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Best Medical School Loans
Enrolling in medical school requires some huge sacrifices that could be well worth the reward later on. While federal aid is available for medical school, it’s often not enough to cover the full cost of tuition and other fees year after year. This is why private loans are such a popular option.
Written by:Choncé Maddox
The average cost of medical school is around $54,698 per
year according to EducationData.org. A degree typically takes 4 years to
complete and residency can last anywhere from 3 to 7 years. Medical school is
also very time-consuming making it hard for students to balance school and a
full-time job. All these factors contribute to the need for an unsecured loan
to pay for medical school.
Our experts recently narrowed down some of the best medical
school loans to consider. In this article, we’ll share some best practices for
getting a medical school loan along with what you can expect from some of the
best lenders.
Top Picks for The Best Medical School Loan
- Discover - Best For Fast Funding
- Earnest - Best For Low Rates
- SoFi - Best For Flexible Repayment Options
- Laurel Road - Best For Medical Students Going Into Practice
- College Ave Student Loans - Best for a Longer Repayment Terms
Best Medical School Loans for 2024 - Full Overview
Discover - Best For Fast Funding
Discover offers one of the best medical school loans if you’re looking to supplement costs after receiving other funding such as federal student loans. Discover has low fees, flexible repayment options, and great rates. There is also an interest rate reduction if you set up automatic payments. For medical school loans, there are no loan use limitations to worry about so you can spend the money on the expenses you need to cover most when attending school.
Pros
Cons
Discover lets you borrow anywhere from $1,000 to the total cost of attendance for your certified medical school. There are no origination fees, late fees, or prepayment penalties. Interest rates range from 4.49% to 8.74% (fixed) and Discover provides a quick decision in most cases after you submit an application online.
Discover does factor in your credit score, length of credit history, the number of accounts, and other factors. This company has also been known to have stricter borrower requirements than other lenders but you can use a cosigner.
The Bottom Line
If you have great credit and need a private loan to cover a portion of your medical school expenses, Discover’s personal loan could be a great option.
Try DiscoverRead more in the full Discover review.
Earnest - Best For Low Rates
Earnest offers private medical school loans that offer the most flexible repayment options allowing you to skip a loan payment once a year if needed. They offer low rates and fast decisions for applications, usually within 72 hours. Earnest also allows you to prequalify for a medical school loan online in just minutes.
Pros
Cons
Earnest’s medical school loan can cover your school tuition, books, living expenses, meals, and more. Loan rates start at 0.94% for a variable interest rate and 3.24% for a fixed rate. This includes a 0.25% rate reduction for setting up auto-pay. With Earnest, you get a 9-month grace period and there are no fees.
You have the option to make low $25 payments while you’re in school. Earnest does require a minimum FICO score of 650, 3 years of credit history, and no bankruptcies. You can apply for a medical school loan completely online and even invite a cosigner to your application to help you qualify.
The Bottom Line
Earnest has designed one of the most flexible private loan options for medical students especially if you are unable to make payments while you’re in school. It’s easy to defer payments and enjoy a longer grace period while you earn your medical credentials.
Try EarnestRead more in the full Earnest review.
SoFi - Best For Flexible Repayment Options
SoFi makes it easy to apply for a medical school loan online and doesn’t have many fees. The interest rates can be higher than other lenders especially if your credit score is lower. However, they have great membership perks and multiple options to repay your loan. With SoFi, you can prequalify for a loan online and add a cosigner with just a few clicks. SoFi does have an eligible list of schools that it will service loans for so keep this in mind.
Pros
Cons
With a medical school loan from SoFi, you’ll need to borrow a minimum of $5,000 and repayment terms range from 5 years to 15 years. Fixed rates range from 4.75% to 13.30% and variable rates range from 2.59% to 11.98%. You can choose from deferred, partial payment, interest-only, and immediate payment options to repay your loan.
If you become a SoFi member, you can score discounts on your interest rate and gain access to career services, financial advisors, networking events and more. Becoming a member is free and there’s no catch. The major downside of getting a medical school loan with SoFi is that once you’re approved, it can take 4 to 6 weeks for your school to receive the loan funds.
The Bottom Line
While they don’t have the lowest rates around and take a longer time to provide funds, SoFi offers a ton of repayment options, reasonable rates, and a free membership program to benefit from.
Try SoFiRead more in the full SoFi review.
Laurel Road - Best For Medical Students Going Into Practice
Laurel Road provides medical school loans including loans for residency students as well. The loan can be used to cover tuition expenses, books and materials, living costs, and more. You can prequalify initially with a soft credit pull to preview your loan options. If your application is approved, you could receive loan funds within 7 business days. Laurel Road also allows you to use a cosigner if you don’t meet the loan requirements to qualify.
