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.
