By Dr. James M. Dahle, WCI Founder
You may have decided to refinance your medical school loans in residency. For private loans, this is usually a no-brainer. Not only do you get a lower rate, but you also get to benefit from the $100 per month payments during your training offered by the four lenders in the table below. You also get hundreds of dollars in cash back if you refinance through the links on the White Coat Investor website, and if you refinance at least $60,000, we give you our flagship Fire Your Financial Advisor online course (a $799 value) for free.
For federal loans, the decision is not nearly so easy. The default choice, in fact, is probably to not refinance them until the end of residency so you can get the benefits of the Income-Driven Repayment (IDR) programs such as the Revised Pay As You Earn (REPAYE) subsidy, IDR Forgiveness, and/or Public Service Loan Forgiveness (PSLF). However, there are situations when it does make sense to refinance federal loans in residency. Mainly, these are people who are not planning to go for any type of loan forgiveness and are receiving little or no REPAYE subsidy due to their own or their spouse's income.
Once you have decided to refinance your student loans during residency, you can follow this step-by-step guide.
Step 1 – Decide What Your Financial Goals Are
What are you trying to accomplish with regards to your student loans? Are you trying to pay them off as quickly as possible? Are you trying to minimize the amount you pay? Or are you trying to improve your cash flow (i.e. lower your monthly payment) so you can put your hard-earned dollars toward a more important financial goal for now. Perhaps you are trying to get some cash or even a free online course. Refinancing can assist with all of these goals, but it is best to begin with the end in mind.
Step 2 – Get Your Credit Score and Credit Report
When you refinance your student loans, you are dealing with private lenders. Unlike the federal government, which will lend hundreds of thousands of dollars to you if you have a pulse and a medical school acceptance in hand, private lenders expect to be paid back. They want to make a profit off your business. So, they care about your debt-to-income ratio, and they certainly care about your credit score. They want to know you are going to pay them back. Just like when you go to borrow money for any reason, you want to have as high of a credit score as possible. Find out what your score is.
You can often find out your credit score for free using deals offered by your credit card company or by signing up for a service like Credit Karma, Credit Sesame, Credit.com, or WalletHub. You may end up paying something to get the score itself. However, the credit reports from the three reporting companies (Equifax, Experian, and Transunion) are free to obtain once a year at the appropriately named and government-authorized AnnualCreditReport.com. One of the best ways to ensure a great credit score (aside from the rather obvious path of borrowing money and then paying it back as agreed for years on end) is to make sure the information in your credit reports is actually accurate.
Usually, a score of 740-760 or higher is good enough, but it is possible to refinance with a lower score. The higher the score, the better your interest rate will be and the more options you will be offered.
Step 3 – Request Quotes from the Best Student Loan Refinancing Companies
Here at The White Coat Investor, we have been partnering with all of the top student loan refinancing companies for years. However, they do not all refinance your student loans during your residency and fellowship. As you can see in the chart below, only four of them are currently refinancing loans for residents.

Variable 4.54% - 11.72% APR
Fixed 3.95% - 9.19% APR
† Bonus includes cash rebates and value of free course. Borrowers who refinance more than $60,000 in student loans using the WCI links will be enrolled in The White Coat Investor’s flagship course, Fire Your Financial Advisor for free ($799 value). Borrowers will still receive the amazing cash rebates that WCI has negotiated with each lender. Offer valid for loan applications submitted from May 1, 2021 through June 30, 2023. Free course must be claimed within 90 days of loan disbursement. To claim free course enrollment, visit https://www.whitecoatinvestor.com/RefiBonus.
You should apply with all four of these companies. As a general rule, you can get an initial quote with just a soft credit pull (which does not lower your credit score). Each of these companies offers $100 a month payments during your training, although the details vary slightly. For example, some make you reapply if you enter a fellowship, and some will even extend those $100 a month payments for six months into attendinghood. It is quick and easy to get those quotes and even quicker and easier to get your second (or third, or fourth) quote once you have gathered the paperwork necessary to get one.
We obviously have a business relationship with each of these companies. If you refinance your loans through these links, you are helping to support this site and you are also getting hundreds of dollars in cash back and our Fire Your Financial Advisor online course for free. It's really a win-win-win for everybody involved.
What Information Do You Need Ready for Loan Refinancing Applications?
There are basically three pieces of information the lenders care about.
#1 They obviously care about your credit, but they don't ask you how your credit is. They go to the reporting companies to get that.
