SoFi Announces Refinancing Product for Medical Residents
The San Francisco-based Social Finance, or broadly known as SoFi, has recently announced a new product focused on U.S. medical residents and fellows, allowing them to refinance their educational loans while pursuing their career.
The innovative Medical Resident Student Loan Refinancing product allows medical residents to make monthly payments of $100 during their residency, while keeping their student loan interest from compounding for up to four years.
Interest rates on the product start at 3.065 percent and can reach up to 7.755 percent. Both variable and fixed rates are offered.
In addition to that, the new SoFi offer also includes flexible payment schemes starting 54 months after the end of the fellowship. Depending on the loan contract, the repayment terms vary from five to twenty years.
Furthermore, SoFi also provides its medical residents and fellows with individual members' benefits, including wealth advice, career coaching services, and networking events.
This Isn't Out of the Blue
The new offer isn’t unwarranted. Medical school students have plenty of student debt to go around.
Compared to the other student borrowers, medical students must attend school for longer periods, racking up debt. Oftentimes, the starting residency salary isn’t enough to effectively pick up student loan payments.
According to LendEDU, in 2016, the costs for one academic year at a state medical school in the USA exceeded $32,495. Tuition fees at private colleges jumped to $52,515. Ivy League institutions such as Columbia University charged medical students $61,485 a year. Those numbers did not include rent, food, books and other related living expenses.
Many medical students are forced to take out private loans to cover these additional costs. Needless to say, the process of becoming a doctor is lengthy, expensive, and often related to higher debts.
No wonder that medical residents regularly top the list for the most debt-burdened group in the United States. In 2015, the average medical school debt balance for graduates was $183,000, and at the same time, medical residents make up to $60,000 a year.
When you take into account the average undergraduate debt of $24,000, the total medical school loan balance reaches more than $207,000.
As Meron Colbeci, the Senior Vice President of Product Management at SoFi noted, most of the medical follows often postpone the repayments of their student loans until later in their professional career when they have already gathered interest.
The new product by SoFi would allow them to take control and manage their debt at an earlier stage of their professional development. If you aren't a medical resident and have student debt, SoFi still offers a standard refinance loan to qualified student loan borrowers. Consolidation loan rates range from 2.54% to as high as 7.38%.