Medical School Loans: Compare Federal and Private Options

If you are attending medical school, chances are you’re going to have to borrow money through medical school loans to pay for the cost of tuition.

You should always use federal financial aid first to pay for medical school costs. That’s because federal loans typically have lower rates, they provide many repayment choices including income-driven options, and some medical professionals will have the chance to have their loans forgiven.

Unfortunately, there are limits on the amount of federal aid available and many medical school students hit those limits while attending school, so borrowing from private lenders may be necessary to cover the full costs of med school.

On this page:

• Compare Medical School Loans
• Federal Loans for Medical School
• 5 Best Private Medical School Loans
• Benefits of Private Loans for Medical School
• Downsides of Private Loans for Medical School

Compare Medical School Loans

Loan/Company	APR	Loan Amount
Direct Unsubsidized Loan*	6.08%	Varies
Grad PLUS Loan*	7.08%	Varies
Sallie Mae	4.37% – 9.98%	$1,000 – 100% of school-certified expenses
Wells Fargo	4.82% – 10.82%	$250,000 maximum
Earnest	4.82% – 10.82%	$1,000 – 100% of school-certified expenses
Discover	3.99% – 10.49%3	$1,000 – 100% of school-certified cost of attendance1
PNC	4.52% – 12.11%	Not disclosed

*This is a federal student loan.
Lowest rates shown for Discover’s in-school products include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

Federal Loans for Medical School

The two types of federal student loans you can use for medical school are Stafford Loans (only unsubsidized) and Grad PLUS Loans.

Whenever you apply for student loans for medical school, you should get the maximum amount of federal student aid first. This is 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 time you’re repaying the loan.
• You have ample flexibility when paying back your loan. You can change your payment plan as needed and choose an income-driven repayment plan or a plan where payments gradually increase over time. Putting loans into forbearance or deferment is also an option.
• Loan forgiveness options are available. Loans can be forgiven for public service work or if you’ve made enough 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 matter in determining your eligibility.

You can apply for federal medical school loans by completing your Free Application for Federal Student Aid (FAFSA) each year.

Unfortunately, there are annual and aggregate limits to the amount of federal aid you can receive. For many medical students, federal loans simply do not provide enough funding to pay for the costs of medical school. Because of this, many students will need to supplement their federal aid with private student loans.

5 Best Private Medical School Loans

We’ve ranked and rated 22 of the best student loan companies. Of those, here are five of the best that specifically offer medical student loans:

1. Sallie Mae
2. Wells Fargo
3. Earnest
4. Discover
5. PNC

1) Sallie Mae

Since 1973, Sallie Mae has been helping students to fund their education. While the company originally started as a federal student loan servicer, its main business is now providing private student loans. Sallie Mae is publicly traded and provides a variety of different types of private student loans including medical school loans. Here are some of the key things to know if you get a loan for medical school from Sallie Mae:

• Editorial Rating: 5/5
• Loan Amounts: $1,000 – 100% of school-certified expenses
• Loan Terms: 20 years
• APRs: 4.50% to 9.86% variable APR; 5.49% to 9.98% fixed APR
• Requirements: You must be currently enrolled in an M.D., D.O., D.V.M., V.M.D., or D.P.M. program.

Pros

• Long deferment period: You have a grace period of 36-month and can defer loan payments for up to 48 months during your residency and fellowship.
• Quick cosigner release: It’s possible to have your cosigner released from your loan after making just 12 consecutive on-time payments.
• No fees: You don’t have to pay any application or origination fees and there are no prepayment penalties if you pay off your medical school loans early.

Cons

• Hard credit check required: This means applying for the loan to find out your rate will impact your credit.
• Lots of customer service complaints: Many borrowers have left negative reviews on Consumer Affairs about Sallie Mae as a student loan servicer, although is common for a loan servicer so large.

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2) Wells Fargo

Wells Fargo offers private student loans for a variety of school levels, including medical school. The Wells Fargo MedCAP Alternative Loan for Health Professionals is tailored to help students looking to study in health-related fields. Here is what you need to know about it:

• Editorial Rating: 4.80/5
• Loan Amounts: $250,000 maximum
• Loan Terms: Not disclosed
• APRs: 4.82% to 10.39% variable APR or 5.29% to 10.82% fixed APR
• Requirements: You must be enrolled as a graduate student in an approved medical school.

Pros

• No annual borrowing limit: You may borrow up to the cost of education minus other financial aid with no limit for that school year.
• Many rate discounts available: Wells Fargo offers a customer discount for having a Portfolio by Wells Fargo account (0.50%), a checking account (0.25%), or a prior student loan (0.25%). Along with one of these, borrowers are also eligible for a 0.25% discount for making automatic payments.
• No fees: There is no origination fee, application fee, or prepayment fee.

Cons

• Full enrollment needed: Full enrollment in an approved medical school program by Wells Fargo.
• Higher interest rates: The interest rates tend to be little higher than some competitors.

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3) Earnest

Earnest was founded to help financially responsible individuals realize their dreams by looking comprehensively at your financial profile. The lender offers personal loans, student loan refinancing, and private student loans—including medical loans. Here are some key things to know abut Earnest’s medical school loans:

• Editorial Rating: 4.61/5
• Loan Amounts: $1,000 – 100% of school-certified cost of attendance
• Loan Terms: Not disclosed
• APRs: 4.69% to 12.78% fixed APR or 3.35% to 11.44% variable APR
• Requirements: You must be enrolled full-time in a degree-granting program at an eligible institution.

Pros

• Grace Period: You won’t have to repay your loans for nine months after graduation, which is three months longer than most lenders offer.
• Skip a payment: Once a year you may skip a payment on your student loans.
• No borrowing limit: You may borrow up to 100% of school’s certified cost of attendance.