#2 They care about your income. If you are an employee, you will need to provide pay stubs demonstrating your income. If you have other significant income (investment income or business income), you may also want or need to provide proof. If you are self-employed, it can be a little tougher. Ideally, you have two years worth of tax returns demonstrating a high, stable income. If you do not have that, they may not refinance you at all or may simply offer you less ideal terms, such as a higher interest rate.
#3 They care about your debt, including all of your student loans as well as other debts. While they will check that information against your credit report, they also usually require you to provide some information about each of your student loans. So, you will want all of your student loan information handy when you apply. Every year, the process gets simpler and some people can apply in just a few minutes using only their smartphone.
Step 4 – Compare Each of the Quotes
Next, put all of the quotes you have received next to each other. For the most part, you are simply comparing interest rates. However, if one lender or another didn't offer you the same terms, you may need to take those into consideration as well. Obviously, the interest rate on a 10-year loan is going to be higher than one for a five-year loan as the lender is taking on more risk. So make sure you are comparing apples to apples.
Keep in mind the other benefits of one company over another, such as how they might treat you in the event you become delinquent, what happens to your loans if you die or are disabled, and when you have to start making “full” payments instead of those little $100 per month payments.
Finally, you may want to compare the cash back bonus you will get by refinancing through The White Coat Investor links. They are not all the same, and one lender may give you more cash back than another.
Step 5 – Determine How Much You Plan to Pay Each Month Toward Your Loans
Next, determine how much you are willing to put toward these student loans each month, both during residency and once you are finished with your training. Most residents are probably perfectly content to put just $100 a month toward them. While the loan balance will continue to grow, a resident often has a better use for the money.
However, as an attending you know you will eventually have to pay these off so you might as well get started. In fact, I encourage attendings to live like a resident for 2-5 years after residency primarily so they can get the student loan monkey off their back early in their career before they get used to the big bucks. While it might require some guesswork (and may not even matter since you'll probably refinance your loans again as you finish your training), I would encourage you to project out how much you can put toward those loans each month as an attending.
Step 6 – Select the Lender That Provided the Lowest Interest Rate and Shortest Repayment Length That You Can Afford
If you have decided you can put $5,000 a month toward your payments as an attending, you don't want a loan that will require you to put $10,000 a month toward them. You want the lowest interest rate you can get for the repayment length you need. I would encourage you to be aggressive here, though. Many white coat investors have had great success with a five-year, variable student loan. By committing to being done in less than five years, it focuses your mind and your financial power on the task at hand. The variable rate is also usually lower (and can decrease from there), and most attendings committed to a five-year (or less) payoff period can weather the consequences of rising rates just fine.
Step 7 – Proceed Through the Application with the Selected Lender
Once you have chosen a lender and a loan, you can finish the application. It's a simple process, and within a few weeks, your old lender will be paid off and you will be receiving all the benefits of refinancing including:
- A lower interest rate
- Fewer loans to keep track of
- Better cash flow
- Better service from your lender
- Cash back
- A free WCI online course
Refinance your student loans today!
What do you think? Did you refinance your student loans during residency? Who did you use? How was your experience? How do you think refinancing early helped you reach financial goals? Comment below!
[This updated post was originally published in 2018.]
Refinancing loans during residency only makes sense for a select few. If you are going for Public Service Loan Forgiveness then you can’t refinance your loans! If you aren’t sure yet then you still shouldn’t refinance until you have a decent idea of what you are going to do after residency.
You can’t reverse the refinancing and get yourself back into a government program.
The only people that I can think this is a good idea for are those with really low loan balanaces who wouldn’t benefit from PSLF since they would pay off the loan amount before the 10yrs are up. Even if you are going outpt there is a fair chance that you might still work for a hospital and benefit from their non profit status and qualify for PSLF.
Anyone else know who would likely benefit from residency refinancing?
It makes sense for all your private loans and for public loans for anyone who knows they won’t be going for PSLF AND for whom the refinanced rate is lower than the effective rate under REPAYE. Hard to say what the percentage is there, but it rises as people get closer to attendinghood and realize they won’t be in a PSLF qualifying job.
