If you are carrying hefty medical school loan debt, which most physicians are, then now is a good time to revisit your next move. According to 2019 stats, the average medical school loan debt is up to 201,490. 

If you are currently enjoying the 0% interest rate for federal student loans, this is a reminder that the 0% interest is scheduled to end on January 31, 2022. Now is a great time to start investigating your options, because there are some lucrative incentives for refinancing now.

Normally physicians refinance after they no longer qualify for the Revised Pay as You Earn program unless they are trying to qualify for federal loan forgiveness either through the Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment Forgiveness (IDR).

However, this year has been different with the executive order of President Trump’s student loan corona relief. This relief has been extended until January 31, 2022, keeping the federal student loan rate at 0% a little while longer.

But now January is fast approaching and there are some solid reasons to look to revisiting your student loan options. 

Medical School Loan Debt Consolidation

First, let’s clarify the options. If you are considering consolidation, the biggest point to know is this is only available for federal loans. Consolidating student loans is to lump all your federal loans into one single payment with new loan terms. Often the new interest rate is the average of all your old loans, and it may extend your repayment time. 

Refinancing Student Loan Debt

Refinancing is available for all student loans both federal and private, this is where a private lender pays off all your student debt and creates a new loan with new terms, and one single payment. You may be able to find a more competitive interest rate going this route. However, if you are looking toward federal loan forgiveness through PSLF or IDR then moving to a private lender isn’t for you.

Lucrative Options

Currently, it has made sense to postpone refinancing because of the current 0% of federal student loans. However, the 0% interest only has a few months left and there are a few companies offering lucrative incentives. 

Right now, SoFi is matching the 0% interest rate and CommonBond is offering 0% interest for the next 6 months, which now exceeds the federal cutoff date. 

Additionally, with inflation increases, it’s likely interest rates will soon follow suit. So it may be wise to refinance now while interest is still low and before the crowds roll in to refinance at the end of the 0% federal interest.

Conclusion

Student loans are a hefty burden and now is a great opportunity to look for your best options. A financial advisor specializing in healthcare can help. You can also check out our article on more ways to get out of student loan debt faster, for additional tips.