Between the Global Financial Crisis and 2013, physicians basically couldn't refinance their student loans at all, which was unfortunate given that rates were typically 3-5% higher than mortgage rates. DRB (now Laurel Road) pioneered the way to student loan refinancing bliss. Laurel Road was also the first to offer a resident-specific product, so we all owe them a little debt of gratitude. However, there's some new competition you should know about. Be aware that I have a business (i.e. affiliate marketing) relationship with each of these companies and it adds up to a significant source of revenue for this site. If you refinance through my links, not only do you get a special deal, but I get paid too. Truly a win-win-win.
[Update 12/2020: Since this post was written, lots of changes have occurred, but the bottom line is that only four WCI partners are currently offering student loan refinancing to residents, SoFi , Laurel Road, Reset Refinance, and Splash Financial.
Should You Refinance As A Resident?
First, however, I want to remind you that refinancing doesn't always make sense and it is pretty much an irrevocable decision, so don't make it lightly.
Private student loans can be safely refinanced. Those aren't eligible for federal income driven repayment (IDR) and forgiveness plans like IBR, PAYE, REPAYE, and PSLF.
But federal student loans should not be refinanced unless
- You are 100% sure you won't be going for PSLF and
- Your refinanced rate is lower than your effective rate under REPAYE. Remember that REPAYE subsidizes the interest rate for most residents and generally lowers your effective rate to less than the rate you can refinance to.
There might be some other rare reasons to refinance (such as improved cash flow thanks to the low $0-100/month payments required by private lenders in their resident programs), but for the most part it's for private loans, although that might be changing soon given one of the new players in this space who is offering significantly lower rates than were available previously.
Remember that we're not talking about refinancing in your last year of residency after you have an attending contract in hand. That generally gets you the better attending rates and by then you know whether or not you'll be working at a 501(c)3. These programs I'm talking about today involve refinancing earlier in residency. Many of those who do so will also want to refinance again once they have an attending contract in hand.
Laurel Road
Let's start with a reminder of the original resident program. Laurel Road allows you to refinance as soon as you finish medical school. Readers report to me that they typically get fixed rates in the 5-5.5% range (much higher than the typical attending rate for a 5-10 year variable or fixed rate loan), but they enjoy $100 monthly payments until they finish. If you wish to do a fellowship afterward, you have to reapply for an “in-training” program and if not approved, would have to make “full” payments during their fellowship.
The WCI deal with Laurel Road is $300 back to you if you use this link:
Refinance Today With Laurel Road!
Link Capital
Link Capital was the second company to offer a real resident refinancing program. Unfortunately, they ran out of money after about 6 months and shut down for quite a long time. The good news is that they're back and refinancing loans for both attendings and residents. Instead of $100 monthly payments, with Link Capital they're $75 during residency. You may also get your rate lowered upon finishing training, which allows you to avoid the hassle of having to refinance your loans again upon graduation. Rates are determined by a mix of credit score and debt to income based off of projected income for your specialty.
If you decide to do a fellowship, you will just need to provide documentation of the fellowship and your payments can continue to be $75 a month.
In the event of death or disability, the loan is completely forgiven. But wait, there's more. Even if you have a co-signer the loan will be forgiven in the event of your death or disability, although not in the event of the co-signer's death or disability. But at least you won't have to find a new co-signer.
[Update 9/2018: We don't currently have a deal for WCI readers with Link Capital. I'm also told by someone who tried to refinance recently that they changed the income requirements to $70K for each applicant, an amount that really makes this no longer a true resident program since most residents make less than $70K.]
Splash Financial
Splash Financial has a special refinancing program for residents and fellows, which allows you to pay only $100 a month during training. They work with banks and credit unions to pre-negotiate the rates they offer. In 3 minutes, you can get pre-qualified rates and it won’t impact your credit score. There are no costs– no application or origination fees and no prepayment penalties.
The minimum borrowing amount is $5,000 and there is no maximum. If you refinance $100,000 or more, you will receive a $500 cash bonus. The bonus will be paid between 90-120 days after the loan closes and is available for first time customers only. Special offer for WCI readers only if you use the link below.
Refinance Today With Splash Financial
SoFi
SoFi is still the big kid on the block in student loan refinancing, judging by the numbers of you who have used them and note their excellent rates and service. I've been talking to them about refinancing loans during residency for years. They were hesitant at first because they were worried about their reputation. They were afraid people would refinance their loans and then get mad when they realized they were no longer eligible for IDRs and PAYE. They also noted the difficulty of packaging up and selling off loans to investors that wouldn't have payments made on them for years. But in the end, they've decided to go ahead and do it and have put together quite a competitive package. This is all brand new and will be available in mid October. [Update 10/11/17: This program is now available.]
