Earlier this year, I asked readers to share their experiences refinancing their student loans for a post. The response was overwhelming — I had ten times as many responses as I needed. So I decided to do it as a multi-post series. This is part 2. Check out part 1 published back in April if you missed it. As a reminder, I asked readers these questions:
1) Are you done with training, will you graduate soon, or do you have years of training left?
2) Which companies did you apply to and why?
3) Who did you eventually refinance with and why?
4) What loan did you choose (fixed vs variable, 5 vs 10-year etc) and why?
5) What tips do you have for someone considering refinancing?
Get a Clear Salary Verification Letter When You Sign Your Employment Contract
Reid, an academic first year attending, only applied to SoFi and refinanced with them, but ran into a few hassles. He chose them “for the referral deal, and because I had vaguely heard of the company. The various companies looked pretty similar on paper. Once I started the process, I felt like I had spent too much time on the application for it to be worth shopping around to multiple companies.” He obtained a 5 year fixed loan at 3.35% after hemming and hawing between variable and fixed for a while, but went with fixed “because he never wanted to deal with this again.”
Reid ran into issues getting his salary verified due to the way his contract was structured. “My employer pays me a low base salary and a much larger clinical supplement, which is guaranteed compensation but does not count for benefits. As a generalized example, if my total salary is 200k, only 80k is “base” and 120k is “clinical supplement”. This is a cost-saving measure since all of my benefits are based off my base salary. For instance, if I filed for my employer disability insurance I would get 66% of my low base salary…When SoFi wanted to verify my income, all the auto-generated forms through our HR department would only spit out the base portion of my salary. Sofi was not thrilled about loaning money to a doc at a good rate with a low base salary. When I provided a signed copy of my employment contract to SoFi, they wanted to make sure that “clinical supplement” was guaranteed, which wasn't spelled out explicitly enough for their liking. Eventually, they asked for a year's worth of paystubs, which for a fresh attending wasn't helpful. This all culminated in emails with the SoFi CEO… and a custom letter written from the higher-ups in my hospital's HR dept. What a headache! They did eventually approve the loan, and I've been very happy with the service since then.”
His advice is to “get a clear salary verification letter written when you sign your contract, as it may come in handy for a variety of financial tasks, like refinancing or applying for a doctor mortgage.”
Refinancing is Mandatory if You're Paying Back Your Student Loans
David Michael Fredric Anderson is an attending who applied and refinanced only with SoFi and chose a 10 year fixed loan for “a good mix of liquidity and acceptable rate” and feels like he can always pay extra if he wants. He recommends you shop around (even though he didn't) and advises there is no reason to pay 6.8% interest if you're actually paying off your loans.
Nicole Kohan is an optometrist who refinanced with SoFi “because I'd actually heard of them and they offered good customer service and rates.” She went for a 7 year fixed loan and recommends “Do it sooner rather than later. It's something that I procrastinated with a bit, but once everything was done and payments were automated, it's easy. I also got a small discount on the rate because I set up the automatic payments, which was nice.”
Patrick Hussey is a PGY4 anesthesia resident in NYC who applied to SoFi and Laurel Road a while back. He was declined by Laurel Road felt his application was on hold for multiple weeks at SoFi, so he “refinanced” his $80K in student loans through his parents' HELOC. It was a 5 year HELOC at 3.75% and he has already paid it off. His recommendation is to “just do it” since he dropped his rate from 6.9% to 3.75%.
Take The Lower Rate
A new attending applied to SoFi (“because their advertising is omnipresent”) and Earnest (“because a friend had refinanced with them”) and went with Earnest because the rate was lower (3.5% for a fixed 7 year). Due to the low rate, he actually revised his original plan (pay off his $240K loan in 2-3 years) but still plans to pay it off at least a year early. He liked Earnest's “slider tool” that allows you to see the APR for a given payoff term length. Since there was a special rate for 7 years, he took that. He also didn't want to overcommit to a short loan length with a baby on the way and a 15-year mortgage.
He notes that the amount you're originally approved for may differ from your actual debt load due to uncapitalized interest, so watch out for that. He says “Overall, this was a pretty low-stress undertaking…I thought it would much worse (piles of papers like mortgages.)
Dual Couple Uses Dual Companies
Two newish attendings (rad onc and peds GI) had refinanced their $190K and $210K (half of which is on track on PSLF) respectively. He applied with ALL the companies on the WCI site, at least up to the point where they do soft credit pulls. He ended with Laurel Road and she ended up with Earnest chosen purely on rate. They plan to pay off their loans in 2-3 years so went with fixed year loans due to “comfort of predictability” and worry about “worst-case scenario…given we already had large monthly payments.”
They recommend “do it early in your attending life, if not sooner if able, to slow down interest accrual and to get away from FedLoan and their constant screw-ups.”
A private practice attending applied only to and refinanced with First Republic because “their rates were far and away the best.” She obtained a 15 year fixed at 2.95%. She notes “I would have preferred a shorter term, but my husband and I have a lot of combined school debt, and this is the only term they would approve. Once my husband’s loans are paid (he has loan repayment through a federal grant—will be paid in 4 years), we will throw more money at my loans.” She recommends that you consider First Republic Bank if you're in an eligible location and that you refinance ASAP if you aren't planning for PSLF. “I'm mad at myself for waiting 1.5 years to do it.”
