Updated
May 17, 2023 Medical school graduates are looking forward to exciting and rewarding careers, but they also may have to deal with quite a bit of debt. Adding the costs of medical school to those of undergraduate studies, the average 2018 graduate faced $221,500 worth of student loan debt.
Thankfully, doctors have options when it comes to dealing with their debt, and one of those options is refinancing. When you refinance medical school loans, you take out a new loan that pays off your old one. For instance, refinancing $200,000 worth of debt, and lowering your interest rate from 6.0% to 4.5%, will save you more than $28,000 over a 15-year loan term.
The lender that is best for you may depend on whether or not you have completed your residency. In either case, the medical student loan refinancing companies below are our top-rated partners and can be a good place to start your search.
On this page:
- Best lenders for refinancing medical school loans
- When refinancing medical school loans makes sense
- How to refinance medical school loans
- Refinancing during residency vs. after residency
- What to do if you don’t qualify for medical student loan refinancing
Best lenders for refinancing medical school loans
The following student loan refinancing lenders base their eligibility requirements on borrowers’ earning potential (as determined by their future field of practice) as well as common lending factors like credit score and current income. For graduates who have yet to establish a credit history, a cosigner may be required.
These lenders all also have competitive rates and flexible repayment terms that include minimum payments during residency, if desired.
Here are our picks for the best medical student loan refinancing lenders from our partners.
- Best Overall: Earnest
- Best for Refinancing Over $500k: ELFI
- Best for Refinancing During Residency: Splash Financial
- Best Large Bank: Citizens Bank
Earnest
Best overall
- Variable rates (APR): 5.15% – 8.94%
- Fixed rates (APR): 4.96% – 8.99%
- Loan amounts: $5,000 – $500,000
Earnest is an online lender that offers student loans and personal loans. To date, the company has refinanced over $10 billion worth of student loans.
In addition to highly competitive rates, borrowers who refinance with Earnest can expect easy application and loan payoff processes, as well as a host of options to customize repayment. The company’s customer service is also highly rated by borrowers.
- Minimum credit score: 650
- Interest rate reduction: 0.25% automatic payment discount
- Term lengths: 5 – 20 years
- Fees: None
Key benefits
While Earnest doesn’t offer specific benefits to those refinancing medical school loans, their standard benefits are particularly helpful for those with high balances. For instance, the company’s 0.25% autopay discount can add up to thousands in savings, and you can increase your payments at any time to expedite the process (and save money in interest).
Earnest also offers borrowers the ability to skip one payment a year without any consequences and a choice between biweekly and monthly payments. The company services loans in-house, helping to simplify the process.
ELFI
Best for refinancing over $500,000
- Variable rates (APR): 4.78% – 8.49%
- Fixed rates (APR): 5.08% – 8.04%
- Loan amounts: $15,000 – Total outstanding loan balance
Education Loan Finance, or ELFI, is an online lender dedicated to student loan refinancing and providing new loans for graduates, undergraduates, and parents. The company is a division of SouthEast Bank.
Like Earnest, ELFI offers customers a great refinancing experience. The average customer who refinances with ELFI saves $272 a month and $13,940 over the lifetime of their loan, according to their website.
- Minimum credit score: 680
- Minimum annual income: $35,000
- Term lengths: 5, 7, 10, 15, or 20 years
- Fees: None
Key benefits
ELFI has no prepayment, application, or origination fees. The lack of prepayment penalties is particularly useful for med school graduates looking to pay off their loans early.
ELFI is also recognized for its team of Student Loan Advisors (SLAs), who guide borrowers through the refinancing process. Each borrower is assigned a SLA who stays with them from application to disbursement.
Splash Financial
Best for refinancing during residency
- Variable rates (APR): 4.74% – 9.99%
- Fixed rates (APR): 4.96% – 9.99%
- Loan amounts: $5,000 – Total outstanding loan balance
Launched in 2013, Splash Financial is one of the first student loan refinance companies to focus primarily on medical student borrowers in residencies or fellowships.
What makes Splash so helpful for medical students is that the company allows you to pay as little as $100 a month during your residency or fellowship. This period of $100 payments is capped at 84 months. Unpaid principal and interest are capitalized at the end of training.
- Minimum credit score: 660
- Interest rate reduction: 0.25% automatic payment discount
- Term lengths: 5, 7, 8, 10, 12, 15, 20, or 25 years
- Fees: None
Key benefits
In addition to competitive interest rates and strong customer service, Splash offers customers referral bonuses—if you refer someone who refinances their loans with Splash, you each get $250.
