Paying Off Medical School Debt
The average medical school graduate now takes out about $183,000 in student loans. That’s a staggering number and paying off medical school debt can take years, even with an expected annual salary between $150,000 and $400,000, depending on location and specialty.
In addition, that giant sum will rack up tens of thousands of dollars in interest over the life of the loan – money borrowers could be using to enjoy their lives and invest in their financial futures.
Make a Repayment Plan A.S.A.P.
Here’s a universal truth about paying off medical school debt: the sooner you start, the better off you’ll be.
As soon as students graduate – and before they inflate their lifestyle to match their new income – they should make a repayment plan. They need to know exactly how much they owe and when they’ll be out of debt.
For example, let’s say a borrower has $170,000 in debt at 6% interest over a ten-year term. That individual will have monthly payments of around $1,887, and they’ll end up paying about $56,481.76 in interest.
Although those monthly payments should be manageable with a doctor’s salary, that’s a lot of interest that could go towards traveling, a down payment, or investment opportunities – rather than paying off medical school debt.
Save On Interest By Refinancing
Once borrowers are employed as physicians, they should consider refinancing – a move that could result in them paying off medical school debt more quickly and with less interest.
For example, by refinancing $170,000 at 4% interest over seven years, the borrower will have monthly payments of $2,323.70 – but they will only pay about $25,190 in interest. That’s a savings of over $31,000, and they’ll be debt-free three years sooner.
Determine your projected refinancing savings with our easy student loan refinancing calculator.
How to Get Started Paying Off Medical School Debt
Refinancing gives borrowers the opportunity to save a ton of money in interest and get out of debt more quickly, resulting in some much-deserved financial freedom with which to enjoy the lives and careers they’ve worked so hard to create. To get started paying off medical school debt more quickly, compare rates from lenders to find an ideal refinancing loan.