Medical school is a big investment, and anyway you can save money is a good idea. One way to do that is by refinancing your medical school loans. But what if you already have an existing loan? Should you refinance it as well? As with most things in life, the answer depends on several factors.
How to refinance a medical school loan
When you refinance a medical school loan, it means that you take out a new loan with better terms than the old one. In other words, you’ll get more favorable conditions on your new student loans than what you had before. The main advantage of getting the best student loan refinance rates is that it allows borrowers to save money on interest costs and monthly payments by getting access to lower rates and longer repayment terms.
You may not be able to refinance through your current lender if:
- You have an undischarged bankruptcy.
- You owe less than $5,000 in student loans (or $7,500 if married filing jointly).
How much can you save by refinancing your student loans?
The answer to this question depends on a few factors. First and foremost, the amount you have to pay down is going to depend on the interest rate of your new loans.
Getting a lower interest rate will save you more money in the long run than what you’d save on your monthly payments. If your current student loan debt is higher than average (or if there are multiple types of loans), then refinancing could be beneficial for paying off some or all of those debts faster.
When might you consider refinancing your med school loans?
Refinancing your medical school loans isn’t always a good idea. But if you’re able to save money, change the terms of your loans, consolidate multiple loans or unlock a tax credit, refinancing may be worth considering.
Is there a tax credit for doctors who see Medicaid or Medicare patients?
There is a tax credit for doctors who see Medicaid or Medicare patients, but it’s not the same thing as medical malpractice insurance. The tax credit is for the cost of malpractice insurance (for example, you might have to pay $40,000 per year in premiums), but it’s not meant to cover your actual costs. If a doctor were to claim that she was getting reimbursed under this type of plan and then spent more than she claimed on her policy because her business wasn’t as successful as expected, then that would be a fraud.
Suppose you’re interested in getting this type of coverage through your employer but don’t know if or how it works with your current medical school loan situation; contact experts like Lantern by SoFi today! They’ll explain what options are available and help determine which suits you best.
In the end, refinancing your med school loans can be a great way to save money and improve your financial situation. But it’s important to weigh all of the factors before making any big decisions about refinancing or paying off your loans early. You’ll want to think about how much you can afford on a monthly basis, as well as whether or not you need an adjustable rate (which may fluctuate based on market conditions).