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The high cost of medical school means most students have to take out loans to pay for college. You should always rely on federal student loans first because they have lower interest rates, more repayment options, and more loan forgiveness programs.
If you don’t qualify for federal student loans, the next step is to shop around for a private medical school loan to cover the rest of your expenses.
In this guide:
- Best medical school loans
- Federal loans for medical school
- Best private medical school loans
- How to get student loans for medical school
- Frequently asked questions about medical school loans
Best medical school loans
When you’re deciding between medical school loans, you should compare federal and private loans. But not all private lenders are created equally, so you have to compare their interest rates, repayment terms, and other characteristics carefully.
|Loan/Company||Rates (APR)||Total loan amount|
|Direct Unsubsidized Loan*||5.28%||Varies|
|Grad PLUS Loan*||6.28%||Varies|
|College Ave||1.99% – 11.46%||$1,000 – $150,000|
|Earnest||0.94% – 10.99%||$1,000 – 100% of school-certified cost of attendance|
|Ascent||1.62% – 14.52%1||$2,001 – $400,000|
|Sallie Mae||2.62% – 11.97%||$1,000 – 100% of school-certified cost of attendance|
*This is a federal student loan.
Federal loans for medical school
The two types of federal student loans you can use for medical school are Direct Unsubsidized Loans and Direct or Grad PLUS Loans. You can apply for federal medical school loans by completing the Free Application for Federal Student Aid (FAFSA) each year.
You should get the maximum amount of federal student aid first because:
- You can get loans at low fixed interest rates. Federal student loan rates are set each year, and your rate won’t change for the entire repayment term.
- You have a lot of repayment flexibility. You can change your payment plan as needed and choose an income-driven repayment plan or a plan where payments gradually increase over time. You can also put your loans into forbearance or deferment if you can’t afford to make payments.
- Loan forgiveness options are available. Loans can be forgiven for public service work, or if you’ve made 20 or 25 years of payments on an income-driven plan.
- Your credit doesn’t matter. For most federal loans—with the exception of PLUS Loans—your credit history doesn’t impact your eligibility.
Interest will continue to accrue while you’re enrolled and during any deferment periods for both Direct Unsubsidized and Direct PLUS loans. Both types of loans are eligible for the same repayment plans and loan forgiveness programs.
Direct Unsubsidized Loans
The annual limit for Direct Unsubsidized Loans is $20,500 a year, and the current interest rate is 6.54% for Direct Unsubsidized Loans. When you fill out the FAFSA, you will be able to max out your Direct Unsubsidized Loans first before turning to Direct PLUS loans.
Direct PLUS Loans
The annual limit for Direct PLUS or Grad PLUS loans is the cost of attendance, minus other financial aid including Direct Unsubsidized Loans. The interest rate is 7.54% for Grad PLUS loans.
Unless your medical school is inexpensive or you received a large scholarship, you will likely need to take out both Direct Unsubsidized Loans and Direct PLUS loans.
Best private medical school loans
We researched and reviewed medical school loans to help you find the best fit. Here are our picks for the best medical school loans from our partners.
College Ave is a private student lender offering a variety of student loan products. The company offers loans specifically for students who are attending medical school.
What stands out about College Ave’s medical school loan
Unlike other lenders, College Ave has an aggregate loan limit of $150,000. Many medical students may find it difficult to pay for all their expenses without hitting that limit early on.
However, College Ave does offer a generous cosigner release program and a wide range of repayment terms and in-school monthly payment plans. Their interest rates are also in line with other competitors.
You can also defer your loans for the entire time you’re in residency, so you don’t have to worry about making student loan payments while your income is at its lowest point.
Here are the basic features of a College Ave medical school loan:
- Fixed rates (APR): 3.99% – 11.46%
- Variable rates (APR): 1.99% – 10.45%
- Loan amounts: $1,000 – $150,000
- Repayment terms: 5, 8, 10, 15 or 20 years
- In-school repayment options: Deferment, $25 monthly payments, monthly interest payments, and full payments
- Grace period: 36 months.
- Cosigner release: After going through half of your repayment period
- Unique benefits: If you apply, you’ll get your decision within three minutes
Earnest is an online lender that offers private student loans and refinances existing student loans. The company also provides medical school loans that come with a wide range of repayment terms and in-school monthly repayment options.
What stands out about Earnest’s medical school loan
One of the most unique benefits is that borrowers can skip one payment each year for free. Borrowers can put the extra funds toward a short-term savings goal like a vacation or pay for a surprise expense.
Unlike other lenders on this list, Earnest does not offer cosigner release. If you have a medical school loan with a cosigner, you will have to refinance into a new loan to remove the cosigner.
Here are the basic features of an Earnest medical school loan:
- Fixed rates (APR): 3.24% – 10.99%
- Variable rates (APR): 0.94% – 9.89%
- Loan amounts: $1,000 – 100% of the school-certified cost of attendance
- Soft credit check: You can get a quote from Earnest with just a soft credit check
- Repayment terms: 5, 7, 10, 12, or 15 years
- In-school repayment options: Deferment, monthly interest payments, $25 monthly payments, and full payments
- Grace period: 9 months
- Cosigner release: Earnest does not offer cosigner release
- Unique benefits: You can skip one payment per year for free
Editorial Selection: Best for Cosigners
- Available to those studying half-time or more
- Cosigners can be released after you make 12 on-time payments
- 36-month grace period and 48-month deferment during your residency or fellowship
Sallie Mae offers medical school loans for those studying allopathic, general, osteopathic, podiatric, radiology, sports, and veterinary medicine. The interest rates are slightly higher than competitors, but there are some unique perks.