Pros
Cons
Laurel Road offers unsecured medical school loans in all 50 U.S. states.The loan servicer also allows you to borrow up to $80,000 if you are a physician or dentist in practice within 12 months from completing training with a signed contract to practice. If you are still in school, you can borrow up to $45,000. Repayment terms range from 3, 4, or 5 years but you may be able to qualify for a 7-year term. Rates tend to be a little higher and range from 7.25% to 24.50%. When you set up automatic monthly payments, you can get a small rate discount.
The Bottom Line
Importantly, Splash Financial runs a soft credit inquiry. With that, there is no negative impact on your credit score. It takes just three minutes to explore a wide range of options.
Try Laurel RoadRead more in the full Laurel Road review.
College Ave Student Loans - Best for a Longer Repayment Terms
College Ave Students Loans provides one of the best medical school loans around with competitive interest rates. Loans are tailored to fit your needs and lifestyle and there are multiple payment plans available. You can prequalify for a loan online and also choose from a wide range of repayment options. College Ave Student Loans offers one of the longest grace periods compared to other lenders as well as automatic deferment during residency and fellowship.
Pros
Cons
College Ave Student Loans lets you borrow up to 100% of the costs for your medical school tuition. Rates range from 1.99% to 10.45% for variable interest and 3.99% to 11.46% for a fixed-rate loan. These rates include a small discount when you enroll in autopay.
Repayment terms range from 5 years to 20 years and there are 4 different repayment options. There are also no origination or prepayment penalties with this loan. It takes just 3 minutes to prequalify online and see which loan options you qualify for.
The Bottom Line
College Ave Student Loans is an ideal option if you are looking for more flexible repayment options, competitive rates, and a longer grace period. You’ll also have to option to lock in a longer repayment term which could make loan payments more affordable.
Try CollegeAve
Read more in the full CollegeAve review.
Education Loan Finance - Best For Lower Fees
Education Loan Finance or ELFI offers medical school loans with no application, origination, or prepayment fees. You can prequalify online in just 2 minutes to view your loan term options. From there, you can complete an application online and verify your enrollment status. To qualify for a loan, you only need to be enrolled in medical school at least part time. While you don’t need a cosigner to qualify, ELFI does allow you to add a cosigner to your application. All applicants also receive access to a Personal Loan Advisor who is available by text, email, and phone.
Pros
Cons
ELFI allows you to borrow anywhere a minimum of $10,000 to cover medical school costs. Repayment terms range from 5 to 15 years and interest rates start at 1.30% for a variable APR and 3.20% for a fixed APR. You’ll need a minimum credit score of 680 to qualify but can use a cosigner as well.
The Bottom Line
ELFI have an easy and streamlined online application and accepts borrowers with a credit score lower than 700. To access their low student laon rates, you’ll need excellent credit and the company is very upfront about fees.
Try ELFIRead more in the full ELFI review.
Sallie Mae - Best For Cosigners and Less Than Half Time Enrollment
Sallie Mae offers graduate medical schools with no origination fee. You can cover 100% of your certified-school expenses including tuition, fees, books, housing, meals, travel, and even electronics needed for school. You can get a small interest rate reduction for setting up automatic monthly payments. Sallie Mae also has a great cosigner release program after you make 12 on-time principal and interest payments and meet certain credit requirements.If you need a loan to help cover medical residency expenses such as costs for relocating, Sallie Mae offers up to $30,000 to cover these costs.
Pros
Cons
Sallie Mae’s medical school student loan has interest rates starting at 2.62% for a variable APR and 4.75% for fixed APR loans. You get a grace period of 36 months and a deferment option of up to 48 months during residency and fellowship.
If you set up automatic monthly payments, you’ll receive an interest rate reduction of 0.25%. When you make interest-only payments during your grace period, you can get another 0.25% interest rate deduction for a total of 0.50% lower than your standard APR.
Another unique feature of this medical school loan is that you may be able to get funds being enrolled in school less than half time.
The Bottom Line
Wile Sallie Mae offers slightly higher minimum interest rates than other student loan lenders, they offer plenty of payment flexibility and even interest rate discounts. You will likely need a cosigner but getting a cosigner release is easy and this loan has very few added fees.
Try Sallie MaeRead more in the full Sallie Mae review.
Ascent - Best For Higher Borrowing Amounts
Ascent offers medical school loans with flexible repayment plans and competitive interest rates. You can check rates online without impacting your credit. Ascent allows you to use a cosigner but you must also complete a brief financial literacy course as part of the process to become eligible for funding.
