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Swiping and tapping a credit card can certainly make life easier, from buying a cup of coffee on the go to ordering (after much research) a new couch online. But knowing the right time to pay your bill can require a bit of time and thought. Sometimes, the due date is not so clear. And you may wonder whether to pay on that date or before.

With this guide, you’ll learn how to find your due date plus the ins and outs of paying your bill. You’ll also get some smart insights and tips on managing your credit card responsibly.

When to Make a Credit Card Payment

There are many different kinds of credit cards available. Once you have one or more in your wallet, you can enjoy the ease of paying with plastic and possibly earning some credit card rewards.

But how do you find your credit card due date? Unlike other sorts of bills, credit cards aren’t always due on a regular date like the first of the month. The exact due date will vary depending on your credit card billing cycle, and may fall on a seemingly random date.

To find your credit card due date (because paying on-time is part of using a credit card wisely), you can check your billing statement. The due date, along with the minimum payment due, will likely appear close to the top of your written statement.

You can also find due date and payment information in your online account, if you’ve created one; these digital portals also often make it simple to make online payments.

If you don’t have access to either a paper or digital billing statement, you can call the customer service number on the back of your card and ask a representative when your payment is due. Most cards also allow you to make payments over the phone, either through an automated system or with a live customer service agent.

How to Pay Your Credit Card on Time — and Why it’s Important

To pay your card on time, you’ll pay at least the minimum amount listed by the credit card payment due date. Generally, the cutoff time is 5pm on the day the payment is due, but you may want to reach out to the issuer directly to get exact details.

That said, it may be a better idea to avoid cutting it so close, if you can help it. You can make your credit card payments before the due date typically, both online and by phone. Doing so can help ensure the payment has time to post to your account before the cutoff.

Paying your credit card on time will help you avoid paying late fees, for one thing — which, when added to interest payments, can make your credit card debt spiral.

But on-time payments can also help build your credit history since they’re reported to the major credit bureaus, and your payment history (including timeliness) accounts for around 35% of your FICO® score.

The Grace Period

It’s helpful to understand that practically all credit cards offer a grace period: the time between your statement closing date and the due date in which the purchases you’ve made during that billing cycle do not accrue interest. (Not accruing interest can be a very good thing; the current average interest rate on new credit card offers hit 20.51% as of the middle of 2023.)

By law, if offered the grace period must be at least 21 days. This means you get a three-week window to pay your card off in full without being responsible for any finance charges. (This may not be true in the case of balance transfers or cash advances, and interest may accrue immediately.)

But it’s possible to use a credit card on a regular basis without paying interest. All you have to do is pay it off on time and in full each and every month.

Recommended: Guide to Lowering Your Credit Card Interest Rate

Paying Your Credit Cards on Time

Even if you only have one or two credit cards, chances are you have a lot on your plate in any given month.

Between making rent, shelling out your car payment, and actually keeping the job that lets you pay for all this stuff, keeping tabs on your credit card due dates may feel like just another task in a long list of chores. (It’s true: Adulting is hard.)

What Happens If I Pay Late?

Life happens, and sometimes many people pay their credit card late, whether due to an oversight or lack of funds. Typically, when you miss a payment deadline on your credit card bill, here’s what can happen:

•   You may be assessed a late payment fee. These usually range from about $15 to $35 per instance.

•   Your credit card issuer could raise your interest rate to what is known as a penalty rate. In most cases, the issuer must give you 45 days notice. The penalty rate is something you are likely to want to avoid, as it can be around 27% to 30%.

•   Your late payment can be reported to the big three credit reporting bureaus and show up on your credit history. A pattern of late payments could translate into your having to pay more to borrow in the future or even being denied credit.

Can I Change My Credit Card Bill’s Due Date?

Some credit card issuers will allow you to change your statement due date. Check with your issuer to see if they offer this; be aware that there may be a cap on how many times a year you can do so.