Your in-training payments are $100 per month. You can apply as soon as you graduate from medical school, but you only get a maximum of 4 years (plus a 6 month extension) of those $100 payments. So if you're in a 5 year residency, you might want to wait a year before applying with SoFi. Any fellowship or extended training period must be agreed to at the time of refinancing, so if you later decide to do a fellowship you may find yourself making “full” payments during those years. If you switch specialties, your interest rate won't change but when the original expected completion date comes up, you'll need to start making full payments. If you need fewer than four years, you get an even better rate. The unpaid interest (trust me $100 a month isn't going to cover the interest) accrues, but doesn't capitalize until you finish residency. Your loans are effectively forgiven in the event of your death and you get a one year forbearance in the event of disability. But here's the best part about SoFi's resident program- they estimate your rates will only be about 0.25% more than what they would give you as an attending. That's dramatically cheaper than the other companies, so I'd be sure to include them in your search if the other terms are acceptable to you. Hopefully this competition will put some downward pressure on rates for residents from the other companies.
The WCI deal with SoFi is $300 back to you if you use this link:
Attendings Looking to Refinance
Now if you are an attending or other type of professional, you are eligible for better rates and a lot more options. You can learn more about those options here on my recommended student loan refinancing page, but here's a brief list of your options:
† Bonus includes cash rebates and value of free course. Borrowers who refinance more than $100,000 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 loans initiated from May 1, 2021 through October 31, 2021. Course must be claimed within 90 days of loan disbursement. To claim free course enrollment, visit https://www.whitecoatinvestor.com/RefiBonus.
Student Loan Refinancing Disclosures
Note that there are two new ones on the list–Splash! that you've already heard about and ELFI (Education Loan Finance from Southeast Bank), which you may not have but has come highly recommended from readers for a low rate. The special WCI deal for ELFI is $325 back to you. Low rates, lots of options, happy customers, nice bonus….what's not to like? Like most companies, no real resident program yet, but who knows? Maybe in the future. Even SoFi didn't have one for four years.
What do you think? Did you refinance as a resident? Why or why not? What has your experience been refinancing during residency? Which company did you refinance with? What rate did you get? Did you have a good experience? Comment below!
I essentially said this on a thread in the forum but I’ll say it again more succinctly here: Splash! is trash. It’s the whole life policy of refinance companies. The Martin Shkreli of student loan refinance companies.
For Splash!, in addition to the origination fees mentioned above, your interest AND capital are capitalized monthly during the $1/month period. From the Splash website:
“If you choose to make $1 per month payments, all unpaid principal and interest amounts are capitalized at the end of each month during the $1 per month repayment period…”
Perhaps a Splash! representative will take the time to address this directly but my interpretation is that they calculate how much you’d pay per month in REPAYE, subtract $1 from that amount per month and then add the expected, but unpaid, principal and interest amounts back to the loan as principal so each subsequent month the “new principal” amount increases considerably. This makes the company a ton of money while screwing you, the borrower, over like no one’s business.
Laurel Road explicitly discusses it’s stance on capitalization in it’s Student Loans FAQ:
“If I am a medical or dental resident, does my accrued interest capitalize while paying $100/month during residency?
No. Residents who accrue interest while paying $100 per month on their student loan will see their interest capitalize at the end of the reduced payment period and only when they start on a standard repayment term.”
Sofi and LinkCapital do not directly address the topic of capitalization during the reduced payment period so please inquire prior to refinancing with either of those companies.
There are very few refinance options for residents and fellows but please do your own due diligence.
Thank you for taking the time to comment regarding our product. We answered a few of your other questions in the forum.
Regarding loan capitalization, it is important to note that both capitalized interest and our origination fee are captured in our displayed rates on the site. Our rates are in APR format, which is a legal requirement to automatically include the fees within. So when comparing two different lenders the key number to compare is the APR which offers an apples to apples comparison.
As an example, if we capitalize fees monthly and show a 5.71% APR and another company does not capitalize and shows a 5.71% APR, you will pay the same amount with both companies. This is the same with an origination fee. It is factored into the APR.
Our loan assessment tool on our site factors all fees into it as well to help people transparently decide what is the best option for them.
Please feel free to call (1-800-349-3938) or directly message ([email protected]) our team with any additional questions about our product
I don’t understand this at all, if you capitalize monthly you must pay more over the year because the loan balance continues to rise?