“Saildawg” from the WCI Forum, applied widely 3 years ago when he became an attending – Credible, Laurel Road, Earnest, SoFi, and Lendkey. The first time he refinanced with Laurel Road (5-year fixed), and then refinanced the remaining $80K two years later with Lendkey (5 year variable) “for the variable rate and another sign-up bonus.” He did a fair amount of complex credit card and gift card “hacking” in order to get even more benefits out of this whole process (sent me a three-page article about it.) He recommends “Make it a priority to pay off your student loan quickly. Refinance for the best rate and signup bonus. Apply to multiple companies as their rates can be quite different.”
You Can Use Multiple Companies
An emergency physician attending applied to CommonBond, Earnest, Laurel Road, Lend Key, Credible, SoFi, and Link Capital, noting it was “very easy to obtain estimated rates based on a soft credit pull.” He has refinanced multiple times and due to his large loan balance ($450K) he actually ended up with loans with multiple companies. The companies didn't like the severely lopsided debt to income ratio and so didn't allow him to put all of the loans into one big loan. He also discovered that he could get lower rates with smaller loans. At the time he emailed me, he had the following loans:
- CommonBond: $30K, 5-year variable, has increased from 2.67% to 3.37%
- Earnest: $192K, 7-year fixed, 4%
- Laurel Road: $173K, 15-year fixed, 4.75%
With his current $5K/month payments, he expects to get out of debt by 2026 but hopes to make more money sooner and pay them off quickly. His tip had nothing to do with student loans but more with income – “Beware of partnership buy-ins, whether sweat equity or cash” as they impede your ability to pay back loans, especially if you give up significant income to be in that partnership track and then it doesn't work out.
Take Advantage of Trainee Program
Chris Tang is a brand new pediatric surgeon who refinanced just a few months ago as a fellow. He only applied to SoFi “due to the good reviews and the recommendation of a friend.” He was very happy with the trainee program ($100/month) and the 6-month “grace period” after attendinghood where you can continue to make trainee payments. He took a 15 year fixed, because between his wife and himself, they owe $650K and his income will be ramping up slowly. They were still able to knock about 2% off their previous rates. He recommends “Don't be afraid to refinance! I was basically just going to suck it up after training with Navient, but my co-fellow said he had a really easy time refinancing, so I figured why not. I was in forbearance before because Navient didn't have the grace period, so all that interest was just racking up while I was in training. At least this way, I get a few months after graduating fellowship to get my financial feet under me to start paying down the loans.”
Adam Powell is a new anesthesia attending who refinanced twice during training, as an intern into a 4.25% 15 year fixed and later as a fellow into a 2.9% 5-year variable. He went with Laurel Road after applying there and with SoFi (“slim pickings back then”), choosing Laurel Road for the best rate and the low payments. He says “Do it ASAP, I've saved over $20k in interest alone during my training, and that's before any compounding.”
PAs Can Refinance Too!
A PA and his sonographer wife refinanced their $140K/$30K in loans with SoFi first and then Laurel Road. They currently have a 2.99% 5-year variable and a 3.5% 5-year fixed. He actually recommends NOT combining all your loans into one big loan because it gives you more options to refinance with smaller loans. He actually sent me a screenshot from SoFi of the rates they were offered for variable loans.
Happy With The Variable Rate (and the Bonus)
A flight surgeon's wife wrote in to tell about her experience getting her husband's loans refinanced and paid off. They applied to CommonBond, Link Capital and Lendkey due to their big bonuses and their answers in a WCI post. They went with CommonBond because “they didn't require us to open a checking account, they were an easier website to work with, and we liked their mission statement.” They went with a 5-year variable due to the lower rate. They paid it off even faster than expected (house sold a month later and they used the home equity to pay off the loan, but were happy to get the $500 bonus). They recommend “Get all the relevant documents together in a file on your computer and then use the momentum to apply conveniently to several with good bonuses and rates.”
Refinancing Struggles from Nevada Orthodontist
A Nevada orthodontist ran into severe difficulties. He found in Mid 2016 that only Laurel Road would refinance in Nevada because of a law that required a physical building, but they only offered him a 7% 15 year fixed despite excellent credit, due to a high balance ($500K+) and some other debts. So he went to Credible who connected him with a Massachusetts bank who could refinance in Nevada. He ended up with a 4.95% 15 year fixed. When asked for tips, he says:
“I understand Sofi can also refinance in NV now. I felt like I was at a disadvantage because I had just become a 1099 employee who, at the time, had recently bought into a practice and had a very large amount of student debt. I was told because of the high amount of student debt I was limited to who would refinance me, Laurel Road and Credible told me that. My advice would be to refinance while still a W2 employee if you plan to buy in as a partner soon. You could also refinance only a portion of your loans at a time rather than all of them as this could open the option to getting a better rate because of less risk with the bank or could open up the possibility to more banks willing to take you on, if you lived in a state with strict refinancing laws like I did.”