Changing your credit card bill’s due date can be a helpful move. You might be able to shift it to better sync up with your payday or at least move the date so it’s not, say, right at the same time as when rent is due.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

Benefits of Paying Your Credit Card Early

Here’s another angle on paying your credit card: Instead of thinking about the damage that can be done by paying it late, look at the benefits of paying your bill early. The pros include:

•   Paying your credit card bill early may help establish and secure your credit score.

•   It helps free up your line of credit. It’s wise to keep your card’s balance at 30% of your limit at the very most. It’s a financially healthy move to make, and it could free up your available line of credit for an upcoming large purchase.

•   Paying your bill early lowers the amount of interest you will accrue. That means you owe less.

•   The sooner you pay off bills, the sooner you get out of debt, which is a desirable thing for most people.

•   By paying a bill early, you know it’s taken care of and you don’t have to worry about forgetting to send funds to your card issuer.

Tips for Managing Your Credit Card Bill

If you’re new to having a credit card or find yourself facing challenges managing your credit card usage, consider these helpful strategies:

•   Prioritize paying your bill when (or before) it’s due. That will be a positive step in your use of credit and minimize the interest and charges that can accrue.

•   Review your credit card bill every month. Not only will this help you get a handle on your spending, you can identify any incorrect charges or ones that might indicate fraudulent activity.

•   Try to pay more than just the minimum every month. Also educate yourself about what that minimum is. It’s not a helpful recommendation; it’s the lowest possible limit you can pay on the bill.

•   Work to keep your credit utilization ratio low; no more than 30% at most can be a good guideline.

•   If you are feeling as if your credit card debt is too high and/or you feel you need help eliminating it, it may be a smart financial move to take out a personal loan to pay off a credit card fully. Depending upon the term length you choose, you may end up saving money if the interest rate you’re offered is lower than the one offered by the credit card.

Or you could consult with a no- or low-cost credit counselor on solutions to your situation.

The Takeaway

Credit cards have many benefits, but it can be important to stay on top of your payments so your debt doesn’t accrue and your credit score is maintained. Understanding when your credit card payment is due, by looking at your statement or contacting your card issuer, is a smart move. It can also be wise to request your due date be moved, if possible, to better sync up with your cash-flow needs.

Looking for a new credit card? Consider a rewards card that can make your money work for you. With the SoFi Credit Card, you earn cash-back rewards on all eligible purchases. You can then use those rewards for travel or to invest, save, or pay down eligible SoFi debt.

With the SoFi Credit Card, you can earn cash-back rewards, apply them toward your balance, redeem points into stock in a SoFi Active Invest account, and more!* 

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Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points into your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, or Student Loan Refinance, your rewards points will redeem at a rate of 1 cent per every point. For more details, please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

The SoFi Credit Card is issued by SoFi Bank, N.A. pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Whether trying to consolidate debt with a personal loan or thinking about a loan to pay for a major life event, taking on debt is a financial move that warrants some consideration.

It’s important to understand the financial commitment that taking on a personal loan — or any other debt — entails. This includes understanding interest rates you might qualify for, how a loan term affects the total interest charged, fees that might be charged by different lenders, and, finally, comparing offers you might receive.

Shopping around and comparing loans can increase your confidence that you’re getting the best interest rate on a loan.

What’s a Good Interest Rate on a Loan?

You may see advertisements for loan interest rates, but when you get around to checking your personal loan interest rate, what you’re offered may be different than rates you’ve seen. Why is that? A loan company may have interest rate ranges, but the lowest, most competitive rates may only be available to people who have excellent credit, as well as other factors.

When shopping around for a loan, you can generally check your rate without affecting your credit score. This pre-qualification rate is just an estimate of the interest rate you would likely be offered if you were to apply for a loan, but it can give you a good estimate of what sort of rate you might be offered. You can compare rates to begin to filter potential companies to use to apply for a loan.


💡 Quick Tip: SoFi lets you apply for a personal loan online in 60 seconds, without affecting your credit score.