Thanks for looking into that particular detail. The amount monthly capitalization will increase your debt is not some vague overwhelming number. It can be calculated quite easily. Say the loan is $200K at 6%. That’s $1K per month in interest. Let’s just equalize the payments for both Splash and Laurel Road to $0 a month during a 3 year residency. So in month two, Laurel Road will be calculating interest on $200,000 (another $1000 in interest) and Splash will be calculating interest on $201,000 (another $1005 in interest.) Not exactly monstrous.
Even 3 years later, Splash is only calculating interest on something like $240K, so your loan goes up by $200 a month more with Splash’s terms than Laurel Road’s. Is it better to not have it capitalize so frequently? Sure. All else being equal, would it be better not to have it capitalize at all? Sure. But “trash?” Not quite sure that particular term of the agreement puts it into the trash pile if you have no better option.
Worth being aware of? Absolutely. Worth trying to get Splash to change it by publicizing it widely? For sure. Hopefully a few months from now it’ll be different.
I’m so happy to say that thanks to WCI, this article no longer applies to me! Last week I paid off the last of my student loans (3 years after finishing residency)! But I did refinance twice along the way with DRB and that definitely helped save money on interest. Between living relatively modestly (but still better than a resident) and moonlighting in addition to my main job, I got $210k on loans finished off! Thank you WCI for doing what you do!
Great job! It’s important to realize that the goal is to pay them off, not “manage” them. Refinancing allows you to less money toward interest and thus more toward principle, speeding up the process a bit.
Last year of fellowship, have refinanced with Laurel Road earlier with a variable rate currently at 4.7%. Have a job lined up and going to refinance again. I was also interested in applying for a no balance transfer card and maxing that out with as much of the loan as I can. When would you recommend I apply for these, and in what order? I’m thinking refinance first, credit card second as the credit card application will affect my credit score. Thanks!
Seems wise. If you apply close together (same day) the credit card application may not even notice the refinance pull.
I did a DRB resident refinance before repaye. DRB was fair but overwhelmed. But I’m thankful for their pioneering (despite the government destroying their product).
Last year I refinanced with Elfi as a 1st year attending independent contractor (so no guaranteed income). Great rate and service. 3.5% 5 year fixed for me. It’s the old edsouth bought up by southeast bank. In other words they’ve dealt with student loans since the 90s and don’t have startup issues since its just a rebranding.
FYI both drb and elfi use Mohela as their servicer so my loans only changed in name only and the website is easy to use.
I am only able to find minimal information on churning these bonuses, anyone have a good thread or advice? I have a remaining balance of about $12k and don’t see any reason I couldn’t apply to refinance at one get the bonus and then refinance at another one get the bonus, and so on. Am I missing anything?
Yea, a lot of them have a minimum of $25K or so. They don’t want to do all that work for no reward.
I attempted to apply for refinance with Sofi today for my husband’s student loans as he’s a 3rd yr resident. I was told that he must have a future attending job contract in hand in order to apply for the resident student loan refinance option. Very disappointing as I was initially very excited by the above post.
I had a similar experience trying to get a quote from Sofi today. I was told I needed to have a co-signer which was not the case with Link Capital (or DRB) when I refinanced 2 years ago. I tried to get a concrete answer of whether they refinanced to residents with 4 years of essentially deferred payments as described above (without a co-signer) and I never got a reply. In re-reading the post, WCI says it will be available mid-October, maybe Sofi can give a date for when they’ll start considering resident refinancing?
I didn’t write Mid-October, it was supposed to be late September, so I suspect my staff made that change in the last few days since publication (probably after SoFi emailed us). Sounds like there was a delay in implementation. I’m sorry. I was initially told Mid-September, then late September. Sounds like it’s now mid October.
Thanks WCI, I really appreciate all your efforts and sharing any new information regarding loan refinancing. I don’t find it to be a big deal if Sofi has to delay things, but I was pretty turned off by their customer service as they stopped responding to my email questions and didn’t provide any information regarding the delay. Maybe they’ll do better in the future.
So sorry for the disappointment. After the post published, Sofi notified us that the resident product wouldn’t be ready until mid October. Please check back then.
I’d call back. Unless they delayed implementation (which I don’t think they’ve done, although I’ve had minimal data coverage the last 4 days) you’ve probably just run into someone that isn’t familiar with this brand new program.
My husband and I both applied for DRB refinancing a couple of years ago in early residency (before Repaye was an option) and we have been quite pleased. DRB (Laurel Road) is a great company. Our rates went down to 4.60% and 4.75% which was significantly better than the government rates. Thanks to your article, we are considering re-refinancing with SoFi (our new rates will be around 3.88%). So glad SoFi is finally offering this to residents!! I talked to SoFi today and they are considering resident refinancing as long as you already have a job lined up after residency. They did not mention the need for a cosigner. Thanks for this great post, WCI.