Pros
Cons
Ascent had made our list of best medical school loans due to a variety of borrower-friendly features. Loan rates start at just 1.75% for a variable APR and 5.00% for a fixed APR. You can borrow up to $200,000 and repayment terms range from 7 to 20 years (capped at 15 years for a fixed-rate loan).
Payments are also deferred for up to 36 months after you graduate from medical school. During school, you can pay an optional $25 per month or make interest-only payments.
The Bottom Line
Ascent allows you to borrow higher amounts for medical school and has a range of repayment terms to make payments more manageable. Their interest rates are a little higher than other lenders, but you can make interest payments during deferment and also use a cosigner to help you qualify.
Try AscentRead more in the full Ascent review.
How to Choose the Best Medical School Loan?
There are tons of medical school loan options. This is why it’s important to focus on key factors that make one loan a better option based on your preferences and situations. To help you choose the best medical school loan, consider the following factors. Keep in mind that these are the same parameters our experts used to rank the top lenders featured in this article.
- Loan Features: Loan features such as the loan terms, minimum and maximum amounts, and loan use limitations can make or break a customer’s decision to borrow from a particular lender.
- Interest rates and fees: Consider the type of fees the loan has along with the interest rate you’re offered. Is it higher or lower than other loans?
- Application process: Most people prefer a streamlined and low-stress application process. Assess how the lender allows you to apply or if you can get prequalified quickly online. How quickly do they provide a response to applications and how much supporting documentation is needed?
- Qualification process: Some medical school loans are geared toward borrowers with excellent credit while others cater to lower credit scores. Also, look into any income requirements, co-signer/joint application options, or membership requirements.
- Customer support: Consider whether the loan company provides accessibility to a live customer service rep if you have questions that need answers. Also, see if they offer options such as phone and chat support along with whether those hours are flexible enough to fit your schedule.
- Online user reviews: Online reviews are always a perfect indicator of whether a personal loan would be a good option. Check out some customer reviews on the lender to gain valuable insights.
- Perks and Bonuses: Don’t forget to examine any perks and bonuses that are offered with the loan such as payment flexibility, advertising transparency, and advanced technology.
Best Medical School Loans - Main Features
| Company Name | Est. APR | Min. credit score | Loan Amount | Loan term |
|---|---|---|---|---|
| Discover | 4.49% - 8.74% Fixed 2.49% - 6.99% Variable | Not disclosed | Up to 100% of school costs | Up to 20 years |
| Earnest | Min. 0.94% Variable Min 3.24% Fixed | 650 | Depends on school | Varies |
| SoFi |
4.75% - 13.30% Fixed | Not disclosed | Up to $20,500 annually $138,500 total | 5 to 15 years |
| Laurel Road | Min 7% | Not disclosed | $45,000 to $80,000 | 3,4, or 5 years |
| College Ave | Min 1.99% Variable Min 3.99% Fixed | Mid 600s | Up to 100% of school costs | 5 to 20 years |
| Education Loan Finance | Min 1.30% Variable 3.20% Fixed | 680 | Depends on school | 5 to 15 years |
| Sallie Mae | 2.50% - 12.10% Variable 4.25% - 12.84% Fixed | Not disclosed | Up to 100% of school costs | Varies |
| Ascent | 1.75% - 11.12% Variable 5.00% - 14.96% Fixed | Not disclosed | Up to $200,000 | 7, 10,12, 15, or 20 years |
What’s The Average Cost of Medical School?
The average cost of medical school is around $54,698 per year. According to EducationData.org, the average medical school graduate has $215,900 of medical school debt. These totals also may or may not include additional costs such as housing, food, electronics, and equipment for the school and other costs a medical student may incur while trying to attend school. Medical school can get expensive quickly which is why private student loans can be such a relief.
How Do Medical School Loans Work?
Do medical school loans cover living expenses?
Yes, so long as there are no loan use limitations about using loan funds for this purpose. Many medical students are unable to work a full or part-time job during school due to the intensity of their program. With a medical school loan, you can try to use some of the loan funds to cover living expenses while you get through all your requirements.
What’s the maximum amount you can borrow for medical school?
How much you can borrow depends on the type of funding, your school, and other factors. Studentaid.gov states professional and graduate students can borrow up to $20,500 in subsidized loans. Private lenders allow you to borrow more and can supplement your funding needs for tuition and other expenses. Some private lenders allow you to borrow up to 100% of your medical program’s costs.
What’s the average medical school debt?
Medical school grads have an average student debt amount of $194.280. Around 14% of medical students attending public schools said they had at least $300,000 in average medical school debt and undergraduate debt combined.
When does repayment begin on medical school loans?
Different lenders have different repayment plans. Some lenders allow you to defer payments while you’re in school but you can choose to pay a small amount monthly including interest-only payments. Required payments typically begin after a grace period that can vary from 6 to 36 months depending on the lender.
