For those future students prospecting medical schools, like future physicians or dentists, there is commonly known that these are one of the longest and hardest schools to follow, as well as increasingly expensive, regarding the tuition fees. There is always the option of borrowing money to cover all the costs involved in your medical studies. Therefore, you have the option to apply for a medical student loan.

According to the Association of American Medical Colleges (AAMC), 75% of medical school graduates had educational debt. Depending on the chosen school, it might be considered the source of student loans. The federal government loans are always a good solution, without the need to worry about credit or income requirements. However, when attending medical school, there can be added other loans, along with the initial medical student loan.

In general, physicians are entirely very comfortable with debt and student loans, but becoming debt-free, while consolidating the medical student loans, can be more behavioural than math involved.

When deciding where to turn for medical school loans, it’s important to first consider your goals, as well as the protections you hope to receive. Here are some things to keep in mind:

  • Costs of attendance
  • Interest rate
  • Public service loan forgiveness
  • Deferred repayment options
  • Income-driven repayment options

Comparing the options is the best way to figure out what combination of federal and private medical loans are suitable for the work situation.

Benefits like student loan forgiveness and income-driven repayment make federal student loans a better option than private student loans for medical school.

Also, there are student loans specifically designed for medical students and other medical graduate-level health professionals.

There are two types of federal loans available for prospective medical students: federal direct unsubsidized loans and federal plus loans. Most borrowers qualify for both federal direct unsubsidized loans and federal PLUS loans and there’s no financial need requirement. There’s no credit check required for direct unsubsidized loans. There is a credit check required for PLUS loans, but you don’t necessarily need good credit to qualify — you just can’t have an adverse credit history or negative marks on your credit.

Going to medical school means taking on a lot of medical school loans. There are many tactics for paying off medical school debt, including consolidating multiple medical school loans, refinancing medical school loans, seeking loan forgiveness for doctors and making payments on an income-driven repayment plan.

The best strategy for each individual depends on factors including the types of loans if federal or private, and your career goals.

Attending medical school is expensive, but with the right combination of loans for every situation, there’s a good chance to pay for it. When possible, use own savings and apply for fellowships, grants, and scholarships, all of these before borrowing for your education. Once those resources are exhausted, turning to the consolidation of the medical school loans can make sense.

There is a bit of flexibility when you consolidate medical school loans because doctors can consolidate medical school loans during residency or they can also wait until they become true attending physicians. A lot of the companies that offer medical student loan consolidation services offer the option of providing that service during residency versus after finishing residency, but only some of them offer this service only after the residency is finished and the situation involves a full-time medical practitioner.

Consolidating the medical student loans during residency can be a great money saver while earning less as a resident, but the balance may increase by the time the residency ends. The specifically designed programs for the residents, allow them to pay monthly as little as possible and begin making full payments once the residency is over. This economic strategy can ease the financial burden while having a smaller income as a resident. The most important is to keep the interest at bay. There is even a chance to qualify for an even lower rate after completing the residency or fellowship.

Income-driven repayment programs base their payments only on your income and your family size and not on your loan amount or interest rate. These programs are highly beneficial to residents, who literally cannot afford to make real payments on their student loans.

Some people with low-interest rate student loans wonder if they should pay their loans off. Behaviourally, it is more difficult to maintain focus on building a medical career, while deciding to make minimum payments and end up spending the money instead of paying off the medical student loans.