For most future doctors, taking on debt is a necessary part of the career path. Between 76% and 89% of medical students graduate with debt, according to the Education Data Initiative. Dentists and Veterinarians experience debt at similar levels.
Whether a physician, dentist or veterinarian, undergraduate and graduate education is expensive. According to the EDI, the average medical student graduates with $241,600 in total student loan debt.
After graduating with hundreds of thousands of dollars in debt, it takes time to overcome this financial burden. If you are interested in reducing your interest rate or your monthly payment, student loan refinancing might be a good option for you.
Student loan refinancing means a private lender pays off your existing loan, then gives you a new loan with new terms. This can provide an individual with a longer repayment term — with lower monthly payments — or it can mean the individual pays less over time from a lower interest rate (or both!).
Student loan refinancing can be beneficial to many but should be avoided in some cases. These are reasons to avoid refinancing your student loans:
Refinancing your student loans can be incredibly beneficial. Every situation is different but here are a few scenarios where refinancing can be beneficial:
Different lenders use different metrics to determine your eligibility and interest rate. Lenders may consider:
The most significant way refinancing student loans could help you improve your credit score is if it helps you make on-time payments.
The most heavily weighted factor used to determine your FICO credit score is credit history, which includes your on-time payments. If refinancing can lower your monthly bill and make it easier for you to make on-time payments, it could improve your credit score.
Refinancing medical, dental or veterinary school student loans should not have a significant effect on your credit score, but scenarios that may have a negative impact include:
Federal student loans are currently in a holding pattern due to the ongoing student loan forbearance. With no need for payments during this time and the chance of partial forgiveness in the future, borrowers should carefully weigh their options before refinancing out of the federal system.
Once payments resume and any student loan policy decisions are announced, borrowers will have a clearer understanding of how to attack their student loans. For some, refinancing could be a great option to consider.
Private student loans are still requiring monthly payments and are ineligible for federal forgiveness, so if you would benefit from refinancing, there is no need to wait if you can get a better deal.
Loan terms can make a big difference when refinancing your student loans. If you choose a shorter loan term, your interest rate will likely be lower, but your monthly payment will be higher.
For example, if you are a practicing physician, dentist or veterinarian refinancing $100,000 of student loan debt with Panacea Financial, you can choose a 5, 7, 10 or 15 year term. If you choose a 5-year term, your interest rate would be 4.75% APY, and your monthly payment would be $1,875.69. If you choose a 15-year term, your interest rate would be 5.50% APY, and your monthly payment would be $817.08.*
To see how loan term will affect your loan rate and monthly payment based on your loan balance, see our Student Loan Refinance Calculator.
*Please note these rates and payment values are accurate at the time of writing but may change. To see our most current rates, please visit our Student Loan Refinance page.
Once you decide refinancing student loans would help your financial circumstances, it is time to take the steps necessary to complete the process.
Panacea Financial has created a student loan refinance product that is designed for doctors. Doctors typically have much higher debt and a different career path and financial journey than those that traditional refinance lenders cater to.
Features of Panacea’s Student Loan Refinancing include:
Take control of your finances today by refinancing your student loans. Start this step on your way to great financial freedom by applying for student loan refinancing here.
*Learn more about $100 monthly payments for doctors in training.
Panacea Financial, a division of Primis. Member FDIC.