What Are the Best Tips for Paying off Medical School Debt?

Kristie Lorette
Kristie Lorette

The best tips for paying off medical school debt starts with only borrowing what you need, so it keeps the payments as low as possible. In addition to only borrowing the amount that is needed, it is possible to pay off medical school debt faster by avoiding private loans and going for federal loans. Two more ways to pay off medical school loans are to consolidate the federal loans when the interest rates are low and look into repayment programs that base the payments on the amount of income earned, or income-based payments.

Depending on where a student seeks an education, it is possible to graduate with a substantial amount of student loan debt.
Depending on where a student seeks an education, it is possible to graduate with a substantial amount of student loan debt.

Figure out exactly the amount required to complete the medical school program and only borrow this amount. Lenders sometimes try to lend money for students to live on or for extra money that goes beyond what is needed to pay for tuition, books and other equipment required to finish medical school. When students over borrow, this drives up the total amount of medical school debt that has to be paid off. The higher the loan amount is, the more interest the borrower is going to be responsible for paying as well. The less that can be borrowed, the less interest the borrower will pay in the long run and the lower the payments will be when repayment on the loans begins.

It is better for medical students to opt for federal loans rather than private loans.
It is better for medical students to opt for federal loans rather than private loans.

It is also better for medical students to opt for federal loans instead of private loans. Private loans tend to have higher interest rates and less favorable terms and conditions than federal loans. Federal loans are also eligible for forbearance during the residency stage of medical school. This means that the medical school debt payments will be based on the salary of a resident, which is lower than when the student completes their residency.

Federal loans are eligible for forebearance during a medical student's residency.
Federal loans are eligible for forebearance during a medical student's residency.

Medical students and doctors should also pay attention to the interest rates on medical student loans. When interest rates drop lower than the rates the students or doctors have, they should take advantage of consolidating their loans at this time. This will land the medical student a lower interest rate, a lower monthly payment and require them to pay less overall when the medical school debt is paid off.

Medical students should also look into programs where the repayment of the medical school loans is based on income. Medical students should apply for these types of income-based programs when their income is low, so that the payments will be low. If the borrower does this when they are already making a higher income as a doctor, then this will make the payments much higher than the payments should be.

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    • Depending on where a student seeks an education, it is possible to graduate with a substantial amount of student loan debt.
      Depending on where a student seeks an education, it is possible to graduate with a substantial amount of student loan debt.
    • It is better for medical students to opt for federal loans rather than private loans.
      It is better for medical students to opt for federal loans rather than private loans.
    • Federal loans are eligible for forebearance during a medical student's residency.
      Federal loans are eligible for forebearance during a medical student's residency.