Getting a Favorable Interest Rate on a Loan

The potential interest rate on a loan depends on a few factors. These may include:

•   The amount of money borrowed.

•   The length of the loan.

•   The type of interest on your loan. Some loans may have variable interest (interest rates can fluctuate throughout the life of the loan) or a fixed interest rate. Typically, starting interest rates may be lower on a variable-rate loan.

•   Your credit score, which consists of several components.

•   Being a current customer of the company.

For example, your credit history, reflected in your credit score, can give a lender an idea of how much a risk you may be. Late payments, a high balance, or recently opened lines of credit or existing loans may make it seem like you could be a risky potential borrower.

If your credit score is not where you’d like it to be, it may make sense to take some time to focus on increasing your credit score. Some ways to do this are:

•   Analyzing your credit report and correcting any errors. If you haven’t checked your credit report, doing so before you apply for a loan is a good first step to making sure your credit information is correct. Then you’ll have a chance to correct any errors that may be bringing down your credit score.

•   Work on improving your credit score, if necessary. Making sure you pay bills on time and keeping your credit utilization ratio at a healthy level can help improve your credit score.

•   Minimize opening new accounts. Opening new accounts may temporarily decrease your credit score. If you’re planning to apply for a loan, it may be good to hold off on opening any new accounts for a few months leading up to your application.

•   Consider a cosigner or co-applicant for a loan. If you have someone close to you — a parent or a partner — with excellent credit, having a cosigner may make a loan application stronger. Keep in mind, though, that a cosigner will be responsible for the loan if the main borrower does not make payments.

Recommended: Personal Loan Calculator

Comparing Interest Rates on Personal Loans

When you compare loan options, it can be easy to focus exclusively on interest rates, choosing the company that may potentially offer you the lowest rate. But it can also be important to look at some other factors, including:

•   What are the fees? Some companies may charge fees such as origination fees or prepayment penalties. Before you commit to a loan, know what fees may be applicable so you won’t be surprised.

•   What sort of hardship terms do they have? Life happens, and it’s helpful to know if there are any alternative payment options if you were not able to make a payment during a month. It can be helpful to know in advance the steps one would take if they were experiencing financial hardship.

•   What is customer service like? If you have questions, how do you access the company?

•   Does your current bank offer “bundled” options? Current customers with active accounts may be offered lower personal loan interest rates than brand-new customers.

💡 Quick Tip: Fixed-interest-rate personal loans from SoFi make payments easy to track and give you a target payoff date to work toward.

Choosing a Personal Loan For Your Financial Situation

Interest rates and terms aside, before you apply for a loan, it’s a good idea to understand how the loan will fit into your life and how you’ll budget for loan payments in the future. The best personal loan is one that feels like it can comfortably fit in your budget.

But it also may be a good idea to assess whether you need a personal loan, or whether there may be another financial option that fits your goals. For example:

•   Using a buy now, pay later service to cover the cost of a purchase. These services may offer 0% interest for a set amount of time.

•   Transferring high-interest credit card debt to a 0% or low-interest credit card, and making a plan to pay the balance before the end of the promotional rate.

•   Taking on a side hustle or decreasing monthly expenses to be able to cover the cost of a major purchase or renovation.

•   Researching other loan options, such as a home equity loan, depending on your needs.

Recommended: Avoiding Loan Origination Fees

The Takeaway

A loan is likely to play a big part in your financial life for months or years, so it’s important to take your time and figure out which loan option is right for you. And it’s also important to remember that interest rate is just one aspect of the loan. Paying attention to details like potential fees, hardship clauses, and other factors you may find in the small print may save you money and stress over time.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.

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Photo credit: iStock/Prostock-Studio

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Mortgage rates have risen considerably recently, from an average of 2.96% for a 30-year fixed-rate loan at the end of 2021 to around 6% to 7% at the midpoint of 2023. But despite it being more expensive to borrow money for a home, refinancing is still an attractive option for many homeowners. It allows you to replace your current mortgage with a new, potentially more advantageous one.

