11 Best Companies for Refinancing Medical School Loans

Should you refinance medical school loans?

Refinancing is one of several strategies for paying off medical school debt. The best option for you will depend on factors like the type of loans you have — federal or private — and your career goals.

If you have federal loans, consider refinancing if you won’t need an income-driven repayment plan and don’t plan to pursue medical school loan forgiveness. While there are several forgiveness programs, only federal loans qualify for the widest available one: Public Service Loan Forgiveness.

If you borrowed private medical school loans, there’s little downside to refinancing if you can qualify for a lower interest rate. That may be during your residency, when you become an attending physician or both.

Refinancing medical school loans during residency

Student loans can be a financial burden while you’re making less money as a resident. You have two primary options to help manage those payments:

1. Use a federal income-driven repayment plan. This could shrink your federal loan payments to as little as $0 during residency, depending on your income. Opting for income-driven repayment can make sense if you want to keep your options open post-graduation — to pursue nonprofit work or a lower-paying career, for example — or you can’t meet a refinance lender’s financial criteria.

2. Refinance during your residency. A few lenders have specific refinancing programs for medical residents. These let you pay as little as $100 a month before full payments start once your residency ends. Consider this option if refinancing medical school loans fits your long-term career goals and you can qualify for a lower interest rate while you’re a resident — you may need a co-signer to do that.

No matter which strategy you choose, interest will likely accrue faster than you can pay it — so you may end up with a balance at the end of your residency that's bigger than what you started with. Making larger-than-minimum payments can help manage the interest.

» MORE: Income-driven repayment: Is it right for you?

Refinancing medical school loans after residency

If you choose not to refinance during your residency, use that time to work on building your credit so you can get the best possible rate in the future. Refinance as soon as you can qualify to save the most money.

For example, refinancing $206,924 — the average medical school debt in 2023 — from a 8% APR to a 5% APR would save about $316 a month and more than $37,000 total. But that assumes you have 10 years left on your loan term. If you waited a couple years, your potential savings will shrink.

As your income continues to grow, you'll likely have more refinancing options and be eligible for lower interest rates. It can make sense to refinance medical school loans multiple times because lenders typically don’t charge fees to do so, meaning you start saving right away.

How to refinance medical school loans

1. Confirm that refinancing is right for you. Before refinancing federal student loans, triple-check that you are comfortable giving up federal loan benefits including access to Public Service Loan Forgiveness and income-driven repayment plans. If you have a mix of federal and private student loans and want to maintain access to those programs, refinance just the private loans.

2. Check if you qualify. You generally need a credit score that's at least in the high 600s to qualify for student loan refinancing. The higher your score, the lower the rate you'll likely get. Some lenders have pre-qualification processes that allow you to see a personalized rate before you officially apply — they'll do a soft credit pull, which won't hurt your credit score, to determine your rate.

3. Shop around and apply. Get rate estimates from multiple lenders and choose the one that offers you the lowest rate.

Consolidating medical school loans

Refinancing at a lower interest rate is only possible with private lenders. Some may refer to their products as med school consolidation loans, but private consolidation loans and refinancing are the same thing.

Federal consolidation, like refinancing, can combine your loans into a single loan. But you can only consolidate your med school debt with the government if you have federal student loans.

Medical student debt consolidation won’t save you money; your interest rate will be the weighted average of your original loans. But consolidation can make sense as a loan management strategy. For example, you may want to take this step before pursuing Public Service Loan Forgiveness — that way you’ll only have to track a single loan payment.

» MORE: Student loan consolidation vs. refinancing

STUDENT LOAN REFINANCE RATINGS METHODOLOGY

Our survey of more than 26 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and the top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.

We consider 41 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.