From a financial perspective, physicians stand to profit: Becoming a doctor is one of the most lucrative career options available. However, it’s not without its costs: The average physician graduates with almost $200,000 in student loan debt. These loans can be brutal, but smart planning today can help you prepare for a better tomorrow. Here are five tips that every physician should know about their medical loans.
1. Different areas have different repayment options.
If you work in a designated health shortage area, you may qualify for a special type of loan forgiveness or repayment option. This depends on a variety of factors, but primarily the total population of doctors in a given location. These types of programs are particularly popular in rural areas, so if that’s a life you’d want to live, make sure to check out these programs.
2. Varying repayment options are available.
Some loans allow for payment deferral for a certain period of time, or allow for you to defer your loan. Depending on your loan, you can also seek an income-dependent repayment plan.
3. There are ways to reduce your interest rates.
Medical school loans currently average at around 6%. However, there are many ways to reduce the rate of your loans. Interest rates remain low, and if refinancing your loan is an option for you, you should explore it to see if you can get a lower interest loan rate. Other options include enrolling in an electronic auto payment or selecting a variable interest rate – but, be warned, those can move to a higher rate with little warning.
4. Loan forgiveness is possible.
There are a slew of programs which can help you have your loans forgiven. Like other physician loan programs, they are often dependent upon where you practice and what field you practice in, but it’s worth exploring your options to determine if any of these programs apply to you and your chosen field.
5. Enroll in the military
Different branches of the military will pay for your medical school – provided that you sign up for a long period of time. The amount and term of service varies, but it can go as high as the military covering 100% of your medical school tuition.
While physician loans can be painful, there are plenty of ways to pay off their debt. As such, do your research and explore your options. Doing so can save you thousands upon thousands of dollars in the future.