Refinanced Again With The Same Company
One doctor refinanced in October of his senior year of residency, choosing Link Capital due to the personal attention of a representative who called him up a couple of days after he started but didn't complete an application. “She was knowledgeable and detailed in her responses to my questions. It was this coupled with lower rates that made my decision fairly easy.” The residency loan was a 7-year fixed at 4.42% in late 2015. He then refinanced again with Link Capital as an attending, a 5-year fixed at 3.62%.
About the fixed vs variable decision, he says, “I probably could have (and should have) selected a variable loan, but I enjoy the comfort of knowing exactly what my obligatory payment will be and can choose the add extra payments as I see fit. Mathematically, I would have come out slightly ahead with a variable loan as I am on track to finishing paying off the loans in about 2.5 years from residency graduation.”
He recommends, “Apply to multiple companies at the same time (at most within 30 days for all of them to ensure only one hit to your credit). Once you have the rates available to you, run the calculations to see how much interest you are likely to end up paying in terms of real dollars. Once you know how much each loan will cost, you can make a choice based on cost and other factors, like the ability to make your monthly payment using a credit card so you can get cash back or earn points along the way. (Hint: You can do that with Aspire Loan Servicing, which is the company that LinkCapital sends your loan to for servicing.)
Experiences Can Vary
Lots and lots and lots of readers went with SoFi, Laurel Road, Earnest, and CommonBond, so I deliberately went looking for some emails that mentioned some of the other lenders. I find it ironic that some readers find one company to be a godsend while other readers think the same company is the devil! I'm going to use ELFI in this example, but I've seen this with just about all of the companies at some point:
A young attending who graduated with $270K in loans “did a soft credit pull with all the companies you listed: ELFI, Laurel Road, SoFi, Link Capital, Common Bond, Credible, Link Capital, Splash and reached out to First Republic but was outside their geographic area. “After the soft credit pull gave me rate estimates, I only applied to ELFI, Laurel Road, Common Bond, Link Capital and SoFi.” With all that effort, you won't be surprised to learn he played the companies off one another. This is what he had to say:
Laurel Road had by far, the easiest application and fastest turnaround time with a competitive rate. Earnest and SoFi also had easy and straightforward applications but slower response. ELFI was AMAZING with their customer service and actual persons worked with me. Common Bond was complicated and Link Capital was impossible. Their system to upload documents is so convoluted, too generic to give any direction, all communication was a stock email, not helpful. I would have been reluctant to go with them even if they did give the best rate. I would say it was infuriating working with Link Capital. Even over the phone, I would be redirected to various departments and then referred back to the website. In the end, Earnest, Laurel Road and ELFI gave me the best rates. I emailed all three and asked if they can beat their competition. Earnest claimed they would but did not. Laurel Road lowered their rate by 0.03% and ELFI by 0.08%. I went with ELFI. Of note, Sofi said they would only “match” another company's rate but not beat it.
He went with a 7-year loan at 3.04% because it “gave me a good combination of a low rate and a manageable minimum monthly payment. Going with a 5 year would have required a higher monthly payment that I don't want to commit to every month. I plan to overpay throughout the year and be finished sooner than 7 years.” He recommends
“Refinance as soon as you are out of residency, to a manageable monthly payment. Gather all the documents needed and apply all at once to reduce the credit pulls. Email and call with questions. ELFI was outstanding in that regard. I was assigned one person to handle my application, who knew me and my situation. She would send me personalized emails, phone calls and when I had a small IT problem with their system, even texted with me to help resolve it. I am very happy that I chose their company as I look forward to dealing with them in the future.”
Then I get this email from a different doc:
I have applied to every company. Kind of a pain, but worth it. That is until you get to ELFI. It was positively the worst online application for anything I have ever done. I mean like AMCAS effort. Customer service is completely uninformed and the entire webpage is incredibly cumbersome. Gives you one rate and then a dramatically different one after you go through six more steps than any other lender's appt.
I have no idea how to reconcile those two experiences. The good news is that I get fewer and fewer customer service related complaints/comments every year despite having more and more readers refinancing. So I think every company is improving and competing as they go along. I've got another 100 of these emails, so perhaps we'll have a part 3 in a few months.
- Refinance early and often (unless going for PSLF)
- The more effort you're willing to put in the more you're likely going to save
- Consider the pros and cons of having multiple vs a single loan
Here are the current WCI recommended lenders and their associated deals. Thank you for supporting the site (and getting cash back) by going through these links when you refinance:
Fixed 2.58%-5.99% APR
*Variable 1.97%-6.82% APR
Fixed 2.83%-6.74% APR
Fixed 2.54%-6.25% APR
Fixed 2.95%-8.90% APR
Fixed 2.55%-9.10% APR
Fixed 2.50%-6.00% APR
Fixed 2.98%-5.89% APR
Fixed 2.99%-6.64% APR
Fixed 2.95%-4.20% APR
Fixed 2.95%-7.63% APR
† 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.
What do you think? Have you refinanced your loans? Why or why not? Who did you use? What rate and loan did you get? What was your experience like? Comment below!