It might be a dumb question but need major advice. I am a MS4 and God willing will be starting peds residency next year. I’ve been maxing out my subsidize loans and with the extra money been “trying” to invest it. Was hopeful and lucky and during the first 6 months made 30%. Now I’m at -10% total, holding my shares and being patient. Would it be better for me to stop playing with that money and funnel it all to paying my loans back. I know there is a risk on investing but I feel like I could make the best out of having this extra money work for me somehow (about 50K, my total debt is 200). My avg interest is 7%. After listening to your podcast I feel dumb for doing it but I still feel like I could use my money to perhaps earn 10% a year, cover my interest and make some. Any suggestions? Thanks for all the help in advance. Trying to plan accordingly, waiting for MATCH to see if I can do loan forgiveness or pay as much as I can during residency.
Truly thankful for all that you do, and as a student I’m so glad there road has been paved by you.
If you haven’t already, you might want to start a thread in one of the forums.
This reply was to a comment that seems to have disappeared.
FYI to all those considering re-financing through Laurel Road. I just finalized my refinance with Laurel Road (was previously with CommonBond) and contacted LR to ask how/when I will receive the $300 bonus for refinancing through the WCI link. They informed me that if you receive any interest rate reduction on your loan (such as the 0.25% interest rate reduction for being an AMA member), then you are not eligible for the $300 bonus. No where does it say this in any of the LR disclosure forms. The representative claims that this is their “policy” but is unable to produce any documentation supporting this.
I understand that 0.25% interest rate reduction over the life of a loan will result in greater savings that $300, but no where was it made clear that these are mutually exclusive discounts. Overall my customer service experience with CommonBond was exceptional, while Laurel Road has been quite disappointing (even prior to the above issue). Just something to consider when deciding between refinance options.
For WCI, if you can confirm that the mutually exclusive nature of the LR discounts is actually true, then it might be worth noting this on your blog posts that advertise LR refinancing for full disclosure.
This is the way all companies work. If you choose to support the AMA instead of WCI, the AMA gets paid and I don’t. If you wish for a discounted rate instead of cash back, let me know and I’ll see if they can provide a matching rate through me. Obviously which works out better depends on the size of your loan and how long you will carry it. But thanks for stopping by to let me know you prefer to support the AMA over me. 🙂
Hey now… when I refinanced I specifically sought out your website so I could go through the WCI link and support WCI (while also supporting myself with what I thought would be a $300 bonus). So you’re welcome. Also my CommonBond refinance was through WCI links to. So you’re double welcome! 😉
Strangely, I didn’t even know I was an AMA member and I have no idea how LR found out I was an AMA member. I didn’t even know there was an interest rate reduction available through AMA until they magically added it to my disclosures form.
From a strict dollars and cents standpoint, a 0.25% interest rate reduction is going to beat a $300 bonus probably 9 times out of 10. Unless of course you have a very small loan balance and a very short refinance term. It might be worth seeing if they would offer an option for either IRR or cash bonus when refinancing through WCI?
Now that’s different. Let me reach out to Laurel Road and see if I can get paid. But as far as you’re concerned, they’ll make you choose between one or the other and it appears that in your case, the interest rate reduction is a better deal so I don’t think I’ll be able to get you any cash.
So I reached out and did get paid for referring you so I’m happy for that. I’m also happy you got the better deal but I’m sorry you couldn’t have both deals. I’m actually really glad they offered that to you. I would say that was actually really good service from Laurel Road, not bad! Either way, I hope you are able to get rid of your student loans ASAP.
And thank you for supporting the white coat investor. Twice. 🙂
You make a good point. I guess it was the lack of disclosure/transparency on Laurel Road’s part (and perhaps my lack of understanding regarding standard refinance procedure) that had me irked. I’m glad that you’re still getting credit for the referrals that you generate even if they result in a different promotion being applied. Thanks for your support!
My wife just matched today – when is the earliest we can apply to refi (for those vendors that support residency refi’ing)
I think you can do it very soon. I suppose you need a contract in hand maybe? Dunno. Why not apply and see what happens?
yeah wasn’t sure if any credit hit in doing it numerous time – one of the vendors (splash) said signed contract
Dan,
You can receive a preliminary quote from the private lenders where it won’t impact your credit. After you’ve found the lender who provides you the lowest quote (best rate) and secured a rate with them it will bring your credit down a little.
Andrew StudentLoanAdvice
They’re usually pretty good about telling you when you get a soft pull vs a hard pull.
Thanks for the article and links. I refinanced my student loans recently through a link on this page. The cash bonus was very nice. How do I go about signing up for my free “Fire my financial advisor” course?
See the little link below the chart? Just click on it and fill out the form.
https://www.whitecoatinvestor.com/refibonus