[Editor’s Note 1/15/2018: The long-awaited White Coat Investor Online Course is live and is available for purchase here. The course is entitled: Fire Your Financial Advisor. No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums trying to gain a financial education the way the hobbyists do. This course will take you from feeling anxious and having no plan to having a written financial plan you can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school, or residency, but never was.]
Perhaps the worst part about being a high-income professional is beginning your career with a massive debt burden hanging over your head. Eliminating your educational debt at the beginning of your career will increase your happiness and speed your way to financial freedom, allowing you to take advantage of future opportunities, both professional and personal. En route to debt elimination, most professionals should take advantage of the ability to refinance your debt with a private company. It is usually a no-brainer, but there are a few things to know about it.
# 1 You Save a Ton of Interest
If you have $300,000 in student loans at an average rate of 7%, and refinance that to 2.5%, you will spend $13,500 less in interest in the first year alone. That is $13,500 that can go toward principle instead of interest. The same monthly payment that would pay off a 7% loan in 20 years pays off a 2.5% loan in less than 10 years. A 10 year loan becomes a 6 1/2 year loan. A 5 year loan goes away in less than 4.
# 2 You Get Cash Back Now
Do your student loans have you in a vice? Refinance them!
As if saving tens of thousands of dollars in interest isn’t enough, WCI has negotiated a special deal with each of the main refinancing companies for you as a little extra icing on the cake. When you refinance, you get some money back (and you help support this site.) If you’re smart, you’ll throw that at your loans too.
# 3 Refinancing Is Usually Quick and Easy
When these companies first showed up in 2013, there were lots of kinks to work out. Well, they’ve all been worked out. Now you can get a preliminary quote from most of them online in 5 minutes or less. If you have all your loan paperwork handy, you can usually upload it electronically in a few more minutes. Once you’ve gathered the paperwork to refinance with one, checking your rate on a couple of others is no big deal either (and I recommend you do so.) I don’t know how long it takes you to make $13,500, but I guarantee refinancing your loans will take less time, especially since it is all after-tax money.
# 4 You Get Better Service
No company is ever perfect, but compared to the service you were getting from your federal loan servicer, these guys might seem like it. You can get people on the phone, a functioning website, and can easily make extra payments to pay your loans off even faster.
# 5 Unless Qualifying for PSLF, Attendings Should Refinance Today
The only real caveat to refinancing for attendings is that you don’t want to refinance if you are going to try to qualify for Public Service Loan Forgiveness. If you made lots of tiny payments during your training, PSLF is going to work out a lot better for you than paying off your loans. Even if you’re worried the program will change and you won’t be grandfathered in, I still think you ought to stay in a government income driven repayment plan while saving up a side fund to throw at the loans, just in case. While in that unlikely scenario you would end up with a bunch of extra interest, I think the likelihood of you not being grandfathered in is a pretty low risk. Some docs worry they might need the income driven repayment program again in case something happens to their income. I think that’s silly. How many post-residency docs do you know who can’t get a job paying a lot more than they were paid as a resident? Yea, I don’t know any either. Others worry about what will happen if they die before the loans are paid off. However, these loans are still student loans, and still generally go away with your death (not even being assessed against your estate,) but read the fine print. Even if they didn’t, you can probably buy a $300K 5 year term life insurance policy for something like $137 a year, far less than you are saving in interest. But what about disability? Again, the companies generally offer some provision for this, but if not, you can buy a little extra disability insurance with all that interest you’re saving.
# 6 Residents Should Refinance Private Loans
Although residents can refinance their federal loans during residency (Laurel Road and LinkCapital are your main choices) they generally shouldn’t. The effective interest rate in the RePAYE program is usually lower than what you can expect as a resident. However, if you have some private loans that aren’t eligible for RePAYE, then refinance them now. These companies offer monthly payments of $0-100 as a resident and you can typically get a rate around 5.5%, which is often 1-3% lower than most private loans.
# 7 You Don’t Have To Refinance All Your Loans
Sometimes a doc has some of his loans at a really attractive interest rate. Maybe they are from a time when rates were lower, or they’re from the undergraduate years or whatever. You don’t have to include those when you refinance. Just leave out any loan with a rate less than what you’re being offered.
# 8 Consolidation and Refinancing Are Not the Same Thing
Financial terminology, like medical terminology, has a precise meaning. Sometimes docs get sloppy and say consolidate when they mean refinance. Consolidating is a process you go through with a federal lender where your loans are all bunched together into one easy payment. The issue, however, is that all of your loan interest rates are averaged (and rounded up to the nearest 1/8th percentage point) and that is the rate you pay. Refinance. Don’t consolidate.
# 9 You Have To Qualify
Unlike the federal government, which will loan you ghastly amounts of money just for having a pulse and getting into medical school, these are all for-profit companies that are making a bet that you will actually repay them. The worse of a bet that is, the less attractive terms they will offer you. In fact, there are some doctors who won’t be able to refinance at all. I’m talking about a pediatrician with terrible credit who owes $550,000. Obviously the orthopedist with a credit score of 810 who owes $150K is a much better bet.
# 10 Variable, Short Term Loans Are the Best Deal
If you want the lowest rate possible (sub 3%) that means you’re going to have to commit to a 5 year term and run the interest rate risk yourself. That means if interest rates go up dramatically soon, you may end up paying more in interest than if you had taken a fixed rate loan. However, I think that’s a risk worth running for anyone willing to commit to living like a resident for 2-5 years until the loans are gone. If rates only rise a little, or rise slowly, or don’t rise for a few years (or at all) you’re going to come out ahead. Once you run the numbers on just how much and how quickly rates have to rise for you to lose this bet, you will likely be much more comfortable with it. Also if you’re committed to living like a resident and getting out of debt quickly, you likely have A LOT of slack in your budget and can easily cover the worst case scenario. Plus, you now have a little more motivation to live efficiently and get out of debt. A variable rate loan not only gives you a mathematical tailwind to speed you to financial independence, but a behavioral one as well.
# 11 Refinancing Doesn’t Eliminate Your Debt
While I can understand if you shift your financial priorities a little after refinancing from 7% to 3% (perhaps maxing out retirement accounts before paying extra on the loans) don’t fall into the trap of thinking you’ve actually done something about your debt just because you refinanced. That is just the first step. The problem isn’t the $13,500 in interest you’re accumulating each year, it’s the darn $300,000 you’re going to have to pay off eventually. The way you kill your debt is by throwing $5,000, $10,000, even $15,000 a month at your loans.
# 12 You Can Refinance Multiple Times
Perhaps you didn’t get the best rate when you refinanced due to your credit score. Or perhaps interest rates have dropped. Or now you qualify for a 5 year term or I’ve talked you into changing to a variable rate loan. There is absolutely nothing stopping you from refinancing again. In fact, it’s probably a lot easier since you now only have one loan to enter the information for. And yes, you (and I) get the bonus money every time you do it. In fact, probably even the refinancing companies like it when you do this. They’ve already sold your previous loan off to investors. Doing it all again means more business for them.
Get off your duff and refinance your student loans already! Then get busy paying them off and get your net worth back to broke!
When is the last time rates dropped significantly? I refinanced to a variable 5 year plan about 1.5 years ago. Credit score is excellent. Current rate is around 2.7 or 2.8% now. Anyone hear of any better rates out there?
I get rate updates emailed to me periodically from these companies. The most recent one was from SoFi. Variable rates were 2.345-6.270% with autopay as of January 4. Fixed rates were 3.38-6.74% with autopay. Wide range I know, but the better your credit, the better your debt to income ratio, and the shorter the term, the better rate you’re going to get. But it’s almost always better than what you have.
I looked back at my statement and my rate is actually at 2.5% now. I just sent my first extra payment of $40,000 this week (been saving up from moonlighting) which will bring my total to just under $100,000 (started at $210k 2.5 years ago). Very exciting, and in large part due to the motivation I get from this website! With that in mind, I’m not going to worry about a small difference in interest rates now since I hope to have the rest of my loans paid off by the end of this year!
You’re doing great. Keep it up!
Hey Luis,
Who did you go through to get the 2.5% interest rate? One of the companies mentioned in this article or a private lender?
Thanks!
I have a loan question that I tried digging and could not get a good answer about despite hunting around online. I have about 110k in med school loans left and I work for a nonprofit hospital. My loans are are all Sallie Mae consolidation loans serviced through Navient at pretty low rates (2.125%). I’ve been paying them off for 10 years and have about 16 years left on them. (Yes I could pay them off quicker but I’m more liquid and making more money by investing). Am I eligible for the PSLF? If I go with a direct loan would I lose my interest rate?
Sounds like you may be eligible, but not enough info to be sure. You may have to go back and certify for each of the last 10 years to get it. You don’t mention what program you’re making payments on but IBR, PAYE, and REPAYE as well as the standard 10 year payment all count toward PSLF if they’re made while you’re working for a non-profit hospital. If you need some professional help, you can check with these guys:
https://www.whitecoatinvestor.com/student-loan-advice/
I would reach out to Jan Miller. If you go to his website, you can schedule a phone call with him. He will chat with you at no cost for 30 minutes. From there, if you feel you need his services, you can potentially hire him but he will be able to answer your question.
Jan and I have no financial relationship but clients have had good interactions with him.
Only Direct Loans are eligible for PSLF. Please verify loan type at http://www.nslds.ed.gov. If you consolidate via Direct Consolidation Loan you will reset the PSLF clock to zero. And the consolidated interest will be the weighted average of the loans being consolidated rounded up to the nearest 1/8 of 1%.
@Mohamed, based on the info you put in “I’ve been paying for 10 years and have about 16 left” as well as your rates it looks like you consolidated and are making payments on a 25 year loan. If that is the case you would not qualify for PSLF because you have to be on one of the Federal Income Driven Repayment plans. At 2.125% you probably should pay them off as slowly as you can because you can make more with limited risk by investing.
When you apply, do you get all of the rates for the different length and fixed vs variable? I.e. If I applied to DRB, will they send me the interest rates for 5, 10, and 20 year loans? I ask because I’m taking my excess income and putting roughly 50% towards loans and 50% towards a home down payment as my wife and I are moving. After a few months, I think we have enough for a decent down payment, but I’d still like to have some flexibility in payments. I’m doing IBR now and just throwing extra money at them but am in a rush to get that interest rate down. Is this a good reason to go with Earnest?
They may not qualify you for every loan length (or any loan at all), and the rates offered to you will be different from those offered to someone else.
Earnest and DRB have a few differences, but both have some positive unique features.
It might just because I’m old, but back when I was refinancing/consolidating people told me to stay away from the Private Lenders since if you died whiel in repayment the debt doesn’t die with you (like the Federal programs do).
Is this still the case? I know we’d prefer to pay these off in a few years, but its possible that doesn’t work out.
It varies so you have to read the fine print for any given lender. Worst case scenario the debt is assessed against your estate before your heirs get their piece.
Have you refinanced your loans? Not yet. I’ve been rejected by the three companies that refinance with residents. Very poor offers, about 0.5% less in interest but with five year repayment plans. I have 1.5 years left in my primary care residency.
205,000 in loan debt. 55,000 in ROTH retirement funds. ~4,500 in emergency fund checking account.
How many times? Several times.
How quickly did you (or do you plan to) pay off your student loans? I was going to pay off my loans in three years. They’d have grown to roughly 210,000 by the end of my residency, I’ll make about 145,000 net even while contributing about 40k a year to retirement funds. Since I live like a hobo it’ll be easy to pay off in three years. The only trouble is that they may not think that I can pay it off that quickly since most young doctors tend to spend a LOT more than me.
I really wish I had not put about 15,000 toward loans in medical school when I got some family money. Right now PSLF wouldn’t help me that much but it still would have been better to take that money and invest it. My plan was still to refinance quickly since I already have 15,000 of “chips” towards the “refinance” part of the playing table.
The biggest contribution you can make to your financial well-being in medical school and residency is to live frugally and minimize your debts. Repayments are best handled as an attending. Liquidity is important when money is hard to come by.
This went against my natural inclination of immediately putting extra money toward my loans. In residency $10,000 would have represented over a year of frugal living and savings. When I became an attending I would routinely make $10,000 payments without blinking an eye. The amount of interest I would have saved saved by an extra payment in residency were worth a couple of days of work as an attending.
Excellent comment. I have a post coming up soon reflecting similar ideas.
Let us know when it becomes available! I am in a similar position -5 months from the end of my residency, have a contract in hand for $330k/yr, $250k in debt but So-Fi would not accept it until I am an attending. I’m cringing with the 6.8% interest that I’m just sitting on in the meantime. A friend in nearly the exact same position as me got a 2.9% fixed rate from So-Fi..
