Career and Life Planning Guidebook for Medical Residents

With interest rates being locked in at historic low rates, your interest will likely accrue at half of what the amount used to be. Rather than interest of $1,000 a month, you may owe only interest of $800 or $900 a month. As noted in the previous chapter, the rates for residents are 1% to 2% higher than practicing physicians in this program. This historical low in interest rates and the corre- sponding lowaccumulation of monthly interest owed is tremendous when you consider the value (or, if you are in debt, the COST) of compounding! The bummer is that when you refinance your debts with a private company like SoFi or Laurel Road you can NO LONGER participate in PSLF. No debt forgiveness, only debt pay-off that you create for yourself; however, you’ll be in control of your own destiny rather than relying on the government, which is an advantage worth considering. R E A D : What To Do If You Are A Resident Or A Fellow Companies such as LinkCapital, Laurel Road, and a brand-new player, GradSchoolLoans.com, will refinance your debts while you’re in residency. Now, I will tell you that the rates offered by these companies are higher as a resident than when you are practicing as a physician. As I’m writing this chapter, those companies are offering around a 5% to 5.5% interest rate. What does this all mean? So how do you decide which company to go with? At the end of the day, it’s all about who gives you the best rate. Who will give you 5%? Who will give you 5.5%? It doesn’t matter! Go for the one who will give you the lowest rate. Recommended Tool Medical School Loan Calculator and the Impact of Making Extra Debt Payments Over the course of a loan amortization youwill pay thousands of dollars in interest. Bymaking a small additional monthly payment toward principal, you can greatly accelerate the repayment of the loan and, thereby, realize tremendous savings in interest payments. Use our extra pay- ment calculator to determine howmuch more quickly you may be able to pay off your debt. http://md.careers/C-04 Managing Your Student Debt 379 WWW.PHYSICIANCAREERPLANNING.COM