Perhaps you decided that you’d like to change your loan term, or you received a windfall you’d like to put toward lowering your mortgage ASAP. Another possibility is that you’ve built up equity and would like to tap it in a cash-out refinance.

Whatever your situation may be, here’s what you need to know about refinancing a home mortgage loan, from whether it’s right for you to what steps are involved to how much it will cost.

What Is Mortgage Refinancing?

Mortgage refinancing occurs when you replace one home loan with a new one. You might do so for such reasons as:

•  To get a different loan term (say, 15 years instead of 30, or vice versa)

•  To get a better interest rate

•  To tap your home equity

•  To make a switch between a fixed- and adjustable-rate loan

•  To get rid of mortgage insurance on an FHA loan.

You need to go through the loan application process, underwriting, and closing again and pay the related costs. The new loan will pay off the old one. Then, going forward, you pay the new lender every month instead of your previous one.

Mortgage Refinancing Costs

Refinancing will generally cost from 2% to 5% of your loan’s principal value in closing costs. That’s a significant range, so it can be wise to shop around to make sure you’re getting the best deal.

Since you’re essentially applying for a new loan, you will likely need a chunk of cash at the ready if you choose to refinance. For this reason, it’s important to consider those refinancing costs compared to the potential savings. A good rule of thumb is to be certain you can recoup the cost of the refinance in two to three years — which means you shouldn’t have immediate plans to move.

There are helpful online calculators for determining approximate costs for a mortgage refinance. Of course, this will only be an estimate, and each lender will be different. As you do your research, lenders can provide final closing cost information alongside a quote for your new mortgage rate.

When you refinance, you also have to consider closing costs. Some lenders may not have origination fees, but instead charge the borrower a higher interest rate.

If you have a history of managing credit well and a strong financial position, there are some mortgage refinancing lenders that will probably reward you by offering a better rate than they would charge those with lesser credentials.

Recommended: Home Affordability Calculator

How Long Does a Mortgage Refinance Take?

The process can take anywhere from 30 to 45 days or longer to complete. Factors that impact timing include the complexity of the loan, your ability to submit materials in a timely fashion, and the efficiency of the lender and/or broker.

If you want the process to move quickly, you may want to look for mortgage lenders who offer more streamlined service and a better customer experience. This may mean working with an online lender versus, say, a brick-and-mortar bank.

How to Refinance a Home Mortgage Loan

When you refinance a home mortgage, you are essentially repeating the same process as when you originally bought your property. This time, however, instead of the loan going to the homeowner you are buying a house from, funds will first go to the financial institution that holds your current mortgage. Once that loan is paid off, your newly refinanced loan kicks in. You start making payments to the new lender.

Because you are replacing one mortgage with another, you can expect the steps to be similar as they were when you got your original loan, from shopping around for the best loan for your situation to providing the necessary documentation to closing.

Steps in the Mortgage Refinancing Process

Here’s a closer look at the process:

1.   Determine your goal. The first (and arguably most important) step is to determine what you want to get out of your mortgage loan refinance. There are several mortgage refinance types, but “rate and term” and “cash-out” are the two most common.

Just as the name implies, a “rate and term” refinance updates the interest rate, the term (or duration) of the loan, or both. You can also switch between an adjustable- vs. a fixed-rate loan.

It is important to understand that not every refinance will save you money on interest. For example, if you extend the loan term from 15 to 30 years, you may lower your monthly payment, but you could end up paying more money in interest over the course of your loan.

Once you determine your goal, your primary focus will be determining whether the fees are worth what you’ll gain.

With a cash-out refinance, you are using increased equity in your home to take out additional money on your mortgage.

This is usually done to fund common home repairs or pay off other, higher-interest debt. While this kind of loan can be an excellent tool if you use it wisely, as with all loans, it’s rarely advisable to take out more than you absolutely need.