Here it is: https://www.whitecoatinvestor.com/moderation-in-all-things/
Just curious how they were able to get a sub-3% fixed when all advertised rates are: “Fixed 3.375% and variable rates start as low as 2.565% APR (with AutoPay)”? (This is copied from SoFi). I am in similar situation and have not seen rates any better elsewhere either (looking at all big names WCI recs). Anyone else finding rates better than this? Thx!
Rates have crept up a bit in the last year or so.
I’ve brought up this topic with a lot of young dentists over the past few years during which time I have observed an unexpected, yet consistent, reaction when I suggest refinancing.
Rather than jumping up and hugging me for introducing them to this financially wise and debt reducing strategy, they often balk, look at me blankly and then say something like, “Won’t that raise my monthly payment…like…a lot?”
As the size of their loan burden increases (see the Dave Ramsey video WCI posted in the Maximum Student Loan Debt to Salary Ratio post) their initial reaction to refinancing actually causes them to turtle back into their denial shell because the monthly payment on a $400K loan at 3.5% is almost $7300. While that is undeniably awesome to anyone reading this blog, the average new dentist is horrified by that number.
THE POINT IS: I have found better success in encouraging them to refi at least a portion of their loans and/or refinancing different amounts over different terms. “If the thought of doing it all at 5 year variable is to overwhelming, let’s have you do $200K on a 5 year and the other $200K at a 10 year fixed. Then in 5 years you can refi again and demolish the remainder”.
I have found better success with that model, especially the last 12 months and have happily referred them here to read and learn more.
Thanks again WCI for all you do. This is another valuable (and I hope profitable) post. My work satisfaction has gone up significantly since paying off my dental school loans and I have the logic and persuasiveness of this blog to thank for the speed and prejudice I disposed of them with.
*Edit: The monthly payment on a $400K loan at 5 years and 3.5% = $7300…..I left out the 5 year part in the comment above.
Great idea!
Has anyone had luck refinancing to a shorter loan term–say a 10 year loan to a 5 year loan–with the same company with a lower interest rate? I have read anecdotes of Sofi doing it. It would simplify things, but my guses is that I won’t get another referral bonus like I would if I just went from, say, Sofi to Earnest.
My understanding is you will get another bonus. But if one company won’t offer it, just go to another. Plenty of options and easy to check how much you’ll save.
Are Variable loans more risky now that the Fed has increased interest rates and is planning on increasing them 2-3 more times this year? Also, since it seems like the economy has a brighter outlook since Trump was elected does that mean higher interest rates? I just refinanced at a 3.52 variable…
I have no idea what interest rates will do. But if you’re committed to paying off your loans in 5 years after training, I think you can afford to run the interest rate risk yourself. Remember for you to come out behind rates must rise substantially and early in the loan. You’re going to save something like 1% going variable. So if rates only rise 2% over the 5 years you have the loan, you’re probably going to come out ahead variable (since by the time the rate is more than 1% greater you’ll have a much smaller loan balance.) If it rises 2% this year, you’ll probably come out behind. There’s some risk there, so look at the worst case scenario.
Even if rates jump, I can still refinance again if needed right?
Yes, but it might be at a higher rate.
I had the same question. My friend who is a PT sent me this link which helped me answer the question about variable rate loans. http://fitbuxarticles.fitbux.com/debt/4-easy-steps-variable-rate-student-loan/
Not sure that article is applicable to most on this site. For instance, it suggests you shouldn’t use a variable rate loan if your balance is over $5K. While size of loan probably should affect that decision, the cut off ought to be in the hundreds of thousands, not the thousands.
The balance of the loan is the last risk factor. Before that is the loan term. The balance of the loan only applies if the other risk factors before it are moderate to high risk. Therefore if you plan on paying off the loan in 4 or 5 years or less the balance doesn’t matter. If you are going to spend ten years plus paying it off then it’s higher risk and you have to look at the balance of the loan to help hedge that risk.
Late last year, I married a 4th year med student with ~$96K in unsubsidized Stafford loans at ~6% and $5K remaining on a .9% car loan. Since she is still a few months from graduating, she hasn’t had to begin repayment on the student debt. My 2016 income was ~$180K and I saved about $54K into a taxable Vanguard account after my $18K into 401k, $5.5K into Backdoor Roth IRA, $3K into HSA, and $5.5K into spousal Roth IRA.
What do you recommend we do about the student loan debt? I think my options are:
A) Do nothing, since it is “her” debt.
B) Pay off the ~9 notes individually as quickly as we can with money that otherwise would have been allocated to the taxable investment account over the course of the next 2 years.
C) Sell taxable investments to pay off the student loan debt immediately. I do have ~$9K in TLH reserves to blunt the realized gains. I have approximately $160K invested primarily in US Total stock and Total International, which is about 80% basis.
D) Refinance with DRB or LinkCapital and then pay them off during residency. Would I need to cosign on the refinance to meaningfully reduce the interest rate or otherwise make it go through at all?
Thanks!
Sorry, forgot to add: Should Repaye be part of the option mix? We are planning on paying back the money rather than get it forgiven.
Thanks!
Doesn’t sound to me like REPAYE will help you guys at all. If you were going to try for PSLF you could do the PAYE and MFS thing.
I think I’d choose B in your situation. Reasonable people may have different opinions.
You are asking a very loaded question that tends to get heated when discussed. There are two schools of thought on the subject:
B) You are now a family and you should start paying down all debt together as a family. Max out retirement accounts first and then attack the debt your option B
A) You just got married, who knows if it will last, let her debt stay her debt at least until she graduates and can afford to pay it on her own. I have seen more often than I can count someone paying down their spouses debt only to get divorced shortly after and have nothing to show for it. Your option A
Personally I would choose option A because residency is tough on both partners and many divorces occur during residency.
Very nice article. I think refinancing is a very important option, but I would assume that there are some downsides associated with refinancing with a private company and this article doesn’t mention any (which I find hard to believe). Does anyone know if these companies discharge debt if one becomes disabled? Do they continue to hound family members for repayment if you suddenly pass away? Federal loans are usually forgiven if you develop significant disability or die. Not that I anticipate these things happening to me, but life certainly happens, and I would hate to saddle my family with a significant loan burden because I refinanced with a private company.
The downsides are:
1) You are no longer eligible for IBR, PAYE, REPAYE, PSLF etc. (which the article mentioned under # 5)
2) Death/disability provisions may be different (which the article mentioned under # 5)
If you’re really worried about your student loans being assessed against your estate in the event of your death, then buy a little extra life insurance. It will be dramatically cheaper than paying a higher interest rate.
Hi,
I’m a family medicine physician who completed residency June 2016 and I’m trying to make the big PSLF vs refinance decision. I work for a non-profit. My situation has one unique factor – state loan repayment. I have direct stafford loans totaling $229,071.58 at 6.55% interest and direct grad plus loans totaling $89,417.84 at 7.65% interest. Total student debt: $318,489.42. I am set to receive $100,000 of non-taxed loan repayment from the state of Montana over the next five years according to the following schedule: March 2017: $5000, Sept 2017: $5000, March 2018: $7500, Sept 2018: $7500, March 2019: $10,000, Sept 2019: $10,000, March 2020: $12,500, Sept 2020: $12,500, March 2021: 15,000, Sept 2021: $15,000.
I am also receiving taxable “bonuses” from my employer intended for loan repayment (though can be used however I choose) as follows:
Sept 2017: $10,000, Sept 2018 $5000. If my loans are not relayed by September 2022, I will also receive the following taxable loan repayment from my employer: Sept 2022: $15,000, Sept 2023: $15,000, Sept 2024: $15,000.
I am on salary of $220,000/year.
– I’m a little nervous about PSLF because I can’t imagine it being sustainable (think about how many physicians, lawyers, etc. will try to utilize this program. At some point it will cost too much).
– I already have 3 years of payments that would qualify for PSLF under my belt, so would need an additional 7 years.
– It would take 5 years to take full advantage of my state loan repayment.
– I would feel bad if the state wasted $100,000 toward my loans if I just end up getting them forgiven anyway. (But this doesn’t really enter the decision making process).
Thoughts??
Go for PSLF but set up a side fund. The bonuses go in the side fund obviously. Run the numbers though. I guess it’s possible that with the state paying so much there won’t be anything left to be forgiven if you are also making full payments.
Thanks. I’ve been loving the blog and appreciating the crash course in personal finance. As with most things, the more I learn, the more I realize how little I know! Regarding the side fund in case PSLF falls through, would you recommend just using a personal investment account with Vanguard? Real estate crowd-funding? Something else? A combo? I know they’re taxable, but if I needed this side fund, it would be in 7 years so I would need to have a relatively short term investment. Thanks!.
I’d stick with more liquid investments- not real estate. I think something like a balanced mix of stock and bond index funds would be reasonable.
Hi,
I currently have about $250,000 in debt with FedLoans. I decided on a job that isn’t eligible for PSLF so I’m refinancing. Currently the best rate I’ve been offered is from a credit union through Lend Key (2.21% on 5 yr variable) but the max is $170,000. Next best is 2.63% from College Ave thru Credible on $250,000. I’m waiting to hear from Earnest but their stated range is 2.34-3.76% so Lend Key would still win. Should I refinance $170,000 of the debt with Lend Key and then refinance the rest with another company? Common sense says “yes” but I’m wondering if that is allowed. Or if it might be more trouble than its worth down the line. This is all new to me so appreciate any insight!
Thanks,
Jennifer
0.42% of 170,000 is about $60 per month. Is that (the opportunity cost) worth the simplicity of having it all in one place for you? I’m assuming you can divide it up.
I think I’d try to do that. Why not try?
I am in my third year of residency. I have been on the PSLF program throughout residency, my hospital is a 501c3 program. Doing the rePAYE program on my federal student loans.
I just signed a contract in private practice, so obviously won’t be eligible for the PSLF. What should I do with the loans then? If I refinance them, does that forever disqualify me from PSLF if I were to work at a 501c3 later in life. From what I understand the payments are cumulative 120. However, I’m worried that my payments are going to shoot up to 5k/month and if I refinance them then I am SOL. Or, even though not working at 501c3, will I always be on some type of income based repayment plan?
Love the blog!
Refinance them and live like a resident for 2-5 years to pay them off.
Yes.
Yes, your required payments will “shoot up.” But they will shoot up whether or not you refinance. Focus on the interest savings. If you’re super worried about a higher payment put some of your loans on a 5 year refinance and some on a 10 year refinance.
I have 343k in consolidated direct loans @ 6.8% (324k in principal and the remainder in accrued interest), and private loans: 10,000 currently deferred (0% interest in training), and $2500 @ 4.5%. I have been on IBR throughout my residency/fellowship, however, I am going into PP and will not be working for non-profit. So PSLF is off the table.
A couple years ago my federal loans became serviced by Navient, which has been terrible. Navient’s incompetence has made me want to refinance even if it was at the same rate, just to get away from them.
Regardless, I did some calculations and found that for the remainder of my fellowship (ends in June), I would save money on interest by switching to RePAYE (vs staying in IBR, even accounting for the fact that interest will capitalize when the switch is made). So I have submitted the application to switch from IBR to RePAYE.
My plan is to stay in RePAYE until the end of my fellowship and then refinance as an attending. I have a signed contract with take home pay ~20k/month. I currently have 70k cash in the bank.
My goal is to pay off all loans and be completely debt free in 2 years after starting practice. When one refinances, would keeping that cash in the bank give me a better success rate for refinancing and possibly lower rate? Or would you recommend paying off as much of the loan as possible ASAP? How much cash would you keep for an emergency fund?
Would any of the banks consider refinancing me now, using my contract as proof of income? Ideally, I’d want to be getting into something like a 2.5% variable rate. Thanks!
I don’t know for sure, but I don’t think it’ll matter much. I’d probably just keep a small emergency fund in the bank and throw the rest at the loans. How small? Big enough that you don’t lie awake worrying about it and at least $1000 but no more than 3 months expenses.
Yes, some would refinance you, but the closer you get to actually earning money, the better the rate gets. But you could refinance now and then do it again.
As my financial literacy has progressed throughout the past few years, I realize how unintelligent it has been to defer my loans throughout residency (recommendation from older residents when I started, awesome). I am now in my last year of orthopaedic surgery residency (PGY5) and doing a fellowship next year (spine).
I initially intended to go into private practice, but for better or for worse now seem to be headed toward an academic career. My understanding is I would not qualify for either IBR/PAYE with an expected attending salary in the 400k range. Even if I did, does the math make sense for PSLF to be beneficial with 10 years of attending salary (which should have been 5 years if I would have paid all along during residency)?
I have roughly 250k in Stafford Loans at 6.8% and another 40k in an interest free loan from a family member. My plan was to refinance with DRB as soon as I have a signed contract, but wanted to confirm that was the best option.
