Menu Icon Search
Close Search
Loan image courtesy of Shutterstock

The Ultimate Student Loan Repayment Guide for Doctors

Created October 21, 2015 by Cat Alford
Share

$176,000.

It’s a number newly-minted physicians or those in the process of becoming a doctor should know.

No, it’s not the average salary of those in the medical field or the cost of an average physician’s home.

It’s also not something fun like the price you can pay for a new Audi R8 when you graduate from medical school (although that would be super nice.)

Rather, $176,000 is the average amount of medical school debt graduates had in 2014 according to the Association of American Medical Colleges. Even worse: this number doesn’t include debt they may have incurred as undergraduates.

Because physicians earn high incomes when they graduate, many assume repaying student loans will be something they will be able to handle with ease.

But with ever increasing costs and a decline in physician reimbursements, student loan repayment is something all physicians should take the time to research and consider. This includes calculating how the repayments will fit in their overall budgets and how long it will take to pay all these loans. After all, they worked far too hard for too long to be saddled with financial issues.

Where to start? Here’s our guide for MDs repaying their student loans.

Crunch the Numbers First

I realize that after devoting 12-15 years of their lives to training, you are prone to lifestyle inflation when you graduate. However, the first thing you should do upon graduation is crunch the numbers to find out what you owe in student loans.

With the average student loan balance for physicians at $176,000, it’s best to get ahead of the game and pay them off as soon as possible to avoid large interest payments.

Learn how much is owed and decide how much time it will take to pay them back before being tempted to upgrade your car or home.

For example, if a physician wanted to pay back $176,000 at 6% interest over 10 years, that would be around $1,954 a month every month for ten years. This includes nearly $58,500 in interest charges over the life of the loan.

While $2,000 a month might be a small portion of a physician’s paycheck, it is definitely not a small number in general. Consistently investing that amount in a retirement account would have massive wealth-building potential over time.

Plus, that $58,500 could be spent on so many other exciting things like a rental property, a few trips around the world or other investments. Wouldn’t that be better than paying it to the bank?

For all these reasons, we’ve created the ultimate student loan repayment guide for doctors including some solutions and lesser-known options for paying back student loans. That way, student loan burdens can be drastically reduced so hard-earned money can be spent on enjoyable things enjoy instead of high-interest payments.

Here are some examples:

Refinance Your Student Loans

One of the first things you should consider when paying back student loans is whether or not you should refinance them.

Refinancing your student loans can be a great way to save on interest payments over time. This is especially true if you have private student loans with rates as high as 9%.

Essentially, you would work with a new loan company who would pay off your student loans from your current provider and repackage it to you at a lower interest rate.

For example, by dropping your interest rate from 9% to 5%, you can save thousands of dollars over the course of your repayment period.

Keep in mind that you will typically need a good credit score to get the best rates and some companies who refinance loans are stricter with who they’ll accept than others.

Make sure you are prepared to make your payments on time because if you refinance federal loans, you won’t have access to their flexible repayment options anymore. However several lenders who refinance loans, like SoFi, offer unemployment protection.

All things considered, refinancing is definitely a worthwhile strategy, but make sure it’s right for you before diving in.

For more often-overlooked options for paying off your student loans, click here to read the rest of the article by Student Loan Hero.

// Share //

// Recent Articles //

  • Medical, +1 MORE
  • 4 New Year’s Resolutions for MCAT Test-Takers

  • Posted December 13, 2017 by Cassie Kosarek
  • Plotting out your course of study in anticipation of any MCAT test date is difficult enough, but between November and the beginning of January, this task may be even more challenging. In the midst of holiday shopping, holiday cooking, gatherings, and festive sweaters, medical school hopefuls might find that their MCAT prep books accumulate a...VIEW >
  • What is Vasculitis?

  • Posted December 12, 2017 by Open Osmosis
  • What is vasculitis? Vasculitis is an inflammation of the blood vessels that typically has some immune system-related cause. This video covers the pathophysiology of vasculitis in general, as well as more specific conditions like giant cell arteritis, Takayasu arteritis, Kawasaki disease, polyarteritis nodosa, Buerger’s disease, granulomatosis with polyangiitis, microscopic polyangiitis, and Churg-Strauss syndrome, as well...VIEW >
  • Bropocalypse 2017

  • Posted December 8, 2017 by The Short Coat Podcast
  • The national #MeToo conversation continues Dave found himself hosting with another group of women, so what better time to talk about #MeToo and the powerful people being taken down by their sexual harassment and abuse of their less-powerful victims?  Erin Pazaski, Hillary O’Brien, Laura Quast, and Liza Mann weigh in on why this seems to...VIEW >
  • Helping Your Kids Connect With Their Medical Parent

  • Posted December 7, 2017 by Amy Rakowczyk
  • You’ve probably seen numerous articles discussing the medical marriage and what to expect during training. However, another aspect of medical life that often goes overlooked is when children are part of the medical family. While there might be a good amount of advice out there for maintaining and strengthening your connection as a couple (please...VIEW >
  • Do-It-Yourself Exit Strategy: How I Stitched Together My Own Golden Parachute

  • Posted December 6, 2017 by Michelle A. Finkel, MD
  • Over a decade ago, I was seated in the emergency department with a colleague when I inquired about another one of our physician co-workers I’d not seen in a while. “Oh, she’s on the Mommy Track,” my colleague said and picked up another chart, without giving his words a second thought. To me, selecting a...VIEW >
  • Medical, +1 MORE
  • Q&A With Dr. Paige O’Mahoney, Physician-Author and Wellness Coach

  • Posted December 5, 2017 by The Student Doctor Network
  • Tell us a little bit about yourself. I started medical school at age 27 after studying international relations in college and then working as a paralegal in an international law firm. I met my husband, who was also changing careers, the first day of a post-baccalaureate premed program called MedPath at the Ohio State University....VIEW >

// Forums //