2.   Check your credit score and credit history for errors. Your credit score is an important factor in determining whether you get a better rate. Make sure you take time to clear up anything that’s been reported erroneously on your credit report. You might also want to remedy, say, an unpaid bill that was forwarded to a collection agency. These are factors that can lower your score.

3.   Research your home’s approximate value. Check comparable sale prices — not just listing prices — in your neighborhood to get an idea of what your house is worth. If the value of your home has gone up significantly and improves your loan-to-value ratio (LTV), this will be helpful in securing the best refinancing rate.

4.   Compare refinance rates online. It’s wise to shop around and see what at least a few lenders offer. Don’t forget to ask about all costs involved. Most financial institutions should be able to give you an estimate, but the accuracy can depend on how well you know your credit score and LTV ratio.

5.   Get your paperwork together. The process will move faster if you have your pay stubs, bank statements, tax filings, and other pertinent financial information ready to go.

6.   Have cash on hand. Refinancing brings charges, and at closing, such items as overdue property taxes can need to be paid, too. Make sure you can cover these costs.

7.   Track the lender’s progress. Once the process is underway, keep an eye on how well things are moving ahead. What typically happens: The lender will likely send an appraiser for a home inspection. After the loan documentation and appraisal are submitted, loan officers determine the interest rate and create the loan closing documents. The closing is then scheduled with the refinancing company, mortgage broker, and your attorney.

Reasons to Refinance

As mentioned above, there are several typical reasons to refinance:

•  Reducing your monthly payment

•  Paying off your loan sooner

•  Changing the loan terms or type (fixed- vs. adjustable-rate)

•  Tapping your home equity

•  Eliminating mortgage insurance on an FHA loan.

Benefits of Refinancing

By refinancing your home loan, your monthly mortgage payments might be reduced. This in turn could free up money in your budget to go toward other goals, like paying down credit card debt or pumping up your emergency fund.

In addition, you might pay off your loan sooner, which could save you a considerable amount in interest over the life of the loan.

Refinancing your mortgage might also allow you to tap equity in your home. This could be useful if, say, you need those funds for educational or other expenses coming your way.

Also, some people who switch from an adjustable- to a fixed-rate loan may feel more secure with a set, unwavering payment schedule.

Recommended: First-Time Homebuyer Programs

Tips to Refinance a Mortgage

Beyond the tips mentioned above, you may also benefit from keeping these points in mind:

•  Think carefully about no-closing-cost loans. Yes, not paying closing costs can sound appealing, but there’s a good chance you will wind up with a higher interest rate and paying more over the life of the loan.

•  Make your appraisal a success. It can be distressing to have an appraisal come in low and throw a wrench into the works as you try to refinance. If there’s a glaring issue (rotting porch posts, for instance), it might be wise to fix it before the appraiser visits.

•  Prioritize requests for paperwork and documentation when your file is moving through underwriting. Not doing so can cause the process to drag on for longer than anyone might want.

The Takeaway

Depending on your financial situation and goals, refinancing your home loan can be a wise move. You may be able to lower your monthly payments, or you might shorten your loan term, thereby saving a considerable amount in interest. Another reason to refinance: To tap the equity you have built up in your home and use that cash elsewhere. The process is very similar to shopping for, applying for, and closing on your current mortgage. It will involve doing your research, providing documentation, and paying closing costs.

If refinancing is right for you, see what SoFi offers. With a SoFi Mortgage Refinance, you’ll find competitive rates, flexible terms, and a streamlined process, all of which can help you find just the right loan for your life.

SoFi: The smart way to refinance your mortgage.

FAQ

What is the average refinance fee?

Typically, you can expect to pay between 2% to 5% of the loan’s principal in closing costs when refinancing a mortgage.

Is it expensive to refinance?

The cost of refinancing will typically vary with the amount of the loan you are seeking. If closing costs are, say, 3.5% of the loan principal, that will be $3,500 on a $100K loan and $35,000 on a $1 million loan. It can also be helpful to compare these closing costs to the benefits of refinancing. For instance, you might free up more money every month to pay down pricey credit card debt, or you might shorten your loan term and pay less interest over the life of the loan when refinancing.