No, if you haven’t been making IBR/PAYE/RePAYE payments during residency, there probably won’t be anything left to forgive after 10 years of attending-level payments. You still have the fellowship year and the rest of this year, but I think I’d just pay them off. I mean, you’re looking at a $400K salary in academia and probably twice that in private practice. You only have $290K in loans. I think I could pay off $290K in student loans on a $400K salary in 18-24 months. $100K to taxes, $50K to retirement, $50K to live on, $200K toward the loans. 2 years out of fellowship, you’re living the good life.
How about this scenario but with 5 years of attending payments? With thenr cent talk of putting PSLF on the chopping block, and government volatility, I am really worried about PSLF staying until 2023.
I can’t tell what you’re asking. But just refinancing your loans and paying them off is an option if you’re worried the government is going to pull the rug out from under you. But you can hedge your bets by staying in IDR/PSLF programs and saving up a side account to pay off the loans if PSLF goes away.
Thanks for the reply and apologies for being unclear. Typing coherently on a cell phone early in the morning is not my strength. You pretty much answered my question anyway!
I will say after looking into IDR plans and PSLF on studentaid.ed.gov (and based on a loan balance of 250k and annual salary of 400k in the scenario above) it would appear that the IDR payment would actually be higher than a standard 10 year monthly payment (~$2800). This means that such a salary would disqualify the borrower from an IDR plan and subsequently, making PSLF eligible payments. The rule of thumb to qualify seems to be an annual salary below the total loan amount.
I don’t think you get it. PSLF is all about the tiny payments made during training. If you didn’t make tiny payments as a resident/fellow, there won’t be anything left to forgive after 10 years of “attending-level” payments. Unless you’re making $150K and owe $500K or some terrible DTI Ratio like that.
Quick Question: As an OMS resident, I’m in both the resident and medical student categories. What that meant for me when looking at refinancing versus REPAYE program was that they wouldn’t allow me to do REPAYE because I’m still a student, but was eligible to refinance with DRB as a resident on dental school and medical school loans. I have 6 years of residency, but I’ll be paying medical tuition for 3 of those – should I just take the hit on interest for the first 3 years and then try for REPAYE or go ahead and refinance to a variable rate (lower than the fixed rate)?
OMFS is tough. Some of the largest loans I’ve seen. I don’t think taking a variable rate when you’re still in school is a very good idea. It’s one thing if you have an attending income and will be rid of them in 2-3 years. Totally different when you’re still in school and may have those loans for another decade.
Thanks for such a quick reply. The fixed refinance rate (5.65%) wasn’t a whole lot better than my current average rate of loans (6.09%) and 2 loans of mine are 5.31% and 5.41%, so I don’t think sticking those in the pot to refinance. Even changing to a fixed rate, I’m torn between refinancing now and then refinancing later versus letting everything go until I’m PGY-4 and no longer a student and comparing rates between refinancing and RePAYE. Thoughts?
I don’t think I’d leave the government programs for 0.44%.
WCI, thanks for all of your help.
So I don’t think I really understood IBR coming out of medical school. Upon graduation, I signed up for the 10 year graduated pay off plan for my federal loans. I started out with about 100k in federal loans. Early on I was able to pay off the interest before it capitalized and made a couple of larger payments. Since going into repayment, I have made regular monthly payments and I just completed a 4 year residency in June 2016. I am now working at a 501(c)3. I have about 67k left in federal loans at 6.55% through fedloan. I also have a private institutional loan of 10k at 7% and a perkins loan of 4k at 5%. I am planning to aggressively pay off my loans and have a goal to get rid of them in under 2 years. Because I am at a 501(c)3, am I still eligible to go into IBR for the fed loans? Would my previous 4 years of payment apply so that I would only have 6 years left? Or would it start over at 10 years? Or would I be better served just to refinance all my loans down to 3ish percent and just pay aggressively? Thanks
If you’re to pay your loans off and not go for PSLF (and I’m not sure you’re going to have anything left to forgive after 120 qualifying payments) then yes, refinance and get rid of them.
Hello. Thank you for this wonderful site. I am currently a resident on HPSP and all my loans are capped at 4.5%(from undergrad)… do you really believe that refinancing may still be worth it?
Thanks again!
As an HPSP student, you may wish to do Public Service Loan Forgiveness since you’ll be working for the federal government for at least 4 years after residency. You’d have to run the numbers to be sure, but don’t refinance loans that will be forgiven.
Thank you for the reply. Unfortunately(or fortunately?), I did the quick math and none of my loans at my current monthly payments x 120 months would still have any balance left by the end( I only have a total of about 26,000).
also, looking back, some of my loans are 5.75%, lowest is 3.5%… so may be worth it to refinance. Would you agree? I followed your link for Credible and I will be finishing it when I get home today.
Hi all,
Quick question about what to do during residency. I’m about to graduate medical school and am currently 239k in debt with fed loans at 5.72%.
I was planning on signing up for PSLF by default right after graduation with PAYE but still would like to contribute more towards my loans to avoid taking on 80-90k of accrued interest during residency. I would also like to max out a Roth IRA.
My plan was to at least pay down the accrued interest every year during residency and max out the Roth.
Assuming biweekly pay at $50,500 a year, after taxes, paying down the accrued interest, and maxing out the Roth, I would be left with about $830 in my bank account every two weeks.
1. Does this sound reasonable? Is it worth making these larger payments now instead of making smaller payments now and just knock the difference out as an attending with a few days of work, as mentioned above?
2. Also, just for sake of clarification, most residents should not refinance their student loans at the beginning of residency, correct?
Listen to what you’re saying. You’re saying you’re going to try to get your loans forgiven but you want to avoid the interest piling up. Does that make sense to you? It doesn’t make sense to me.
As a general rule, you pay your loans off as an attending, not a resident. When you figure out your first attending job, then you decide between refinancing and paying them off ASAP, or going for PSLF. But until you’re sure you’re not going for PSLF, I see little benefit in paying down your loans. Might as well pay the money into a side investing account. You can always take it and throw it at the loans when you decide to pay them off.
The general rule is REPAYE in residency, certify for PSLF each year, save what you can without feeling impoverished mostly in Roth accounts but be sure to get any match, and refinance upon leaving residency if you’re not going for PSLF.
Thank you!
When doing refi for my wife and it asks for income. Am i able to put our total income, since she does not have an income.
If you’re co-signing, yes. If not, then no. Careful with co-signing. If you co-sign and heaven forbid she die, you’re on the hook for loans that otherwise would have been forgiven.
When you apply, most banks and lenders will look at your credit score, annual income, savings, and college degree type (or certificate of enrollment if still in school). If you meet these requirements, you might be an excellent candidate for student loan refinancing and consolidation! If you don’t think you meet the requirements, don’t worry – as you can apply with a cosigner to increase your chances of getting approved for a better student loan.
Hello,
My situation is as follows through FedLoan:
Direct Sub Consolidation Loan $52,047 @ 6.25%
Direct UnSub Consolidation loan $67,405 @ 6.25%
Total $119,452
I’m a fellow who is graduating in June 2018. I’m enrolled in PSLF and have made 24 qualified payments. I was on IBR but just switched to REPAYE. I’m using my tax return to qualify for my REPAYE and I’ve been using the year prior.
2015 AGI was $70k (Resident)
2016 AGI was 122,507 (Fellow)
2017 AGI should be 150k (Attending)
2018 AGI should be 230k (Attending)
2019 etc over 250k
1) Can I switch back to IBR before I graduate and my income goes up? This would achieve my payments being capped, as REPAYE will not cap payments in regard to your income.
2) Is staying with PSLF even worth it? Should I just refinance and pay off my student loans by myself?
Thank you
1) Yes. Most people do it after graduation though as there is a bit of a lag in the increase in payments. IBR is only preferable if you don’t qualify for PAYE.
2) $119K? And only 24 months of payments during residency and fellowship. I’d give serious consideration to just refinancing them and paying them off within the first year out of fellowship. There’s not going to be a lot to forgive.
Why is PAYE preferable over IBR? Thank you!
Also, Wont I be kicked out of PAYE or IBR when my income is above a certain level and I’ll only have the option to use ICRP (which is a much higher payment since no cap)?
No. You’re never kicked out. Your payments just become equal to the 10 year standard plan payments.
With PAYE you pay 10% of discretionary income and get taxable forgiveness in 20 years. With IBR you pay 15% of discretionary income and get taxable forgiveness in 25 years.
What happens in the following scenario?
1) Accumulate $150k in federal student loan debt all before getting married
2) Get married
3) Refinance all loans with a private company like Sofi after getting married. Spouse is not a cosigner.
Is your spouse now responsible for these privately refinanced loans if you die since you refinanced after getting married?
No.
I have two loans with different lenders. Can I refinance two of my loans separately to get that $300 from Sofi? Or use two different companies each one with a different loan so i can get the $300 for using them?
Thank you
I suppose you could. Never really thought about that. But it kind of defeats the purpose for you of simplifying things. Plus one loan is probably going to be at a higher rate than the other and it wouldn’t take long for that higher rate to eat up the additional bonus. Besides, if everyone started doing that they’d have to cut the bonus (and my payment per loan refinanced).
I need some wisdom from people wiser than I am.
I graduated emergency medicine June 2016, and am now about to finish my first year of critical care fellowship. I have another 16-ish months to go (June 2018 I’ll be done). I occasionally moonlight for $150-220 an hour but don’t really have the opportunity because of work hour restrictions — and honestly, I’m getting burnt out because I work so much in the unit to begin with. I just paid some debt with my last paycheck.
My loan status is this:
$250,000 at 6.8% fed loan (forbearance)
$11,500 at 7.8% fed loan (forebearance)
$25,500 at 10.9% residency relocation loan (<–should never have done this) ($250/mo, barely makes a dent b/c of interest)
I just realized that I can refinance as a fellow and pay only $100 a month through DRB or LinkCapital, and I've got a prelim variable rate for 4.5% or fixed 5.5% from DRB.
I didn't do IBR or PAYE as a resident because I was trying to build up a rainy day fund (esp because I have a house) and for the same reason I don't want to do REPAYE, because I don't want to make the larger payments now since money is still tight (because surely they will take my attending moonlighting money into account). My plan is to dump $10-15k+/mo towards my loans when I finish.
I would like to refinance to a lower rate though to avoid continuing to accrue $1300/mo in interest, and if possible I would like to try an refinance that stupid sallie mae loan.
So two questions:
1) Variable or fixed interest rate when they're only 1% away from each other and I don't plan on holding onto my loans for very long? Lets say I get rid of them in 3 years? How much more did I pay? I'm worried about the variable rate because the fed is talking about raising interest rates already.
2) Any slick moves to get a good rate at a similar monthly payment for the sallie mae loan? Since its value is decreasing each month–even though by very little–I feel i might just want to throw my next wad of cash at this loan and just let it be in the meantime? I can't afford to lock myself into a higher payment if I'm not consistently moonlighting (which I'm not, and can't, because of work hours)
Okay. So sounds like PSLF is out the window. That makes this all pretty easy. I’d try to refinance it all with DRB. Hopefully they’ll refinance you. The rate will probably be in the 5.5% range. When you become an attending, refinance again. If you truly do throw $10-15K a month at it, you’ll be done in a couple of years.
I don’t know if they do variable for residents. But as an attending? Sure, go variable. If rates jump dramatically early in the loan you might have to pay an extra month or something. The risk is really low with your plan.
If you can’t refinance, that 10.9% loan is a very attractive guaranteed return “investment.” I’d be throwing everything I could at that, including my emergency fund.
By the way, do you have any significant home equity? You might be able to do a HELOC or refinance and roll some of that high interest student loan debt into a low interest mortgage loan.
Just wanted to chime in and share some new (for me) insight with student loan refi. Not sure if this is obvious to others or its been mentioned in this blog but i recently student loan refi’ed via x (mentioning wci got me $300 via paypal btw, thanks!). Part of the refi involved federal consolidated loan. Some portions were high >6% and some were low <3%.
Opted for 5 year fixed and at the time, the best rate was 3.8% so naturally, only refi'ed the higher portions.
Loan just disbursed. Logged into my original student loan account and its reading "paid ahead," most of them til 2027! I originally budgeted thinking i needed to continue monthly payments on the remainder balance but seems like ill have more cash flow than i originally anticipated and will work to to knock off higher rate loans. I think what may have happened was when loan disbursed, even though only parts of the consolidated loans were meant to be repaid, it was registered as early repayments to the entire loan.
I will continue to pay interest accrued on these accounts so it doesnt capitalize but happy at the unexpected increase in cash flow and thought other noobies like myself would also enjoy "unintended(?)" advantages of student loan refi!
Anyone else experience something similar?
You’re the second one I’ve heard mention it. The other person also only refinanced some of their loans.
If you refied your loan and you have a paid ahead account the refinance was most likely not done correctly. The balance on the higher interest rate loans (your 6%) should be zero. If they are classified as paid ahead then in the long-run you save $0 by refinancing because the money is applied to future payments and interest continues to accrue. If this is what happened, this is not an advantage to you and I highly recommend working with someone that knows student loans to see how the payments are being applied.