I am also very interested in the SoFi refinance with similar questions as above. I applied with DRB and refinanced as in intern and seemed to get in just under the window here others had some difficulty so I am thankful for that. I did elect to refinance on the variable rate which has been a good choice though it has climbed some since inception.
I would like to see where SoFi lands as I am now under two years from completing training. I contact SoFi today and the representative on the chat line kept “thanking me for my patience,” and “researching it,” but ultimately gave a phone number to call. I did not have time to deal with that today. A concrete date from SoFi would be great!
Hi JayDoc24, if you click the SoFi picture-link in the article above and then click the “Find My Rate” in the top corner, all you need to do is put in some basic info and you get an instant quote with the rate they will offer you (it is a soft credit pull, so does not affect your credit score). After getting my interest rate, I called to clarify since my monthly payment was not listed as $100 during residency. They said after I submit all my paperwork and verification that I have a contract for a job after residency, then they adjust the rate to $100 during residency. Hope this helps!
Hey Married EM Residents, thanks for the reply. I got the impression from the WCI write-up that SoFi would refinance residents without a pending contract. Hence this sentence, “You can apply as soon as you graduate from medical school, but you only get a maximum of 4 years (plus a 6 month extension) of those $100 payments.”
I actually have less than one year of residency left and one year of fellowship after that (I find out where tomorrow!). However, I do not yet have a contract in place as of yet. I will obviously be under the 4 year window.
It seems like you should have $100 payments without having a contract in place based on the writing above. Ultimately I want to do some comparison shopping on my rate and see where they land on this estimate that the rate they will give me today (or mid-October) will only be 0.25% more than the attending rate. Hopefully that makes sense.
Hey JayDoc24, when I was applying to refinance through SoFI, it did specifically ask that I had been offered a contract, so I think you really do have to have one in hand in order to apply with them as a resident. Perhaps there is something else I don’t know about, but to the best of my knowledge you have to have an attending job lined up. Hope that clarifies. Best wishes in your search. DRB has been wonderful, too.
That’s correct, but I found out after publication that implementation of the SoFi program has been delayed a couple of weeks. I’ll post an update when it’s ready to go.
Will they contact you when it is rolled out? I think there are quite a few of us eagerly awaiting this program.
I think SoFi has already implemented the resident program as I am in the process of applying with them. They are offering a $100/month payments during residency (as long as you have signed a contract). Note: if you are an ACEP member they offer a 0.125% discount as well (and this is in addition to the 0.25% autopay discount).
I emailed them asking if the offer refinancing for residents and this was the reply, “As of right now, SoFi does not offer a medical resident product. ” I just got this reply from them.
Hi Neurores. I have talked to them multiple times via phone about refinancing my student loans (and I am a resident and they know that) and they ARE currently offering refinancing for residents. Not sure why they sent you that reply. Perhaps you should call and talk with them?
I got an email a couple of days ago. Soon, but not yet. Give it another week and I think they’ll be there. There is a little confusion in that you can get their “attending” product as a resident with an attending contract in hand. That’s not what this post is about.
Thanks for the clarification. Did not realize there are two different products we were talking about. 🙂
Not sure if that ACEP deal is in addition to the WCI bonus money. Most of the time with those deals it’s one or the other. So either ACEP gets paid and you get the ACEP deal or I get paid and you get the WCI deal. Maybe SoFi will give you both, but I doubt it.
Yes.
You should note that when you go provide your information to Splash!, they just put you on a waitlist as apparently they’re not lending right now. Of course they don’t tell you this til after they collect your info.
Hi Matt, thanks for visiting Splash! We are expanding our footprint and currently offer refinancing in 31 states, representing 85% of the resident/fellow population. For those who are not within a state we currently operate in, we have created a waitlist. We apologize for the inconvenience. We will work on the messaging on our site to better communicate our eligible states.
Can I get a list of those 31 states to update the post with?
Yes, we will send.
Initially refinanced as an intern with Laurel Road/DRB (sofi as predicted rejected me). After seeing this post, I tried applying yesteday with Sofi and their best rate is essentially the same as what I’m getting with Laurel Road. I tried bringing up the new program when calling but didn’t move the meter for the interest rate.
Thank you for sharing this article. This will inform medical students of another option or opportunity for acquiring a student loan.
If you are a recent graduate do not waste your time applying to Link Capital. They require you to be a PGY2 to be eligible for resident refinancing. It sure would be nice if they clearly stated this requirement somewhere on their website.
I had a similar experience as I was just applying for refinancing as a resident this week. Currently, LinkCapital requires you to have your attending contract to be able to refinance. I was frustrated as they did not mention this before my spouse (cosigner) and I submitted the initial application and they ran a credit check.