Why is it so expensive to refinance a mortgage?

When you refinance a loan, you are replacing your current loan with a new one. Closing costs are assessed to cover the expenses involved, including appraisal fees and other charges.

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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According to the Association of American Medical Colleges (AAMC), the average medical school debt for students who graduated in 2022 was $205,037.

While many med school students eventually may earn six figures or more, they also can expect to graduate with student debt that averages close to a quarter of a million dollars.

And that’s just what these graduates owe for their medical school education. Researchers at EducationData.org found that 43% of indebted medical school graduates also have premedical education debt to pay for.

Because of the high cost of the average debt of a medical student, it’s crucial for aspiring and current medical school students, and graduates, to understand their debt repayment options.

Medical School Debt Statistics

Here’s a snapshot of what the average med school debt can look like for graduates, based on a roundup of the most recent statistics available:

•   According to a 2022 report by EducationData.org, medical school graduates had, on average, $250,990 in total education debt (premed and medical school). Compare that with the average educational debt for the class of 1999-2000: $87,020.

•   When the AAMC looked at members of the class of 2020 who took out educational loans, it found that:

◦   5.4% borrowed $1 to $49,999 for premed studies and medical school

◦   6.1% borrowed $50,000 to $99,999

◦   8.2% borrowed $100,000 to $149,999

◦   13.7% borrowed $150,000 to $199,999

◦   25.1% borrowed $200,000 to $299,999

◦   11.2% borrowed $300,000 to $399,999

◦   2.9% borrowed $400,000 to $499,999

•   While the cost of medical school grew 2.5%, the annual growth rate of medical school debt is 12.4%, as calculated by EducationData.

Source: Association of American Medical Colleges

What Does This Mean for Borrowers?

It’s important to note that, when it comes to borrowing for medical school, loan interest rates offered by the federal government, along with the terms and conditions, might be different from borrowing as an undergrad. This is one of the basics of student loans that it’s helpful to understand when it comes to the average medical school debt.

Some med students may benefit from scholarships and loan forgiveness programs that could cut their costs substantially. But many will end up making loan payments for years—or even decades.

So what does the average medical student debt look like? According to the number crunchers at EducationData, the average doctor will ultimately pay from $135,000 to $440,000 for his or her educational loans, with interest factored in.

Source: Association of American Medical Colleges

Medical School Loan Options

Types of federal student loans available to medical students to help with the average med school debt include Direct Unsubsidized Loans, with a limit of $20,500 each year.

Rates for this type of loan are currently lower than for the other type of federal student loan available to those going to medical school, Direct PLUS loans. The current rate for Direct Unsubsidized Loans is 6.54%, while Direct PLUS loans have an interest rate of 7.54% through July 1, 2023.

There isn’t a financial need requirement for either type of federal student loan, so many medical students qualify for both. With Direct Unsubsidized Loans, there is no credit check, but there is a credit check for PLUS loans.

Medical students also can apply for private student loans to help cover their average medical student debt. Generally, borrowers need a solid credit history for private student loans, among other financial factors that will vary by lender. Private lenders offer different rates, terms, and overall loan programs.

Federal loans come with many student protections and benefits that private loans don’t, such as the Public Service Loan Forgiveness program and income-driven repayment.

Medical students also may choose to defer federal student loans during their residency, which isn’t typically an option with private student loans.

Recommended: Private Student Loans Guide

How to Deal With Debt

There are several strategies that graduates grappling with the average medical student debt may want to consider.

Deferment

If you’ve ever borrowed money—for school or otherwise—you know that two critical factors can influence how much the loan will cost overall.

•   The interest rate you’re paying

•   How long you take to repay the loan or loans.

The repayment timeline is often extended when medical residents make partial monthly loan payments or no payments at all. Putting off payments may seem like a good idea during a stressful time, but delaying can be costly.