In short, since the payments are applied to future installments, the principal balance actually does not decrease until the future which you don’t want. You want it decreased today. Here is a video that describes paid ahead. When watching the video, instead of thinking that you refinanced, think about it like you made one big prepayment. https://www.youtube.com/watch?v=KheX1qtxRKc
Hi These posts are very helpful for me.
I’m a general dentist, 3 years out of school, still on federal loans ranging 5-8.25% $411k.
I live in Las Vegas, and most of the lenders mentioned here will not lend in Vegas. I was quoted by DRB for 5.85%.
Any clue why it’s so high? More importantly, what can I do to get a lower rate?
Thanks for any feedback.
It’s probably less your location and more a combination of your credit score, debt to income ratio, and terms of the loan. $411K is a lot of student loan debt. If you have the average dentist income of something ~$150K, you’re not as good a bet for these companies as a plastic surgeon making $600K with $200K in student loans. Also, if you qualify, a 5 year variable loan has a lot lower rate than a 15 year fixed loan. As you pay down your debt and boost your income and improve your credit score, keep checking back with the companies. You may find you qualify for a lower rate soon even if you don’t now.
Thanks WCI, I understand the ratio is high.
I am averaging $150k a year and seems stable for the near future, likely with slow increases. maybe 10-15k a year.
The 5.85% was 15 year fixed like you said, pretty impressive lol.
The other option is 4.66% variable.
With our first baby on the way, I anticipate expenses there. Otherwise, we try and keep our expenses to a minimum, renting for $750 a month 🙂 2 owned cars. Wife in grad school works part time $25k a year will take maternity leave in May(unpaid bc part time).
We are also considering buying a house, $300k range.
1. I read your opinion on variable. Would you choose variable in my shoes?
2. how would you approach buying a house vs renting? If we don’t buy I’ll need to rent a house $1500 for community reasons(hard to explain and don’t see relevance of details ;).
Thanks so much
You’re in a really tough spot with your DTI ratio. I think a $300K (2X income) mortgage is right on the border for you especially with a nearly 3X student loan. Have you seen this post: https://www.whitecoatinvestor.com/what-to-do-if-you-have-monster-debt/
I’d be pretty careful with variable if you can’t pay off the debt in 5 years. I suspect you may not be able to pull that off, especially if you buy that house, unless you figure out a way to really get your income up.
I’d drag my feet on getting that house. That Dave Ramsey video at that link could have been you guys. Almost the same situation.
Yea I see what you mean about the DTI ratio. I’m locking in 5.85% and going to pay back much I can.
Re the house, I want more clarity. If my mortgage rate is similiar to renting, the support for buying I’ve heard is I am putting money into ownership, as opposed to nothing I see from my payments when renting(is it capital??). How would you address that?
Not sure what you mean your mortgage and rent “rate”. There is no “rate” with a rent payment. I assume you mean your mortgage payment. Remember that mortgage payments SHOULD be much less than the rent on a similar place. Think about a real estate investor. He buys a house to rent out. What is on the income side of the ledger? Rent. That’s it. What’s on the expense side? Mortgage principal. Mortgage interest. Property taxes. Insurance. Maintenance. Upgrades. Transaction fees for buying/selling. Lawn care. Snow removal. Equipment etc. And what does he hope? Well, he hopes that after paying all those expenses there is still some significant profit left over. So rent SHOULD BE much less than just the mortgage payment, right?
It’s the classic argument realtors and lenders make- “you’re just throwing away money when you rent.” Well, you’re “throwing away” a lot of money when you buy too. Realtor fees, closing costs, mortgage interest, property taxes etc. Only the mortgage principal payment goes toward building wealth. I mean, you get a few tax breaks and if you hold long enough you should have some appreciation. But the rent vs buy issue is a lot more complicated than you seem to think it is. If you buy too soon in your financial journey or you buy too much, that house ceases to be a blessing and becomes a curse. At the right time and in the right situation, buying makes a ton of sense. Makes sure you’re at that time and situation before you do it. Given your student loan DTI ratio, I would argue there’s a very good chance that time isn’t now, especially if you’re looking at a home that is much nicer than what you would be willing to rent for a couple of years.
I read a lot of personal finance stuff when I was a PGY-1 back in 2006. Ah, the good old days of 0% Balance Transfers with no fees before the recession (at one point I had borrowed $90,000 at 0% and had it sitting in an FDIC insured money market account earning 6% interest…oh sweet arbitrage!). Anyway, haven’t read much on finance lately until my wife told me about this awesome site. Love your stuff, WCI! Can’t stop reading it. Bravo!
We bought a house in Houston at a good rate and a cheap cheap price…in 2007. right before the market went to Hell. couldn’t sell it when I got fellowship out of state. So we rented it out remotely for 6 years (advise against doing that). Luckily had great renters who paid their bills and didn’t ruin the house. Netted maybe a couple hundred bucks per month max (with occasional larger expenses eating into that). Renters moved out last year and luckily we sold house first day on the market. Even made $15,000 after closing costs! (even though almost all of that money is about to get sent off to the IRS for our 2016 taxes). 🙁 Regardless, I feel SOOO much less stressed to not own that house and rent it out remotely. Moral of the story, for Zendoc…I am now a very happy renter with no plans to buy another house any time soon. I’m sure buying is great for some people. But renting doesn’t feel like a waste of money to me at all right now.
Hello WCI,
Thank you very much for you site. I’m a PA making about 100k/yr, have been making payments on my loans for the past 2 yrs from 140k, now I have about 105k left. I always thought refinancing was a bad idea until I read your site. Also, I’ve decided to rent for the next 2yrs instead of buying in order to save that 20% for downpayment. With that being said, how long do you think it would/should take to pay off the rest of my loan if I decide to refinance them? Background info: I have excellent credit score, my wife if just getting out of residency, and I have 3 kids
Your wife is just getting out of residency and you’re a PA? And you only owe $105K? I guess it depends on what your wife makes, but even if she is a pediatrician I would hope you could pay off your loans in less than a year, refinanced or not. This ignores the fact that she probably owes $300K of course.
Hi WCI – thanks so much for the information contained in your site. I only wish I had seen it 5 years ago…alas.
I was wondering if you (or anyone else) had any thoughts on my situation. I’m about to finish residency, and have a job that will pay $280k. My student loan debt is $390k with $95k of outstanding interest. Like a fool, I used forbearance, and have missed 5 years of PSLF while in residency (plus the accrued interest). The position I am taking is a 501c3, but I could see myself moving into PP in 3 years (and earning more like $400-500k). My average loan rate is 7.2% fixed for 10 years (not refinanced). My question is what to do.
Do I go for PSLF and save the rest on the side, in case I stay within the 501c3, or do I refinance as an attending and try to crush the loans ASAP? I should be able to allocate $8-10k/mo to the loans, if needed.
Also, in relation, how much should I be putting into retirement vs. loans? I get 10% of my salary straight into a 403b by the employer. I was thinking I would just max out my $18k 401k and apply the rest to loans.
Any thoughts would be greatly appreciated!
I think you’ve missed the PSLF boat by going into forbearance. The lack of good advice at a critical stage in your career may have cost you something close to $350K. I’m so sorry. You can still run the numbers (or pay someone else to help you), but I bet with that income and that loan, there won’t be much to forgive ten years from now. Might as well refinance and pay it off.
At $10K a month, they won’t last long. You’ll be debt free in less than 5 years, which is actually faster than PSLF, but overall will come out behind.
There is no right answer to the student loans versus invest question. I’ve done a podcast on it, a blog post on it, and dedicated a big section of the book to it. The bottom line is you want to eliminate debt as quickly as possible without being stupid about it. Stupid is missing out on a 401(k) match. Stupid is probably also missing out on tax-deferred contributions, HSA contributions, and maybe even Roth contributions, especially if you can refinance into the 2-4% range. The best thing when you have student loans is to do both- max out retirement accounts and make huge payments on the debt by living like a resident for 2-5 years after residency.
https://www.whitecoatinvestor.com/student-loans-vs-investing/
Unfortunately I am in TC position. Wish I seeker and obtained better financial advice 5-7 years ago. I deferred and forbeared and not understanding the consequences… Not sure if I still do to be honest.
Med school Loans looked like 250k federal
$50k private
Unfortunately when I was trying to make a dent in them during fellowship, husbands company which he put a good amount of money into dissolved. He had no student debt but now had a bunch of personal loans and credit card debt that I had no idea of. He also made and unwise decision to finance a car in addition to my car that we were already making payments on (both bmw)… Really regret those 2 decisions. Luckily I accepted a first attending job in a more affordable area in California . I started in 9/2016. Salary 205k with 50k taxable bonus. 18k of it going to 401k. No other investments and don’t own a house yet.
Since then I have paid off :
~20k debt to family members whom my husband borrowed money from without my knowledge (while interest free , the risk of ruining familial relations was stressing me out)
~8k credit card debt
~50k private Med school loan
~monthly rent 1650
~daycare
~both cars total $1000/month
~all bills
I have taken this on in the truest sense of marriage and I am trying to allow My husbands credit to rebuild. We are able to get rid of one car next month and use an owned car next month (which he has had this whole time!- but will likely need to fix it up a bit).
While he is working, I truthfully do not want to rely on his income and we have kept it as savings account.
We are trying for another child as I am not getting younger.
Our landlord has decided to sell this house and we need to be out by March 2018. We were considering buying but is this “smart”? Will we even get approved for a home loan??
I know I am not a candidate for th PSLF as I have breaks in the time I was making payments (correct?)
Remaining federal Loan is ~6.5% and need to get that down . I hope I get approved to refinance?
I also got approved for a 90k state grant towards my loans to be dispersed in increments over next 3 years as long as I continue to work in underserved area. (This will help a lot!)
If I continue to make 205k, how do I approach paying off the federal loan .
Is it wise to buy a house now? We have been looking at home 550k range but as I type this, I am nervous about what your going to say.
I’m assuming we shouldn’t be looking at any vacation travel either?
Clearly we have not been financially smart and need to really get a handle on this to get out of the rut we have been in.
ANY advice is welcome!! Please!
Breaks in payments don’t disqualify you for PSLF. You just need to make 120 monthly payments. The only question is whether there is anything left to forgive after 120. Run the numbers or get professional help to see.
https://www.whitecoatinvestor.com/student-loan-advice/
I’m not sure you’re in a position to buy a house, but the real issue isn’t whether you buy or not (assuming you’re not going anywhere in the next 5+ years) it’s how much of your income is going toward housing.
Take advantage of the 90K, but assuming you’re not going for PSLF, refinance and start throwing a four figure amount at the debt every month above and beyond what you’re required to pay.
$550K is pushing my usual guidelines, but I do get that California is an expensive place. Maybe it’s okay to push it to $550K after the loans are gone.
You’ve made quite a few financial mistakes, but none are fatal and all are common. Don’t dwell on the past and focus on the future.
Hi all,
First time poster here. This is all a very interesting discussion, and I’m still deciding what will be best as I’m graduating shortly here.
I have read that you can refinance part of your student loan principal. I wonder if it would be possible to refinance and use REPAYE at the same time. For example, refinance my highest interest unsubsidized loans, then use REPAYE for the rest.
Problem is, I’m not sure whether the monthly payments on the refinanced portion would count as part of the REPAYE program. If they did, this would likely exceed the interest and take from the benefit of REPAYE (as it would then no longer be forgiven). Any thoughts or advice? Thank you
A
No. They would not. They’re out of the federal system when you refinance.
Your plan doesn’t make sense. If you’re going for PSLF, don’t pay any extra on any that can be forgiven and certainly don’t refinance them.
I’m not going for PSLF. I just wonder whether the effective interest rate with REPAYE would beat the refinance rate on some of my loans. Particularly the subsidized loans, where REPAYE forgives more interest. Don’t know if this makes any sense. Thanks
Ahh….I see. Well, it dpends on what your effective rate under repaye is and what rate you can get refinancing. You’ll have to go through the refinancing process and calculate it all out to know for sure.
Yes, this is true. Thank you for your quick responses and attention.
It has been a bit difficult to make this calculation. One thing I am not sure of is the timing of interest forgiveness in REPAYE. If they forgive interest on a yearly basis, for example, that is much different than on a monthly basis. Monthly interest forgiveness would be better, I think, since that amount wouldn’t be added to the principal. Tough to figure out an effective yearly interest rate with REPAYE, but I’ll keep trying and update if successful.
WCI post idea: submit a pic, best student/resident beater car. I enjoyed the pic of your Durango, but my hail damaged civic is probably more epic!
I thought the Durango was pretty nice. That was a big upgrade from its predecessor, an $1850 Mazda 6 I drove for four years as a new attending. It had neither power windows nor functioning A/C. Shoot, that Durango was like $4K when I bought it. It wasn’t a beater.