What stands out about Sallie Mae’s medical school loan
Cosigners can be released after just 12 months of payments, which is the lowest requirement among all lenders on this list.
There is also a 36-month grace period and a 12-month period where borrowers can make interest-only payments. These benefits provide more flexibility for borrowers.
Here are the basic features of a Sallie Mae medical school loan:
- Fixed rates (APR): 4.75% – 11.97% APR
- Variable rates (APR): 2.62% – 11.97% APR
- Loan amounts: $1,000 – 100% of the annual cost of attendance
- Repayment terms: Up to 20 years
- In-school repayment options: Deferred payments, interest-only payments, and $25 fixed monthly payments
- Grace period: 36 months
- Cosigner release: After 12 consecutive on-time payments. Payments must be the full principal and interest amount to qualify
- Unique benefits: Borrowers can qualify for 12 months of interest-only payments after the grace period is over, so borrowers have even more flexibility
Ascent is a student lender that offers a loan specifically for students pursuing a medical degree. Borrowers can apply with or without a cosigner, depending on whether or not they meet the credit score requirements.
What stands out about Ascent’s medical school loans
Ascent has a 36-month grace period, which is longer than most other lenders. This provides medical school students the chance to complete or almost complete residency before having to pay back their loans.
Here are the basic features of an Ascent medical school loan:
- Fixed rates (APR): 4.63% – 14.52%
- Variable rates (APR): 1.62% – 10.98%
- Loan amounts: $2,001 – $400,000
- Soft credit check: You can qualify and see your rate with a soft credit check
- Repayment terms: 7, 10, 12, 15, or 20 years
- In-school repayment options: Interest-only payments, $25 monthly payments, and deferred payments
- Grace period: 36 months
- Unique benefits: Borrowers who have a non-cosigned loan can get a 1% interest rate discount when they sign up for automatic payments
>> Read More: Other types of student loans
How to get student loans for medical school
- Fill out the FAFSA. Filling out the FAFSA will make you eligible for federal student loans. Make sure to complete the FAFSA by your school’s deadline or you won’t qualify for federal loans.
- Receive the award letter. The award letter you receive from your school will show how much federal student loan funding you qualify for. Unless you have an adverse event on your credit report and can’t add an endorser, you should qualify for both Direct Unsubsidized Loans and Grad PLUS loans.
- Find more funding. If you didn’t qualify for either kind of federal loan or you need more than you were awarded, you’ll have to take out private student loans. Use the list of lenders mentioned above to compare interest rates and repayment terms.
Frequently asked questions about medical school loans
1) Which medical school loan is the best?
You should max out federal student loans to pay for medical school because they often have lower interest rates, income-driven repayment plans, and loan forgiveness programs.
If you don’t qualify for federal student loans, you can take out a private student loan. Make sure to compare interest rates and terms before selecting a lender. The best one for you will depend on which lender offers the best rate and terms for your financial profile.
Our most recent evaluation of our partners led us to choose College Ave as the best private medical school loan.
>> Read More: Physician Assistant Student Loans
2) Do I need a cosigner for medical school loans?
Federal student loans generally do not require a cosigner. However, if you take out a Direct PLUS loan, your credit history will be checked for adverse actions like bankruptcy or default. If you have one of these events, you may have to add an endorser to the student loan, which is similar to a cosigner.
Eligibility for private medical school loans, on the other hand, is highly dependent on your credit score. If you haven’t had a chance to build a good credit score, you will likely need a cosigner. Some lenders, like Ascent, offer loans to medical students without cosigners.
3) Do medical school loans cover living expenses?
Most student loans, including federal and private loans, can be used to pay for living expenses. Try to limit your living expenses so you can minimize the amount you need to borrow. Every dollar you borrow is a dollar you’ll have to repay in the future.
4) When does repayment on medical school loans start?
Most student loan providers don’t require repayment until six months after you graduate or leave school. This time period is referred to as the grace period. Some lenders offer longer grace periods on medical school loans, like College Ave (36 months) or Earnest (nine months).
5) What should I consider when repaying medical school loans?
The most important thing is to understand how much your total balance is, what your interest rate is, and what your monthly payments are. You should also know when you’re required to start making payments. If you do have any questions or concerns, contact your loan servicer as soon as possible.
If you want to pay off your loans faster, you can do so by paying more than the minimum. This will also help you pay less interest over time.
Another popular way to pay less interest is to refinance medical school loans to a lower interest rate. Once you’ve secured a full-time job, you will likely qualify for lower interest rates than what you originally received as a student. Just be aware that if you refinance federal student loans, you will lose access to all the benefits associated with those loans.
6) How much can I borrow with medical student loans?
The amount you can borrow in medical school loans may depend on the type of loan. Borrowers who qualify for federal Direct PLUS loans can borrow up to the annual cost of attendance, and most private lenders also let students borrow up to the annual cost of attendance.
1 Ascent Student Loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 10/01/2022 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
Author: Zina Kumok