How long does it take to pay off medical school loans?
It depends on factors such as your repayment term, interest rate, and monthly payment amounts. Depending on your lender, you may be able to choose a repayment term that aligns with the timeline you had in mind for repaying your medical school debt. Most lenders also don’t penalize extra payments or pay off your loan before the repayment term end.
Are medical school loans tax deductible?
The IRS also allows you to deduct the interest paid on your medical student loan as well once you start repaying it. Talk to a CPA or your tax specialist to see if your specific medical school loan is tax deductible and how to proceed with claiming that deduction.
Are there prepayment penalties on medical school loans?
No, most lenders don’t penalize you for paying ahead on your medical school loans or even paying them off early. Just make sure you pay at least the minimum amount each month to avoid a late fee.
Can you refinance medical school loans?
Yes, you can refinance medical student loans during residency or wait to refinance when you become an attending physician. Refinancing can help you lower your payments or even save money by lowering your interest if you’re able to lock in a lower interest rate.
Is there loan forgiveness on medical school debt?
You may qualify for medical student loan forgiveness if you took out loans to pay for school. Generally, doctors who work in the public sector can see if they qualify for loan forgiveness. Public Service Loan Forgiveness (PSLF) is available through the U.S. government for Direct Loans after you’ve made 120 qualifying monthly payments under a qualifying repayment plan while working for a qualifying employer. Keep in mind that private student loans don’t qualify for forgiveness programs.
Types of Medical School Loans
There are a few different types of medical school loans that we’ll discuss below.
Federal Loans for Medical School
Graduate and professional students such as those attending medical school can borrow up to $20,500 in Direct Unsubsidized loans. Direct PLUS loans for parents of graduate students can be used to cover the remainder of the student’s college costs determined by the school (that aren’t covered by financial aid).
Federal student loans tend to have lower interest rates than private loans and you could also qualify for federal relief programs such as deferment, forbearance, and student loan forgiveness. You also don’t need a cosigner or credit check to qualify for these loans. The major downside is that with the medical school you may quickly reach the maximum borrowing limit for tuition and other fees. Still, it’s recommended that you review your federal student loan options first by completing a FAFSA and visiting StudentAid.org for more information on your options.
Private Loans for Medical School
Private loans are a popular option for medical schools because private lenders tend to offer higher borrowing amounts and fewer restrictions on the use of the loan. You will likely, need to get your credit run or use a cosigner and interest rates might be higher than a federal student loan.
However, many private student loan lenders are offering more flexible payments, longer grace periods, deferment, and other benefits.
Other Loans
There are a few other loan options to help you pay for medical school and one of those is a Primary Care Loan through the Bureau of Health Workforce. This low cost federal loan program allows you to borrow varying amounts depending on the financial aid office at your school and how much PCL funds are available at the time. There’s an interest rate of 5% that accrues after a 12-month grace period. Repayment periods range from 10 to 25 years.
Medical Residency Loans are another borrowing option to consider if you need additional money during residency once you finish medical school. These loans can be used to cover relocation costs and other expenses.
If you’re going to use a private loan for medical school costs, check to see if the lender also extends loan coverage to residency expenses as well. This could help you avoid having to fill out two different applications and undergo multiple credit screenings.
How to Get a Student Loan for Medical School
- Fill out a FAFSA - Filling out a FAFSA online should be your first step to getting a student loan for medical school so you can see if you qualify for any federal loans
- Consider prequalifying with a private lender - Private loans are still a solid option for getting the money you need to cover what federal loans can’t cover. If a lender allows you to prequalify online without getting a hard inquiry, spend a few minutes filling out the brief form.
- Compare rates and loan terms - Refer back to our earlier section of this article about choosing the best medical school loan for your situation. Narrow down which loan terms are most important and compare rates and other features
- Submit a formal application - Once you know which loan option you’d like to proceed with, submit a formal application and upload supporting documents for verification. You may want to use a cosigner at this time if you need help qualifying for a loan.
- Review and accept loan terms - Carefully review the loan terms and ask questions if anything doesn’t make sense. When you’re ready, accept the loan terms and the lender will fund your loan shortly after. Sometimes it takes days or even weeks to receive funding depending on the lender. Make sure you understand where the funds will be sent and how they will arrive.
Conclusion
If you’re currently attending or thinking of enrolling in medical school, you can obtain the money you need to cover expenses with ease. This list of best medical school loans includes a variety of quality lenders to meet various needs and preferences. Start by narrowing down what you’re looking for in a medical school loan and then rate shop and compare features from different lenders.
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Choncé Maddox
Choncé Maddox is a Certified Financial Education Instructor (CFEI) and personal finance freelance writer.
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