Haha you are very correct, I shouldn’t be name-calling. Mazda sounds great
I am a pgy5 ent resident with new contract in hand, currently 240k @6.8%. I was planning on refinancing now with only a few months left in residency and then refinance again in fall or spring 2018 for better “attending” rate. Any idea if multiple refinancing will hurt my credit score?
Very slightly, not enough to worry about unless you’re about to buy a house the next month.
what would be the threshold to worry then if at all? Buying a house is already in motion and we close in mid may. so would the recommendation be 1) holding off on refinancing now and pull trigger when “attending” rates are available 2) move forward with refi now plus refi later with attending rates 3) refi now and hold off 12 months for credit rejuvenation and then refi.
Finish the house purchase, then apply again. If the rate is better, refinance. If it isn’t, check again in 6-12 months.
Thanks for all the information. First time poster and I’m a pharmacist. Student loan debt is about 150k. Interest rates vary from 5.1 to 6.8%. I’ve looked into SoFi to check the rates and they’re between 4.1 and 5.5%. Is it possible to refi only the higher interest loans? My goal is to have it paid off within 3 years. Any tips are appreciated
Yes. That’s the best strategy.
@Mya I had the same question and when I went to refinance my loan servicer kept telling me I couldn’t get the information I needed to refinance the individual loans. I basically gave up trying to refinance because of my Federal loan servicer. A friend of mine who is a physical therapist told me to reach out to Fitbux (www.fitbux.com) for help. So I did and come to find out my loan servicer was telling me I couldn’t refinance because of the way they had grouped my loans. One of their reps jumped on the phone with me and helped me sort it out. In addition they walked me through my different loan options to help me maximize the refinance for my specific situation.
I highly recommend reaching out to them. At this point they only work with physical therapist but you can send them an email through the contact us link and tell them a friend sent you and they will help you out. They don’t charge anything and its definitely worth the time…
DRB double interest warning – I recently refinanced with DRB. DRB starts charging you interest when they mail out the check to FedLoan, NOT WHEN FEDLOAN CASHES THE CHECK. It takes about 10 days for FedLoan to process it. So you are being charged 10 days of interest from DRB and those same 10 days you are being charged interest from FedLoan. Basically the $300 bonus I got from the WCI link was wiped out by this double interest. Not sure if all the refinancing companies do this but just something else to look at when assessing costs and fees of the different companies to refinance with.
Interesting. First I’ve heard of that issue, but it makes sense right? If you were loaning your money out you’d want the money to be earning interest as soon as it leaves your possession, no? I think the solution is shorten that 10 days through better service, but not sure how much of that you can expect from FedLoan.
I haven’t posted in a while but wish to contribute in case anyone has questions or wishes to learn from my successes and/or failures.
I had 300k from med school that initially was in IRB during residency. I entered repayment when I graduated and worked for a “for profit” group. It was at this point that I decided to refinance with DRB from 6.5% to 4.5% 10 year fixed. I moved back to a non profit a year later (oh well). It has been 4 years since graduating residency. That 300k is now < 60k and I am in the process of refinancing again, this time with SoFi with the hope of securing the 3.375% for a 5 year fixed.
If I were to do this all over again, I would probably have done the same thing. The stress of PSLF (whether it remains intact) when dealing with 300k plus interest is too much for me. I wanted to be in control of my own financial destiny and professional options.
Loans would be gone had I not married and bought a house in the interim. If you are single and working full time (and living like a resident) there is no reason to have any significant debt 3-5 years after residency.
Good luck
IRB, lol. I hate the IRB.
Sounds like it is working out well for you. Obviously a working crystal ball would have been useful.
Well I wrapped up my refi with SoFi (WCI- thanks for the $300.. I’m happy you are thriving as well!). Compared to my first refi with DRB this time it was much easier (2 days). I think this niche industry has come a long way in 3-4 years. I shopped around and SoFi had the best rates and that was the #1 factor for me. DRB has fallen behind with rates. Over the last 3 years I found that DRB definitely improved their interface but they still lag by ~5 years in terms of userability and IT. Their website is clunky and something as simple as obtaining an updated loan statement takes them 1-2 business days. All in all I would still refi with them again if their rate beat SoFi but it was not even close which leads me to believe that they may be phasing out of this niche. Now that my mortgage (3.25% 15 yr fixed) and medschool loans (3.375%) are much more reasonable we can plan on other investments while continuing to pay back the above. WCI is a great resource and I reference this blog in many resident lectures.
I’m not sure DRB is “falling behind” just because your rates for this particular refinance were higher with DRB. Sometimes their rates are a little better, sometimes a little worse but they’re usually in the same ballpark.
Certainly possible. I can only speak from experience of re-financing with both (3 years apart) and SoFi was quicker (by a month) and required far less on my end. I have not been following the rates over the years but currently DRB is almost an entire percentage point higher (5 yr fixed) which really makes no sense if they consider themselves a direct competitor with SoFi. They have to know that people are comparing apples to apples and they seem to be unable to compete. Am I wrong to think that?
I agree that most people shop on rate, but I can assure you there are plenty of people still choosing DRB. So I’m assuming they’re still offering the lowest rate at least some of the time. Remember that just about all these companies offer a range.
So DRB’s rate page as of right now says fixed 5 year loans are 4.2-5.9%
And Sofi’s rate page right now says fixed 5 year loans are 3.375-5.99%.
So if you are like the world’s most awesome borrower ($500K income, $100K loan, credit score 840, 3 years of easily proven W-2 income, whatever else they consider etc) then sure, you may get a better rate with SoFi on a 5 year fixed. But there are going to be a lot of people elsewhere in the range.
Agreed, though I suspect many people reading your blog and refinancing may be in that group you mentioned when they graduate from residency if they were fiscally responsible. Self selected group just like SDN. I understand and respect why you are defending DRB, and I appreciated their customer service for the last few years.
No, mostly because I hear from people who apply to both and the difference is typically 1/8% or so, one way or the other. I just haven’t seen a 1% difference routinely. But if there is, no big deal to me. I get paid either way if they go through the links on the site.
I’m contributing about 10% to my 401k through my employer. I’m making double payments towards my loans monthly to get them paid off asap. My question is would it be wise to decrease my contribution to my employer match (4%) to have a few extra dollars to help with payments?
@James thank you that information. I’ll try teaching out to them.
Probably not. Missing out on your employer match is the equivalent of leaving part of your salary on the table.
The company match is 4% I’m currently contributing 10%.
I’d be sure to contribute enough to get the full amount of matching dollars.
Hello WCI,
My relative has this question for me regarding student loans. I told her that I’ll post her question here since I’m not very familiar with the topic since I don’t have one. Below is her inquiry. I would appreciate your input. Thanks!
“I wanted to get your thoughts on student loan repayment. Do you think it would be better if I start paying my student loan via Income based repayment plan to the government which has interest rate averaging 6.5-6.8% or should I try to apply for private companies like SoFi, which has interest rate ranging from 2.45-6.99% ? I have tried looking at the interest rate that I would end up if I go with Sofi but because my income is not that high during residency then they are requiring me to get a co-signer, which my husband will definitely do. Should I go with income based repayment or go with refinancing with private companies?”
Not enough info, but if she’s planning to pay it back she should probably refinance as soon as she is out of residency and do RePAYE until then. I see little reason to enroll in IBR. A case can be made for PAYE after residency if going for PSLF or if MFS.
Let her know those refinancing companies won’t give a resident a rate much better than 5.5%. SoFI won’t do it until you have an attending contract.
Hi WCI,
Big fan of your site and first time poster here. I am about to become a PGY-1 in EM and have been looking over loan repayment options. I have about $180k in unsubsidized fed loans avg rate of 5.8%. My current plan is to use REPAYE throughout residency and to refinance as an attending.
However, I spoke to a friend who works in finance who advised me that refinancing now may be a better option given that private rates may increase significantly in 3 years and I would be best to “lock in” a deal now. I realize the private refinancing rates won’t be as good as a REPAYE deal, but if the rates do go up then I stand to save more money in the long run. Do you have any thoughts about this argument and any insight to interest rate growth?
If I did refinance my top choices would be to go through DRB or Link for the resident-specific plans with low monthly payments.
Thanks!
Your friend who works in finance probably isn’t aware that the only rate you can refinance to is about 5.5% and your effective rate under REPAYE is probably lower. Plus life changes and you may later be interested in PSLF. Refinancing eliminates that possibility.
And no, I have no idea what interest rates will do in the future.
You describe DRB etc as your “top choices.” I’ve got news for you. Those are your ONLY choices. This is not something that is widely available. Try it. Ask your finance friend (or your bank or whatever) if his company will refinance you. I’ll bet the answer is no. It’s just not a business anyone was in until a couple of years ago.
I’ve done some pre-qualifications using my wife’s info (earnings, med school debt etc., and found Sofi, DRB, and Citizen’s Bank are all very comparable in rate/monthly payment. Is there anything else to look at to make the choice between them? BTW, I’m pushing for a 10 year fixed rate repayment, balancing affordability with significant reduction in interest, compared with current MOHELA, 6.8%, 25 year repayment arrangement. This info has been very helpful for us. Thanks!
Rate is the main thing. Service second. I’d encourage you to make a plan to pay off your loans in 5 or fewer years, not 10.
I read your book a few years ago. I read a lot of financial news and enjoy your website. I feel lost at times yet I have very detailed cash flow assessment via Mint and separate spread sheets with short term goals and “flex” goals. I started practice 3.5 years ago. Should I refinance student loans to a fixed 5% rate if I have 150,000 in private loans, variable at 2.75% and tied to Libor average (likely no, but I want to hear from you) and currently I pay off 30,000 per year. Yes, I have federal loans as well fixed at 3%.
Should I pay less towards the private loans and put more money towards investments, such as starting a business, and thus obtain a higher fixed rate of 5% before rates rise further?
Should I have a financial advisor?
Should I have a tax advisor? I have read over the years via your blog many physicians recommending tax advisors to reduce their tax burden? Do you recommend this? I doubt any tax loop holes apply to me. I do not own a home. I am an hospital employed physician and thus do not own my own practice. I do not own a business.
I fully invest in 403B and 457B. We have not invested in tax 529 college saving plan after congress attempted to remove the tax benefits and colleges have begun reducing financial packages based on size of 529 savings (which they request to see).
Finally, where should I invest next? I have considered back door IRA with investments in stocks since this would provide some tax benefits but have yet to pull the trigger. My wife and I want to create another revenue stream but we can’t seem to agree on the next best decision. Real estate is complex and high up front costs and after the real estate collapse, we had a home we couldn’t sell for 4 years. My wife does not work and we are motivated to start a business but we only have enough capital to either invest in back door IRA and other “safer” investments or start a business (which could fail but have bigger long term return on investment). What is your thought? I am 42 yo and my wife is 46yo. We are behind our physician peers with total assets per Medscape and owe more in student loans.
I also struggle with the decision of how much to spend on vacation. I missed many years with my twin daughters, who are now 14yo, due to training and we only did stay-vacations. Now I am able to afford vacations but I feel guilt that we spend too much on vacation rather than our future. I want to enjoy vacation with my daughters before they are gone. What percentage of take home income should be spent on vacation? Their private school consumes a lot of our cash flow as well.
I would like The WHITE COAT INVESTOR’S recommendations in short bullet points. I know your time is valuable
Lots of questions and I don’t have anything more than what you’ve written to go on. Small details I’m not pertinent to could change my answers.
1) 2.75%? No, probably wouldn’t refinance because you probably can’t do much better than that. I’d probably stick with the variable.
2) Whether or not to use a financial advisor is not only a very personal decision, but it is not a dichotomous one. You can pay an hourly rate financial advisor for a check-up on your plan once a year without paying hefty AUM fees for instance.
3) It’s pretty easy to find a tax preparer, but a true tax advisor/strategist is a lot tougher. Honestly, I doubt there is a lot of value there given your relatively simple tax situation.
4) I’m curious why you think your kids will qualify for any financial aid given your income. Might want to understand a little more about the FAFSA. This post may help: https://www.whitecoatinvestor.com/why-most-doctors-shouldnt-bother-with-financial-aid-planning/
5) Kind of a weird choice- Backdoor Roth IRA or start a business. I guess it comes down to the expected outcome of the business, but that’s probably what I’d do. You have until April 15th 2018 to do Backdoor Roth IRAs anyway for 2017, and maybe your business will provide the income to do that.
6) I wouldn’t assign a percentage for vacation. Make sure you’re saving enough for retirement (20%) and have a plan to be rid of those student loans in a reasonable period of time (<5 years) and spend the rest on whatever makes you happy- car, boat, house, vacation, whatever.
Does increasing the number of credit cards you have (assuming no fees, no change in expenses) to increase your available credit and thereby reduce your debt:credit ratio ever make any sense? Is this a real thing? Why don’t we do this?