Most federal student loans, when deferred, continue to accrue interest. The problem those in medical fields can face is debt accumulation during their residency, which can last anywhere from three to seven years.

Even while making a modest income—in 2022, the average resident earned $64,200, according to Medscape—the debt would grow considerably.

Part or all of your unpaid interest might currently be capitalized when you complete your residency. This means the accrued interest is added to the principal of the loan, and that new value is then used to calculate the amount of interest owed. However, thanks to new regulations set to take effect in July 2023, interest capitalization will be eliminated on most federal student loans, saving borrowers money.

If you decide to put your loans in deferment or forbearance, making interest-only payments and putting that money toward student loans can reduce the amount of interest that could be added to the loan.

Income-Driven Repayment

An income-driven repayment plan is an option for medical residents who can’t afford full payments. The four plans limit payments to a percentage of borrowers’ income, extend the repayment period to 20 or 25 years, and promise forgiveness of any remaining balance.

In general, borrowers qualify for lower loan payments if their total student loan debt exceeds their annual income. Payments are based on discretionary income, family size, and state.

Refinancing Loans

Refinancing medical school loans to help cover the average medical student debt is an option during residency, after residency, or both.

Refinancing student loans with a private lender might help save you money if you can get a lower interest rate than the rates of your current student loans.

Student loan refinancing means paying off one or more of your existing federal and private student loans with one new loan. An advantage of refinancing student loans is that you’ll only have one monthly payment to make.

If you refinance your student loans and get a better rate, you could choose a term that allows you to pay off the loan more quickly if you’re able to shoulder the payments, which should save you in interest.

However, refinancing isn’t a good fit for those who wish to take advantage of federal programs and protections. Refinancing federal loans means you no longer have access to these benefits.

Recommended: Student Loan Refinancing Calculator

Consolidating Loans

The federal government offers Direct Consolidation Loans, through which multiple eligible federal student loans are combined into one. The interest rate on the new loan is the average of the original loans’ interest rates, rounded up to the nearest one-eighth of a percentage point.

If your payment goes down, it’s likely because the term has been extended from the standard 10-year repayment to up to 30 years. Although you may pay less each month, you’ll also be paying more in interest over the life of your loan.

Schools With the Highest Student Debt

When it comes to student debt, all medical programs are not equal. According to U.S. News and World Report’s “Best Grad School” rankings, the range can be extensive. Out of 122 medical schools listed, the three that left grads with the most debt in 2022 were:

•   Nova Southeastern University Patel College of Osteopathic Medicine (Patel) in Fort Lauderdale, Florida: $322,067

•   Western University of Health Sciences in Pomona, California: $281,104

•   West Virginia School of Osteopathic Medicine in Lewisburg, West Virginia: $268,416
On the other end of the spectrum, the school that graduated students with the least amount of debt in 2022 was New York University in New York, New York, with about $85,000.

Public vs. Private Medical School

The cost of attending a private medical school is typically higher than a public school.

According to the AAMC, these were the median costs of tuition, fees, and health insurance for first-year medical students during the 2022-2023 school year.

•   Private school, in-state resident: $67,294

•   Private school, nonresident: $67,855

•   Public school, in-state resident: $41,095

•   Public school, nonresident: $65,744

According to EducationData, however, the average public medical school graduate leaves school owing a higher percentage of the cost of attendance (79.9%) than the average private school medical school graduate (65.1%).

The Takeaway

There’s no doubt that studying medicine can lead to a lucrative career, but the route can be daunting, in every way. When the average debt of a medical student tops $250,000, some aspiring and newly minted doctors look for a remedy, stat.

If you’re leaning toward refinancing, SoFi’s student loan refinancing offers a fixed or variable interest rate, no fees, and a simple online application. SoFi also has a program specifically for medical residents. Potential borrowers might benefit from a low rate or low monthly payments during residency.

Get prequalified and check your student loan refinancing rate with SoFi.

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SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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