Medical school costs a pretty penny, and let’s face it, you’ll be in school for a while. According to the Association of American Medical Colleges, the average cost of tuition, fees and insurance for academic year 2018-19 for first-year, public non-resident students was $60,802, without living expenses.
And that’s just the first year.
It’s no wonder becoming a doctor easily means having more than six figures of debt. After taking advantage of all your federal student loan repayment options, you might need to take out additional private loans to cover the rest. Here are five options for private medical school loans to consider.
1. Sallie Mae® Medical School Loan
One option to consider is the Sallie Mae® Medical School Loan, which offers borrowers up to 100% coverage for their funding needs. There are variable and fixed rate options available, with a discount APR of 0.25% for using autopay. An advantage of this loan is it has a 20-year repayment term available, so you’ll have time to pay it all back. There are also no prepayment penalties.
You also have three repayment options while in school. You can either defer, pay $25 per month while in school or make interest-only payments while in school.
Sallie Mae® provides a generous three-year grace period and up to four years of deferment while you’re in a residency program.
This loan has no origination fee and offers cosigner release. It advertises that you could score a lower interest rate than a Direct Grad PLUS loan. However, federal loans offer protections such as income-driven repayment and student loan forgiveness that can be worth the cost.
The lender also offers a medical residency and relocation loan, to help cover costs associated with being in residency.
2. Discover Health Professions Loan
Discover also offers private medical school loans that cover 100% of educational costs and come with no fees. This means no application, origination or late fees. There are variable and fixed rate options available, with an autopay rate discount of 0.25%.
Discover offers an incentive of 1% cash back on the loan amount of each of your student loans when you get a GPA of 3.0 (valid one-time, reward redemption period has limits). For repayment, you can choose to defer or make payments while in school.
You may need a cosigner if you have little to no credit, and the minimum loan you can take out is $1,000. Discover also offers residency loans as well.
Though not officially available yet, CommonBond announced that it will launch no-cosigner private medical school loans. This could be one of the best loans for med school as there will be no cosigner required, and there will be benefits like forbearance and a six-month grace period.
Also, you’ll have the option to only pay $100 per month while you’re in residency. Talk to the lender directly to see if there are any qualifications for this benefit.
These perks are attractive and could be a good fit if you’re worried about paying back loans in residency or don’t have a cosigner.
4. Citizens Bank Student Loan™
Another option for medical school student loans is the Citizens Bank Student Loan™ for medical school. There are no application, origination or disbursement fees and you could qualify for up to 0.50% interest rate reduction. You can get a 0.25% loyalty discount if you already have an account with Citizens Bank and can get another 0.25% discount for signing up with autopay. There are also fixed and variable interest rates available.
You can also choose from 5-, 10- or 15-year repayment terms. If you have limited credit, having a cosigner may be in order. Luckily, they provide cosigner release after three years of positive repayment. You can borrow up to $350,000 for M.D. and other health profession degrees.
5. Wells Fargo MedCAP® Alternative Loan for Health Professionals
One of the best loans for med school is the Wells Fargo MedCAP® Alternative Loan for Health Professionals. This loan is available to most borrowers without a cosigner and comes with either variable or fixed interest rates. There’s a six-month grace period available, and you could score a 0.50% interest rate reduction. You can get a 0.25% rate discount if you sign up for autopay and have another 0.25% reduced if you’re a current Wells Fargo customer.
There are no origination fees, application fees or prepayment fees. Wells Fargo also offers the MedCAP-XTRA® loan, which is geared toward medical professionals in residency and can help cover costs associated with relocation, exams, etc.
What to consider before taking out private medical school loans
If you’re looking for the best loans for med school, these five options are a good start. However, there are important things to consider before taking out private medical school loans.
Private student loans don’t offer the same protections as federal student loans. You won’t have income-driven repayment, Public Service Loan Forgiveness, or any other type of student loan forgiveness.
Pursuing a Grad PLUS loan could be better. Depending on your credit, it may have a higher APR, but the benefits could be worthwhile. You will need to borrow a large sum of money for medical school, so having income-driven repayment could be a lifesaver in the future. You’ll also want to look into local, state or federal scholarships and grants to help fund medical school.
If you need medical school student loans, be sure to check out the interest rate, repayment term and monthly payments. Empower yourself with information and be an informed borrower, especially if you’re taking out six figures or more in student loans.
Need any help with next steps? Get in touch for a custom student loan plan.