LOVE the site. Thanks as always for being a lifesaver.
Make sense for what purpose? Do you have a credit score that is just slightly too low for something you need it for? Generally if you just pay your bills your credit score will be high enough to do whatever you want a credit score for.
Makes sense. My credit score is fine (783). I have several relatively low interest private loans I was trying to refinance (4.1%ish) and none of my refinance options were super great (high 5 vs. low 6%) and was trying to find ways to make me seem like a better borrower and get a more competitive rate. Thanks for the input.
Ahh…I see. But I doubt raising your credit score above 783 is going to lower your rates much. That’s pretty darn good credit already.
I have a unique situation that has not been mentioned. I came to the US with a student visa, and as such, did not qualify for federal loans. I took a private loan with the help of a cosigner with Sallie Mae, now Navient for 2 years of medical school. Was required to make interest payments even through residency. Have finished residency and will be starting a new job next month with a H1B visa. Currently owe Navient about 105K at about 10% interest rate. Tried to refinance during residency, but many companies required you to be a citizen or permanent resident. The question I have is, are there companies out there that will refinance educational loans for a physician who is not a US citizen and who is currently on an H1B visa?
Thanks. Appreciate the help!
I don’t know but after you check with each of them, I would love to do a post/receive a guest post about it using the information you collect! I think you’re going to have to call each individually and ask.
No problem. Will do.
Hey fellow international student! I am in a similar situation, except my private medical school loans are at a slightly lower rate (6.5%). I graduated from residency 1 yr ago (was on H1b), and I am now working an attending job on H1b with green card sponsorship. I saw that Sofi is now offering (limited) refinancing to people with H1b visas, so I applied and am awaiting their decision. I did need to provide proof of green card application. I am not sure if they will consider residents on visas.
Many other lenders I looked at were also willing to lend to docs on H1b visas with a US (citizen or PR) cosigner, but I didn’t want to drag another person. Again, not sure if the same applies to residents.
Thank you. Didn’t know you could do that after a green card application. I am on a waiver, so would have to complete the 3 years before applying for a green card. Anticipating paying off a majority of the loan by then.
Actually they did not accept my proof of green card application – they wanted a specific document that I did not have yet; their representatives I spoke with have no idea how green card processing works – so I withdrew my application. Waste of a hard pull, but oh well. The amount they offered to refinance was also limited to 100k with 5-year fixed as the only option (rate was around 5%). Will continue to chip away at loans while my immigration paperwork progresses.
Thanks for the update.
Update:
With the interest rate in my variable student loan with Navient rising from 11 to 12%, I decided to give SOFI another look. Having your case in mind, I called them to ask about their green card/H1B requirement. They do need you to have at least two years left in your H1B, i.e you need to apply before the end of the first year of your H1B. If not, you will have to show proof of green card application, which is likely the situation you were in.
There was some unnecessary confusion on their side as the application was initially denied. Their reason was that I used a referral from the white coat investor and that the link I used was only for employees of white coat investor. This did not make sense and I was able to speak to other agents from SOFI and it did not make sense to them either.
Ultimately I was able to get my loan refinanced at 4.5% for 5 years fixed, without a cosigner. I had already being paying them aggressively so I owed less then 100k.
Will likely continue to pay the loans at the same intensity as I was doing, even with this lower interest rate.
Employees of the white coat investor? Sounds like confusion on their end. There are no employees of WCI with debt.
Congratulations on knocking over 7% off your student loan interest rate. That’s huge!
Thank you. Very huge. Saved almost 6k per year on interest.
Just sending a Thank You!
Not sure why I didn’t look at this sooner- refinanced (via you’re website)
5 year variable saved me $1,500 a year! Should have jumped on that sooner.
Anyway – thanks for creating value! You’ll save me over $7,000!
You’re welcome!
Do these referral links work with the mortgage or refinance products offered from the aforementioned lenders?
The links provide a special WCI negotiated deal on student loan refinancing products. I don’t have a special deal on mortgages, but you can often get to their mortgage products (if the institution does both) starting with those links.
Dear WCI,
So much great information. Recently completed fellowship and am revamping my repayment strategy. I, unfortunately, have a lot of debt ~ 370K (majority of it federal 320K, if i avg the interest rate of all the loans it’s 5.95%) with the remainder private (one loan 11% interest with the rest at 3.75%). Initially, the plan was to do PSLF and am currently doing IBR with 26 qualifying payments, but ended up for other external/job availability reasons taking a PP job at ~ 175K/yr (take home will be about 8K/mo). Not great math. At this point, trying to figure out the best strategy. Looking at refinancing and pre-approved from SoFI at 4.7-5.3 depending on the time period payback. Slightly higher rates at DRB. I don’t have any plans to resume a non-profit job but there is a possibility the practice may be bought by the university health system in the next 5 years. Would you refinance everything? Consider keeping some of the lower rate federal loans in case the practice does get bought out by the university health system and could resume PSLF (though I realize there is no crystal ball)? Avoid consolidating the private loans with 3.75 interest rates? Thank so much for your time.
No, the math isn’t great. It’s doable, it just involves living like a resident longer than someone who kept their debt to 1X.
My crystal ball is always cloudy, but if I were you I’d refinance everything, live like a resident, and throw $6-8K a month at the loans for 4-5 years. What other choice do you have? Treat it like a mortgage and pay it off over 30 years? Ugh.
And no, if you have some loans at less than what you refinance to, don’t refinance those.
Thanks for all the good advice! I do have a somewhat unique question about my situation. I am currently at about $320,000 in student debt, in my 2nd year of residency, and will soon likely sign a contract once I finish for ~$525,000. My wife just graduated as a dentist and also has $320,000 in debt. For the next 3 years in residency we will likely make a combined ~$125,000 (she’s just working part time). We are both in the PAYE program. I was considering switching to something like DRB for the lower interest, but just saw your comment above about “effective” interested being potentially lower in the PAYE or REPAYE program and was curious on your comment? We have a family and “hope” to contribute 10k-15k/year to student loans, so would likely not be even paying the interest off of mine and my wife’s loans. I’m sort of stuck and would appreciate any input on your opinion in my situation to go with a company such as DRB vs sticking it out with PAYE/REPAYE? Once finished, we are hoping to contribute 15k-18k/month to the student debt. Thanks!
There is no interest subsidy under PAYE, only REPAYE. You guys probably belong in REPAYE, but your subsidy may not be all that high given your income. If I were you, I’d pay for professional advice about your student loans, especially if either of you is considering going for PSLF. Private loans can be refinanced with DRB during residency, otherwise, don’t refinance until you know you’re not going for PSLF and if the rate is lower than your effective rate under REPAYE.
Huge debt, but big shovel. I know you guys can do it even if you decide to pay them back yourselves.
https://www.whitecoatinvestor.com/student-loan-advice/
Thanks for the advice- anyone you have in mind to start with for professional advice for the loans as you suggested?
The link goes to my recommended student loan advisors.
Hi WCI,
Like everyone else, I appreciate the blog immensely and am enjoying the process of employing boglehead principles to my family’s financial life.
I’ve just finished PA school and am fortunate enough to have landed my dream job right out of school working for a large and well-established EM group in my home town. Since I’m a new grad, the gig has a 1 year residency built into it (which I’m very excited about actually), paying about 75K for the first year with the salary approximately doubling after the training year (and not including bonuses). My wife is an ICU RN and we’ve been living off her salary while I was in school.
Long story short, my total student loan debt is 177K, including previous grad school I did before PA school. Between my wife’s 403B and our Vanguard accounts (his and her Roth IRA’s), we have about 60K in Vanguard index funds saved up and about 15K set aside in a Ally savings account as an emergency fund. I’m also planning on starting up an HSA account through my new employer and at least open a Vanguard (Nevada) 529 for our son who is just now 4 months old.
I’m glad to be done with school, but now I’m trying to prioritize my finances and figure the fastest and most efficient way to kill these student loans. I’m going through your preferred companies for refinancing (since I’m deciding not to go for PSLF) and it seems like DRB and Sofi are some of the top choices. I’ll keep looking around, however, for the best possible interest rates.
Was wondering if you folks could point me in the right direction as far as an optimal money flow for my circumstance. I want to kill this debt ASAP, but would it be wise to put off substantial saving until it’s completely gone? Or should some saving always be part of the equation? Honestly, we haven’t been saving too much while I’ve been in school, but I’d like to change that.
Thanks in advance!
Pretty sweet gig- 2 years instead of 7, one year of residency that pays 50% more than an EM MD residency, and then better pay than many pediatricians and FPs for the rest of your career.
This is the classic debt vs invest question. There is no right answer, just a right answer for you. The key is to maximize the percentage of your income going toward building wealth-either paying off debt or investing.
I think a good middle ground is pay enough on the debt to be done with it in 5 years or less and then direct the rest toward tax-advantaged retirement accounts. If you save enough, you should be able to max those out AND be rid of the debt in less than 5 years.
https://www.whitecoatinvestor.com/student-loans-vs-investing/
Thanks for the pointers WCI. On another note, is your EM group associated with Team Health by any chance? I only ask because I remember reading another post of yours where you mention that you’re forced to use Shwab ETF’s through your company 401K and that’s the same things we’re getting offered.
What types of ETF funds would you recommend with such a Schwab account? Honestly, I’d personally much rather stick to index mutual funds simply because I highly value their simplicity and ease of use (I’ve never gotten into ETF’s before, and I’m sure they can’t be that complicated, but I enjoy convenience). I also understand they offer a PCRA which would allow you to have a lot more options, but fees don’t really make that a viable option until you’ve reached a substantial account balance.
No. I would probably retire before working for Team Health. I guess we’ll have to see if a CMG ever gets our contracts, but I would certainly hate to lose the control over my practice that I have now.
There are some Schwab ETFs and Vanguard ETFs in the 401(k), but you can just do the Schwab PCRA option and buy whatever you want, including Vanguard ETFs for a low commission. I agree it takes a bit of a balance for the PCRA option to make sense. I think it was the third year when I switched to that.
Hello,
I just graduated from residency and making 190K per year. I have 33K in debt; 6.55% from Navient. I got an offer from Sofi for 5 year fixed 4.5%. There’s a $3000 finance charge that I’m not sure what that’s about from Sofi. My question is, with a relatively low debt, should I refinance? Im hoping to make prepayments and pay off the loan early anwyay so should I leave it with Naveint?
Lastly, I have not signed up for PSLF yet but would qualify (my attending job is non profit)– but I think if I can pay it off sooner and not wait for PSLF that would save me more money in the long term?
Thanks so much!
SoFi doesn’t charge finance charges. Are you sure about that? That would be very new. Can you link me to some documentation about it and I’ll talk to SoFi about it. Assuming no finance charge, yes, you should refinance. With the finance charge, you’d have to run the numbers. But if SoFi is really charging a $3K finance charge, why not just go with one of the other companies. I don’t think any of them charge finance charges.
If you made lots of tiny IBR/PAYE payments in residency, and are working for a 501(c)3, PSLF will always work out better than refinancing and paying off, although it could take longer.
They say that this is the “interest” that accrues during the loan period. Does that make sense? If there’s a way, I can try to DM you a screen shot of it.
I guess for PSLF I just don’t think it will still be around in 10 years…feels like a gamble. I understand what you said to others about putting aside money into a fund anyway to throw at it later; but sometimes just peace of mind knowing the debt is gone..
Oh. But you don’t pay it up front. That’s fine if it is just an estimate of what the interest will add up to.
There is a bit of a gamble with PSLF, but I think most likely you’ll be grandfathered in if it changes and you can always save up a side fund to pay it off if PSLF goes away. So the only gamble is paying a little extra interest in hopes of having the principle and interest forgiven.
That might not give you the peace of mind you seek though.
After reading today’s current post regarding insurance layering, I started thinking more about my spouse’s (still substantial) student loan debt, and it’s implications on our insurance need. Not entirely sure what would happen to all of that SL debt in the event of her death..seems complicated. Half of her debt is still public (Navient) because the rates were reasonable, and she refinanced the remaining half through DRB, in her own name. She may also have a tiny sum from undergrad that is still listed with her mom as a co-signer. We live in New York State, if that makes a difference. Would love to see a future post discussing the intricacies of how various types of student loan debt responsibility are treated if the borrower dies.
Student loans generally go away at death. Read the promissory notes to be sure. If there is a co-signer, the co-signer is then on the hook. Not sure I can blow those three sentences up into a blog post.
If it is as simple as that, fair enough. However, in looking into this question, my take-away was that what you say (death of borrower = death of loan) is generally true for public student loans, but not necessarily so for private student loans. Thus the act of re-financing one’s public loans into a private company (like SoFi DRB etc) could have a serious impact on the debt liability of the borrower’s surviving estate/spouse/children that need to be considered. Perhaps the variability among private loan providers is too random to discuss categorically, and thus “check your promissory note” is the only advice that can be given. In that case, Perhaps this current blog post should have a “13th thing you should know about student loan refinancing” — namely that if you refinance a public loan into a private one, you may need to increase your life insurance policy if the fine print now puts the surviving family back on the hook for the debt obligation.