Citizens Bank
Best large bank
- Variable rates (APR): 5.09% – 11.67%
- Fixed rates (APR): 5.39% – 11.88%
- Loan amounts: $10,000 – $500,000
Citizens Bank is one of the largest banks in the country and offers a host of loan products. Among these is their Citizens Bank Education Refinance Loan for students.
Citizens Bank doesn’t gear their refinancing specifically to medical school graduates, but as a large bank, they’re able to accommodate high loan amounts.
- Interest rate reduction: 0.25% loyalty discount and 0.25% automatic payment discount
- Term lengths: 5, 7, 10, 15, or 20 years
- Fees: None
Key benefits
Citizens Bank offers cosigner release to borrowers who have made 36 consecutive on-time payments. As some recent medical school graduates haven’t had the chance to establish their own credit history, they may need cosigners when refinancing.
When refinancing medical school loans makes sense
Refinancing can help you save a lot of money in interest costs if you are eligible for a lower rate than you are currently paying. Before you refinance, though, it’s important to decide if it makes sense for you.
Here are some situations in which refinancing is a good idea:
You aren’t dependent on federal benefits & repayment plans
It always depends on individual circumstances, but for many medical school grads who don’t plan on using federal benefits like Public Service Loan Forgiveness and income-driven repayment plans, refinancing federal student loans can help reduce both interest costs and monthly payments.
You have high-interest private student loans
If you took out private student loans to pay for medical school, you may now be eligible for a lower interest rate if you have a better credit score or income.
In this case, it almost always makes sense to refinance your loans, as long as your new refinance lender offers the same benefits as your old lender.
You want to consolidate multiple loans
Refinancing allows borrowers to consolidate multiple private and/or federal student loans into one, which makes managing medical school loan repayment much easier.
How to refinance medical school loans
If you’re going to refinance medical school loans, here are some steps to help you along the way:
- Gather all your information. If you’re planning to apply to refinance your loans, you’ll still need access to information about yourself and your current loan. The personal information you’ll need includes your income, Social Security number, and any other monthly payments you make. For your loan, you’ll need to know your monthly payment and outstanding balance.
- Confirm your eligibility. Each lender has its own eligibility requirements, but there are often similarities. Many lenders will only refinance medical school loans if you’ve graduated, so you’ll have to show proof of the accomplishment. Lenders also have minimum credit score requirements that are usually in the mid to high 600s, so if you can’t meet them, you’ll need a cosigner.
- Find the best lender for you. Each lender is going to offer you a different interest rate, and by extension, a different total payment. However, there are other factors to consider, such as benefits offered in times of financial hardship, customer service, and loan terms offered. In the end, you have to evaluate your own situation to determine which lender seems like the best fit.
Refinancing during residency vs. after residency
An important factor to keep in mind when refinancing medical school loans is whether or not you’ve completed your residency. The answer will play a role in determining how you should proceed.
If you’re refinancing during your residency, it’s critical to consider how interest will accrue during this period. Some companies, like Splash, offer incentives that protect those who choose to refinance during residency, while others will require full payment. If you can’t find a lender who offers these benefits and you have federal student loans, it might pay to hold off on refinancing and try to switch to an income-driven repayment plan.
If you’re refinancing after you’ve completed your residency, you won’t necessarily need the same financial protections, but you’ll still want the best price. Make sure to shop around for the lowest interest rate, and avoid companies that charge prepayment penalties. In a few years, you could be working in a well-paying role and may want to pay your balance off as quickly as possible.
What to do if you don’t qualify for medical student loan refinancing
Many student debt experts recommend medical residents start paying off their medical school debt as soon as they can. However, paying a $1,500 monthly payment on less than $60,000 of income is a lot easier said than done.
At the very least, residents should try making interest payments to keep their loan balances from growing. Considering loan payments consist primarily of interest in the early years, though, these would still be large monthly payments.
If you have private student loans, you may be able to temporarily pause payments during your residency or fellowship or extend your repayment plan over a longer period of time to help lower payments.
If you have federal student loans, there are specific repayment plans that can help you lower your monthly payments:
- Income-driven repayment plans: These plans base payments on a percentage of your income. PAYE and REPAYE are popular with doctors.
- Extended repayment plan: Stretch your payments out over a longer period of time, lowering your monthly payments.
- Graduated repayment plan: Monthly payments start out lower and increase over time.
>> Read More: Best student loan refinance companies