKey. LendKey is a platform where you submit an application to a network of credit unions and community banks. Hopefully, you can find an institution who will refinance your loans at an attractive interest rate.


To refinance and apply with LendKey click here.

Where to refinance.

Resident / Fellow

DRB

Attending

LendKey

I wrote a short guide for medical doctors on student loans, and it’s free. Click here to get your copy.

Simplievest is a financial planning and investment management firm working exclusively with medical doctors. We take care of your finances so you can take care of your patients. Check out all of our services here!

If you need help with your student loans use my online calendar to schedule a phone meeting to discuss your current situation.