Yes, read the fine print as it is an important point. However, I wouldn’t let it stop you from refinancing. The cost of a little more term life insurance is likely dramatically less than the cost of paying additional interest.
As I recall, both DRB and SoFi (and most of my other affiliate partners) forgive loans at death, but read the fine print to be sure as that could change at any time.
Hello! I just discovered this site and book. I am loving it so much.
I am trying to tackle my student loans now that I am making attending salary.
I have about 120k loans with an interest of 6.8. I just graduated from residency and making 250k per yr. I’m trying to see what would save me the most money. I want to be aggressive and be a diy person. I am willing to live like a resident for 3 years ☺️.
So please let me know which one is better:
A) do the “snowball” pay off by paying off the separate notes individually as quickly as I can. Trying to pay off the loans with the highest principle first.
Or
B)refinancing to 5 years with extra payments when I can.
Why not do both? Refinance your loans to a 5 year variable at perhaps 3%, then snowball everything you have at it. If I was fresh out of residency making $250K and owed $120K, I’d have my education paid off within 9 months, just in time to start making 401(k) contributions, max out 2017 Backdoor Roths before the April 15th deadline, and have a down payment to buy a house once I knew my job and social situation were stable. You’re in a great position with great potential if you make a few smart decisions now.
I would pay off the high interest rate loans first not the highest principle first. I was going to do that before I realized how much money it would cost me. Of course the shorter the time period you repay the loans then the benefit of paying the high interest rate loans first is diminished but still saves you money… Check out this article, he goes through the math and difference between the two methods: http://fitbuxarticles.fitbux.com/debt/dave-ramsey-student-loan-repayment/
Yes, that’s the mathematically correct answer. But it generally isn’t a misunderstanding of math that gets people into debt. It’s a behavior problem. So the approach that is most likely to produce the desired behavior could be right for a given person, even if it isn’t technically correct mathematically.
You are absolutely correct in regards to developing good behaviors. That is why Dave Ramsey says pay off the low balance loans first, to start developing good habits…not the high principle ones first. At the end of the day it doesn’t matter if you pay off the low balance first, high balance first, or high interest rate loan first. All of them require behavioral change and discipline. So if its the case that they all require behavioral change and discipline then why not choose the one that saves you the most money?
And yes, I agree with you and the author of that article, which ever one the person is going to do is the right option…at the end of the day that is what matters.
In addition, with myself and other doctors that I know, we have discipline. That is why we made it through med school. We’ve just never been shown how to apply that discipline to money and its not bad behavior that got me into owing 6 figures in debt. It was the desire to become a Doctor and every one of my councilors/financial aid/society telling me to take loans to accomplish it. Its not like myself and my colleagues are going out and putting 6 figures of debt on credit cards or over leveraging to buy a mansion, a yacht and a sports car.
You’re still arguing from the math side. I don’t dispute that mathematically that approach comes out ahead.
I disagree that most doctors are financially disciplined. Write me back after you have delved into the finances of a few thousand of them and let me know if you disagree. I bet you won’t. You say it’s not like doctors are overleveraging and using credit cards. Guess what? It is exactly like that. Maybe you aren’t, but there are plenty of doctors who are. 25% of doctors admit to living beyond their means in an anonymous survey. 25%. Can’t live on $200K+. 25%. Think about that. Now you know who might want to consider paying the lowest balance first to get some momentum as they change their financial habits.
The original comment asked about paying off the high balance loan, not the low balance loan…. So my question to you, does it take less discipline to make prepayments to the low balance loan relative to making prepayments to the high interest rate loan? Not sure how that is mathematical…
I assumed your reference to the high balance loan was a mistake on your part and you meant low balance loan. I agree when the lowest balance is also the lowest interest rate, it’s a very easy decision.
Also….25% living beyond means is a lot less than the “average” consumer in the US and it also means that the super majority (75%) do live withing their means.
Lots of great information on this page and in the comments. However I’d like to propose a question that I haven’t been able to get much information on:
Is it worth refinancing part of a $300,000 federal loan with a home equity loan?
I understand the risks of using a home equity loan and potentially losing the home if you don’t make payments. However, I also realized you lose any deduction once you become an attending and refinancing with a home equity loan gives you the advantage of deducting the interest. What are your thoughts?
Yes, that can be a great option. A non-deductible high interest loan that doesn’t go away in bankruptcy vs a deductible, low interest loan that goes away in foreclosure. Can be a great swap. Might want to do it before the end of the year though.
I had this same question and a friend recommended I go to FitBUX.com, build my profile and speak with one of their Coaches. I definitely recommend it. There is a good way and a bad way to do this. The bad way will destroy your credit score. You should definitely talk to a finance professional about this before moving forward….Saved me a ton in the long run
I had this same question and a friend recommended I go to FitBUX.com, build my profile and speak with one of their Coaches. I definitely recommend it. There is a good way and a bad way to do this. The bad way will destroy your credit score. You should definitely talk to a finance professional about this before moving forward….Saved me a ton in the long run.
Hi WCI,
I have 400k in debt (ouch I know) and have signed a contract for 230k next year. Average rate for my loans is ~6.8%. I have been looking into refinancing but am a little nervous about making high monthly payments as I have a preexisting injury that is currently doing ok, but I always worry could take me out of my work in the future. My disability coverage from residency only covers 3k a month, so I am nervous to lock into a paying much higher than that.
What should I do?
Thanks!
You have good reason to be nervous. High potential for disability, minimal disability service, incredibly negative net worth and student loans compounding at 6.8%. It seems to me you have good reason to live extremely frugally, pay off the loans even faster than someone else might etc. If you feel you need to keep the option to use IDR, then you unfortunately can’t refinance. But you should still be throwing a ton of money at those loans every month unless you’re going for PSLF.
Things to note while I was deciding whether to refinance or not.
1) Bank will refinance both your principle AND Interest amount, in which case may not be the best deal. Might consider refinancing after you paid off your interest first.
Ex:
200,000 loan + 40,000 interest, Currently paying 7% of the principle (200.000)
vs
240.000 refinanced loan @ 3-4% interest
2) Depending on the refinancing company, if you become disabled the loans cannot be deferred or cancelled (which is a scary thought). Thus you would want good disability insurance, and should take into account the cost of a higher disability insurance plan while you’re paying off a refinanced loan (probably a few extra hundred dollars a month)
1) What? That sort of scenario only makes sense for as long as you have uncapitalized interest.
2) Most have some sort of disability clause, such as letting you not pay for a year. But you’re right, the protection there isn’t as strong as in federal programs. Luckily, a little extra disability insurance is cheaper than interest on $200-400K in student loans.
Hi!
I in a similar pickle as a lot of the people above. I am hoping for some guidance. I have approx 490K of federal student laons that are accuring at 7.5% interest. I know that’s awful and it hurts to say that number. I wanted to refinance my loans and I am currently in residency. I reached out to several lenders and one of them is offering me an option of refinancing at 5%. A separate lender offered me lower interest rates after I finish my training (I have 1.5 yrs left). Is it a good idea to refinance right now during residency at 5%? And then maybe look to refinance with a different lender in a few years if they offer my a better rate? I am doing the PSLF right now but I am quite positive I will be joining a private practice and I will not qualify for PSLF once I finish my training. Any help is appreciated. Thanks!
So if you’re not going for PSLF, then it is okay to refinance if the rate they offer you is lower than your effective rate under REPAYE. You can refinance now and then do it again as an attending. Bear in mind your rates might not be so hot unless you have a very high income because your debt is so high.
https://www.whitecoatinvestor.com/new-student-loan-refinancing-options-for-residents/
It seems like there’s been a steady climb in interest rates over the past several months. Should one do a fixed rate in today’s financing environment or are we talking about a steeper climb in interest rates?
If you’re planning on knocking them out in just a few years, I think you can afford to run the interest rate risk yourself. But if worried, sure, buy interest rate insurance from the lender. (That’s what the higher fixed rate is in essence.) In reality, rates have to rise significantly and early in your payoff period for you to come out behind doing it.
Hi!
I have around $500k of student loans that is refinanced for a 10 year term. I will be starting an attending job making around $350k. My question is should I pay off the loans as aggressively as possible making more payments every month towards the principal or should I make the standard payment and save money in my 401k and other retirement accounts. I suppose if I don’t save any money in retirement accounts I could pay off the loans sooner. Would that be a wise decision? Especially if the employer is matching certain percentage of the retirement contributions. Thanks!
Classic debt vs invest question. Everyone has it. I see it three times a day. There isn’t a right answer. This post may help:
https://www.whitecoatinvestor.com/pay-off-debt-or-invest/
In your situation, I would make a plan to pay off the student loans in 5 years or less. Given your DTI ratio, it might be closer to 4-5 years. Then I would pay enough toward the loans to be out of debt by then. The rest would go toward retirement accounts. Then I would live like a resident so I could max those out too. Getting the employer match would be a priority for me. But if you’re having trouble getting that loan paid off in 5 years and getting your employer match (and honestly, maxing out the retirement accounts) you’re living too high on the hog.
Live like a resident and do both.
Is it worth looking at refinancing a $40,000 Fed Direct Loan at a 6.1% interest rate for a first year EM Resident? Credit score is only “Fair” –
around 650. Only other loan is for $30,000 but payments don’t start until Residency completes. Thanks!
Might be tricky at 650. That’s lower than you can get a mortgage at so I suspect it’ll keep you from getting a decent refinancing rate. You can certainly try, but I’d look again in 6-12 months as your credit score improves.
Hi WCI, I have great respect for you and love your website.
I’ll be starting combined IM/Peds residency this June. My spouse will be earning $8000+ a month (total monthly income after my adjusted residency salary would be: ~$11,000/month) . My thought is to refinance now. However, I noticed that most of the advice in this article is directed at attendings. You encourage residents not to refinance, as REPAYE may benefit them more. After reading your REPAYE article, it seems to me that my spouse’s moderately high income would make REPAYE much less beneficial for us vs many of the other residents discussed in the case studies in the REPAYE article. Does it make sense to refinance now as a new resident? What should I do? Details: Credit score: 717. Federal Loans: ~$270,000 ($78,000 at ~7% and the rest ~5%). We’re not considering PSLF, and hoping to practice medicine in a humanitarian capacity internationally so might be able to access missionary-type loan repayment options e.g. MedSend. We’d also like to buy a home in the next few months.
And if yes to the refinance question, does it make sense to go with a fixed rate since attending salary won’t kick in for another four years?
Hey – welcome. You may get a few more replies if you post the same question in the forum: https://www.whitecoatinvestor.com/forums.
I wanted to clarify that your spouse will be earning 8k/month now, while you are in residency, correct? Most of the resident focused repayment discussion are usually because your household doesn’t have an attending salary yet… if together you’ll be bringing in 11k/month, and PSLF is not an option, and what you’ve posted, I’d suggest you refinance all of the loans with a much lower rate.
What to do here: https://www.whitecoatinvestor.com/what-should-i-do-with-my-student-loans/
And some referral links from WCI here:
https://www.whitecoatinvestor.com/student-loan-refinancing/
If you can wait on the house (and downpayment), you can likely crush your loans in 3-5 years, depending how aggressive you are, and how big of a shovel you can use.
It’s important to list your goals out (joint conversation with your spouse) at this time. Is a house really important now? Is paying of fthe student loans important now? What other goals (or obligations) do you have for the next few years until you are both earning attending money? Kids? Will you both work fill time for the next 10 years? Are you aware of, and are you filling up all of your retirement accounts at this time?
Hi Jonathan- I was in the same spot a few months ago. A former classmate of mine told me to go to fitbux.com and they helped me do all the calculations to see if refinancing or using REPAYE was the right choice for me. I highly recommend checking them out.
Hi WCI,
I’m graduating residency in 3 months and have the same dilemmas that many other people have. I have ~ 390k in federal student loans at 6.8-8% my wife is a teacher and she has ~120k in loans (6.8-8%). She has been paying minimums on her loans and mine have been in forbearance all through medical school and residency. I start a new job in July making 250k. My wife will not be working. I need some guidance on which loan repayment plan to enter into. IBR vs PAYE vs REPAYE? Any guidance would greatly be appreciated! Thanks!
Why aren’t you refinancing? The income driven repayment programs were what you should have used in residency instead of forbearance, now there is little point even if you’re going to be working for a 501(c)3. At any rate, not quite enough information to give advice, but the right answer probably involves refinancing.