Cons

• No cosigner release: Cosigner release is not available making the cosigner responsible for the lifetime of the loan.
• State Availability: Variable rates and deferring payments until after graduation are not available in all states.

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4) Discover

Discover is the third-largest credit card issuer in the United States. However, Discover also offers banking services, personal loans, and student loans, including medical school loans for graduate students. Here’s what you need to know.

• Editorial Rating: 4.59/5
• Loan Amounts: $1,000 – 100% of the school-certified cost of attendance. Aggregate loan limits apply.
• Loan Terms: 20 years
• APRs: 4.12% to 9.87% variable rate or 5.49% to 10.99% fixed-rate loans (Rates shown include an interest-only discount, as well as a 0.25% discount for being enrolled in automatic payments)³
• Requirements: You must be currently enrolled at least half-time in a health professions graduate program at an eligible school.

Pros

• Rewards for good students: If you earn at least a 3.0 GPA, you can get a one-time cash reward on each new Discover student loan.
• No fees: No application fees, origination fees, late fees, or prepayment penalties will be charged.
• Quick application: You can apply for a Discover student loan within 15 minutes or less online, from your mobile device, or by calling 1-800-Student.

Cons

• Only one repayment option: You will have up to 20 years for repayment, although you can repay your loan more quickly without penalty.
• No option for cosigner release: You can’t ever get a cosigner off a Discover originated loan unless you refinance.

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5) PNC

PNC is a bank holding company and financial services corporation. The bank has 2,459 branches spread across 19 different U.S. States and PNC is the ninth-largest U.S. Bank in terms of assets.

PNC offers asset management, estate planning, wealth management, general banking services, and loans—including medical school loans. If you want to cover the costs of becoming a doctor, physician assistant, or any other kind of medical practitioner, PNC is an excellent option.

Here are some key loan features you need to know about:

• Editorial Rating: 4.52/5
• Loan Amounts: Up to $65,000
• Loan Terms: 5, 10, or 15 years
• APRs: 4.52% to 11.79% fixed APR and 4.90% to 12.11% variable APR
• Application Deadline: Within 60 days after the end of the school term

Pros

• Applying online is quick and easy: You’ll get a decision on your application within minutes of submitting your information online.
• Apply after the school term ends: You can apply for a PNC Solutions loan for health professionals as long as 60 days following the end of a school term.
• No fees: You don’t have to worry about prepayment penalties, origination fees, or application fees.

Cons

• Cosigner release takes 48 months: This is much longer than many competitors.
• Loan payments begin quickly: You can only defer payments for up to six months after graduation while some competitors offer a longer deferment period. This does help you save on interest, however.
• Maximum repayment term of 15 years: Some competitors offer a longer repayment timeline, making payments more affordable.

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How We Chose the Best Medical School Loans

To find the best medical school loans, our Editorial Team analyzed each product by BBB rating (10%), variable APR (7.5%), fixed APR (7.5%), term lengths (15%), loan amounts (7.5%), in-school repayment options (10%), cosigner release availability (7.5%), forbearance options (5%), deferment options (5%), initial soft-credit pull (5%), customer support (5%), discounts available (10%), and extra benefits (5%).

Learn more about our ratings and methodology here.

Benefits of Private Loans for Medical School

While you should exhaust options for federal student aid first, there are some advantages of using private student loans to help you pay the costs of earning your medical degree. Some benefits include:

• More funding: You can usually borrow more with private student loans than federal loans. This makes it possible to get enough money to fully pay for your education. Many private lenders also offer loans to help you with expenses during your residency program or when studying for state exams.
• Many options for private lenders: Banks, credit unions, and online lenders all offer loans for medical students. You can shop around and compare rates and terms.
• No origination fees: It’s often possible to get medical school loans from private lenders that do not charge you an up-front fee to originate your loan. Federal loans, on the other hand, typically do charge you an origination fee.

Medical loans is a personal choice but is very popular among medical students as the costs can reach well over $50,000 per year in tuition alone. Most medical students do not have over $200,000 in cash to allocate towards tuition, nor do they have the time to get a high paying job while in medical school.

Daniel Mendelson, Author of BYE Student Loan Debt

Downsides of Private Loans for Medical School

There are also some big downsides to taking private student loans that have to be considered as well. Some of these downsides include:

• Higher rates: The interest rates charged by private lenders are usually higher than what you pay for loans from the Department of Education.
• No chance to change your repayment options during repayment: You have to stick to the repayment schedule that was set by your private lender upfront and can’t change payment plans as you could with federal student loans—unless you refinance your loan.
• No income-driven payment options and limited forbearance options: You cannot get private loans with payments determined by income like federal income-driven repayment plans. And while some lenders do allow you to put loans into forbearance temporarily if you can’t make payments, options for deferment and forbearance are far more limited when you have private medical school loans.
• No forgiveness: Even if you work in public service or join the military, you cannot get private medical school loans forgiven, and paying off medical school debt will take a long time to achieve.

Bottom Line: Medical School Loans are Available from Many Sources

As you can see, medical school loans—a specific type of graduate student loans—can be obtained from both the federal government and from many different private lenders.

You’ll want to use federal loans first to take full advantage of borrower benefits, and then shop carefully among online lenders, banks, and credit unions to find affordable private loans to help you pay for your medical degree.

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Discover Student Loan Disclosures

1. Aggregate loan limits apply.
3. Lowest rates include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable Margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month LIBOR is 2.00% as of January 1, 2020. Discover Student Loans will adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Please click here for more information about interest rates.
See Discover Student Loan Disclosures.