I’ll be working in a private practice setting with much higher earning potential over the next 5 years. Potentially will be making 500-700k in 5 years. I was afraid that if I refinanced right away i’ll be locked into to an extremely high payment and have no cash to do anything. I wanted to build a little cash/emergency fund first (Say for 6 mo or so) before refinancing. Is this a dumb idea or should I just bite the bullet and refinance right away?
A few thoughts:
First, I WANT you to make an extremely high payment so you don’t have cash to do anything else because I want you free of these loans in 2-5 years. The benefit of “locking” yourself into said payment is it gives you additional motivation to not inflate your lifestyle and pay them off quickly.
Second, what do you view as the point of an emergency fund when you owe $500K, are living on $5K a month, and make $40K a month? How big do you think it needs to be? How long do you think it should take to save up said emergency fund? If you’re living like I think you should, you should be able to save up three months worth of expenses (a full emergency fund) in about 2 weeks, not six months.
If you’re not comfortable with a 5 year variable, get a 10 year fixed and then change to a 5 year variable in a year or two when your income goes up.
When do you want to be out of debt? Let that be the question you ask yourself instead of “how big of a payment do I want to make?”
Makes perfect sense and I appreciate the feedback. The only issue is if this first job doesn’t work out and I’m out on the street with no income looking for another job. A 5K loan payment would then be a problem during those “unemployed” months. Obviously don’t anticipate that happening but want to plan for the worst.
Think of it this way- you’re buying insurance by staying in an IDR program. The cost of the insurance is the additional interest you’re paying. If you’re paying 3% extra on $300K, that’s $9K a year worth of insurance. Do you really want to pay $9K of insurance to cover a $15-30K risk?
Insure against financial catastrophe. Self-insure against other risks.
I want you to get yourself a $5K payment and pay $12K every month. Then that $5K doesn’t seem so huge, does it? Because you’ve limited your spending such that even if something happened, you could just cut your payment back from $12K to $5K and cover a pretty big emergency that month.
I’m wondering if I can generate some comments and advice for my situation.
I’m two years into a general surgery residency and an thinking of fellowship options currently. My long term goals are to spend a significant part of my career (10-20 years) in Africa doing humanitarian work. I have $268k in principle on my loans, all from medical school and no other debt (undergrad or consumer). Most of it is through unsubsidized stafford loans at 6.8%. $60k is through my school at 5-8% with subsidized interest while in medical school and for first three years of residency. My school has a loan repayment program for those who wish to dedicate their careers to humanitarian work. It is a 10 year commitment for me to pay off my loans through that program. Much longer than I would like, but it does enable me to start my dream job immediately after training and raise my family outside of the consumerist culture of America. I’ve drunk the cool-aid when it comes to living like a resident. My wife (a nurse, with no debt left — snowballed her 10k student loans within 9 months of getting married) and we have saved a total of ~65% of our income in the last two years (we got married a week before residency started.) This has gone into maxing out Roth IRAs for both of us, securing 4% 403(b) matches, an HSA and the rest into an Ally Savings account — essentially an emergency fund that has grown past that point. We are blessed, happy as can be, love what we do and will be going to Africa for 5 weeks as part of an international rotation soon.
I’m well aware that I would have my loans taken care of much sooner if I stayed in the US for 1-2 years immediately after residency/fellowship. I plan to live on about $15k a year once we move to Africa, so living like a resident isn’t an issue. It is all I know.But the value for me in going through the loan repayment program is that I don’t have to take 2+ years working in a job in the US while I would otherwise wish to be international. If for whatever reason we can’t go to Africa as soon as possible, I would probably try to find a rural job paying as much as possible and get out of debt as fast as I could…
My questions are as follows.
1. What to do with loans while in training knowing that they will be taken care of by our University’s loan repayment program. I’ve chosen deferment for now, and my logic on that is to save what I would have otherwise done through REPAYE and just make a lump sum payment at the end of residency if we don’t do the loan repayment program. Obviously there is a significant potential loss on accumulated interest here, but it does maximize the potential they will repay for me. Does this make sense? Or is my reasoning flawed?
2. What to do with the Ally savings and Emergency fund. Do I put it into a CD ladder? T bills? Leave it simply in a savings account and exchange the lower interest for ease of management? Put some of it into a taxable Betterment account mostly in bonds?
3. Refinancing: My university will still pay the loans back if I refinance. But I do like the provisions and safeguards of the federal loans. What would you recommend?
Thanks, in advance, for your thoughts.
1. Wow. You may be the first doc I’ve met for whom I’ve recommended deferment. Of course, that recommendation comes with a huge caveat- that your plans don’t change and that the program doesn’t change. You don’t sound 100% committed though, so maybe REPAYE would be wiser. Tough choice.
2. Keep an emergency fund and invest the rest for your other goals. If you have no shorter term goals, then for retirement. If you’ve maxed out available retirement accounts, then invest it in taxable.
3. Why refinance if you could defer and never make a payment on them?
Thanks WCI for your input. It is interesting that you picked up on some hesitancy on my part. We are committed to moving to Africa, just haven’t fully decided on whether we would potentially stick around for 1-2 years to pay off the loans. We’ll see what happens. Love your blog and site. Refer my colleagues here frequently.
I’d say to go. Live life a little!!
(it’s more of a heart answer than a checkbook answer… Maybe how I’m feeling today, but why wait? )
Hello, I don’t think I’m going to try and qualify for the public student loan forgiveness program because I think that if I live below my means for a few years after residency that I can pay off my loans much faster on my own. I’m wondering if refinancing my loans means that a future employer won’t be able to pay part of my loans if that happens to be something I can negotiate at the beginning of my employment contract. Would a hospital pay a private loan company or do you think they would only pay on student loans if those loans were coming from a government program? I’m basically trying to find out if other than public student loan forgiveness there are any other reasons why you shouldn’t refinance.
Also one more question. you say above that residents should not refinance. I wasn’t completely clear on why that would be. Thank you so much for your time!
No, employer paydown is usually fine even if you refinance. But the IDR programs and PSLF is gone once you refinance.
Residents can refinance private loans and if they know they’re not going for PSLF and their refinanced rate is lower than their effective rate under REPAYE, can refinance direct loans too. Bear in mind refinancing for residents is a pretty new thing, and wasn’t available at the time this article was written.
I have a quick question. We have aggressively paid off my student loans and I had the luxury of my wife working a great job during my time in training. We are now down to a little over $30,000 in federal loans at 5.8% interest. Our goals after reading the WCI book and blog is switch our efforts into saving a significant amount toward retirement (20% of gross income). My question is would there be a benefit in refinancing this late into the loan if we plan on paying it off in a little over a year or possibly two? Our contributions towards paying off the loan will decrease due to maxing out retirement accounts.
Your options may be limited, especially below $25-30K. Will it help? Maybe a little. The faster you pay them off the smaller the difference a lower interest rate makes. You can do the math. 1% of $30K is $300 per year. Worth your time? That’s depends on you.
I am really hoping to get some good advice about this. I currently have approx $330k of federal student loans, all consolidated, and I am making around $170k-$180k/year at the beginning of my 3rd year of family practice as an attending. I qualified for RePAYE, which I have been doing for the past 2 years. I am expecting my income to increase up to around $250K over the next year. My wife is a stay at home mom, so I am the sole bread-winner. We essentially do not live any differently than we did during residency. Any advice would be appreciated. I sure wish I would’ve seen this website prior to consolidating at the beginning of residency, but will move ahead with any suggestions.
Thank you to all in advance.
What’s the difference between your payments under the 10 year standard repayment program and your REPAYE payments? Did you make any qualifying payments during residency? Are you employed by a 501(c)3?
If there is no significant difference and you made no payments in residency or if you are not employed by a 501(c)3, then you simply need to compare your effective interest rate under REPAYE (which is likely just your interest rate) with what you can refinance to and then choose the lower rate. I don’t think your ratios would justify consideration of REPAYE forgiveness at 25 years or PAYE forgiveness at 20 years.
If you are working for a 501(c)3 and there is either a significant difference or you made a significant number of payments in residency, why not go for PSLF?
Thank you so much for such a quick response!
The difference in payments was initially in the mid-$3000 range/month on the 10 year repayment vs $1100/month with RePAYE. Unfortunately, I did not make any payments during residency and I do not work for a 501(c)3.
What you mention regarding RePAYE/PAYE forgiveness had crossed my mind and I event went as far as asking my financial advisor about weighing this option vs refinancing with SoFi/Earnest/other. I was approved by both SoFi and Earnest to refinance for monthly payments of roughly $2500/month x 20 year and presented this to him. This was at a fixed rate, though I do not remember the exact number at this time. I was hoping to get a comparison of the two options, keeping in mind the potential tax situation the year the loan is forgiven, but he fairly quickly recommended just refinancing at the time without calculating the total amount spent in either situation. Perhaps he had already been confronted with such a scenario in the past, but I wasn’t sure this was a measured decision. I am not savvy enough with the way these things would be calculated to figure this out on my own.
Thank you, again, for taking the time to respond to me! It is appreciated more than you know.
I think it’s worth a few hundred dollars to hire one of these guys to help you run the numbers between those two options:
https://www.whitecoatinvestor.com/student-loan-advice/
Although honestly, your loan burden is less than 2X. I don’t see why you need to go 20 years. I think you can be done in 5 if you want to be, but it’s going to take some sacrifice.
* Refinacing can cause a significant drop in credit score! *
I wanted to provide an anecdotal warning to those considering refinance. After reading this and other articles on refinancing student loans, I went ahead with SoFi a few months ago. Refinanced my undergraduate loans (from >10 years ago) along with my medical school debt at a rate of 5.25% (better than what the weighted average was previously ~6.6%). I am in my final year of residency, moving next summer for fellowship and plan to continue renting.
I monitor my credit closely through multiple sources (credit cards, which generally offer FICO 8; CreditKarma and others which show VantageScore 3.0; and the free annualcreditreport.com reports) and prior to refinancing my score had fluctuated in the 730-780 range for the past year. My undergraduate student loan accounts were my oldest accounts, and credit cards / auto loans were much newer. Once I consolidated / refinanced, the old accounts were paid off by SoFi and closed. Now my “length of credit history” as reported on VantageScore 3.0 is half of what it was and my score dropped to 655! FICO seems to weight things differently and consider closed accounts as part of credit history, at least for some time. So my FICO 8 scores are still >750. I know most lenders use FICO>VantageScore. And while we are not about to apply for a mortgage or car loan or anything, I’m still worried about a lower score affecting our ability to obtain an apartment rental or used car loan in the next year. Since I haven’t found much about this written online, I thought I should post a warning for people here.
My score dropped too even though they said they pulled a “soft” credit report?
A magazine published earlier this month says between March and now, the percentage of the population having a perfect score has increased by 28% I know why, many of them have been paying to get it fixed. Yes try to consolidate your credit so everything can be on a perfect stand with a golden score (I’m talking at least 790) in 2 weeks and all negative items would be permanently deleted for good. i just got saved by Anold. He got my credit score increased up to 820 and from then my whole story changed. He could also get your debt cleared. you can also get your credit score fixed by contacting [email protected] or texting him on +1 831 612 2958. thank me later
That’s usual. It usually will rise back in a couple of months.
Also, a faster track to bring debt free is worth the temporary reduction in credit score.
Thanks for the warning. There are several factors affected by refinancing that can lower your score. lBut if you’re not about to apply for a mortgage, I don’t see that as a big deal. Pay your bills, do what you say you’re going to do, and when you’re ready to buy a home, your score should be good enough to get the best rate available on a mortgage.
A magazine published earlier this month says between March and now, the percentage of the population having a perfect score has increased by 28% I know why, many of them have been paying to get it fixed. Yes try to consolidate your credit so everything can be on a perfect stand with a golden score (I’m talking at least 790) in 2 weeks and all negative items would be permanently deleted for good. i just got saved by Anold. He got my credit score increased up to 820 and from then my whole story changed. you can also get your credit score fixed by contacting [email protected] or texting him on +1 831 612 2958. thank me later
Hi, love the site. I’m 300k in debt and recently re-refinanced to a 3.8 variable loan. I just started as an attending and will pull in ~450k. After filling up my personal 401k, Roth IRA and a HSA… what should I do with my money? I feel like I could make more on the stock market, but at the same time I feel like I should just pay myself now and avoid the risk. What do you think?
Also, is there an penalty to re-re-refinancing?
No right answer. If you have a really hard time deciding, split the difference.
No penalty.
A magazine published earlier this month says between March and now, the percentage of the population having a perfect score has increased by 28% I know why, many of them have been paying to get it fixed. Yes try to consolidate your credit so everything can be on a perfect stand with a golden score (I’m talking at least 790) in 2 weeks and all negative items would be permanently deleted for good. i just got saved by Anold. He got my credit score increased up to 820 and from then my whole story changed. He could also get your debt cleared. you can also get your credit score fixed by contacting [email protected] or texting him on +1 831 612 2958. thank me later
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