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Medical school is an academically rigorous undertaking. Finding a way to pay for medical school can be another added challenge. Keep reading for more insight into how to pay for medical school.

What Is Medical School?

Medical school is typically a four-year educational program that leads to graduating students receiving an M.D., D.O. or N.D. degree. After medical school, graduates will generally continue onto a medical residency in the specialty of their choice.

Different Types of Medical School

There are three main types of medical school: allopathic, osteopathic, and naturopathic. All of these programs prepare students for careers as doctors, but they have different academic credentials. Let’s take a closer look at each of these programs.

Allopathic Medical School

Allopathic medicine is also known as conventional or traditional medicine. Allopathic medical schools provide students with a traditional curriculum and approach to medicine. Allopathic doctors rely on traditional methods such as x-rays, prescriptions medications, surgery to treat and diagnose an illness or medical issue, and treating an illness. If a student graduates from an allopathic program, they’ll receive a Doctor of Medicine (M.D.) degree.

Osteopathic Medical School

Osteopathic schools also cover standard medical sciences and practices but supplement those lessons with training on providing touch-based diagnosis and treatment of different health problems. Osteopathic doctors often take a more holistic approach to patient wellness and treatment. Students who attend an osteopathic medical school will end up with a Doctor of Osteopathic Medicine (D.O.) degree.

Naturopathic Medicine School

Naturopathic physicians (ND) or doctors of naturopathic medicine (NMD) attend naturopathic medical school where they study a similar science curriculum as they do in allopathic medical school. The difference with this program is, naturopathic students also study psychology, nutrition, and select complementary therapies such as homeopathy.

Recommended: Average Cost of Medical School

Financing Medical School

The cost of medical school is on the rise and finding a way to finance medical school can be a daunting task. There are quite a few options for medical students to get help doing so. From taking out student loans for medical school to gift aid, students have options.

Scholarships & Grants

A little bit of free money can really come in handy when a student has to pay for medical school and can help students avoid taking on more debt from medical school than they need to. Students can apply for need-based grants and merit scholarships through their medical school or outside sources. Their school’s financial aid office can walk them through their options.

Medical associations and nonprofit organizations also tend to have financial aid, grants for college, and scholarships that medical students can apply for. Again, a school’s financial aid office can help point medical students in the right direction, but they won’t know of every gift aid opportunity available outside of their school, so students may want to do their own research.

The following associations generally offer scholarships and grants for medical students.

•   American Medical Association. This professional group provides financial support through scholarship opportunities, as well as general support for medical students looking to learn more about how to pay for medical school and to prepare for residency.

•   American Medical Women’s Association. Medical students can peruse this association’s list of more than a dozen different scholarships, awards, and grants that they may be eligible to apply to.

•   American Podiatric Medical Association. Every year, the American Podiatric Medical Association gives out more than $200,000 worth of grants and scholarships.

Federal Student Loans

Medical students can apply for federal financial aid, including federal student loans, by <completing the Free Application for Federal Student Aid (FAFSA®). Medical students may qualify for three types of federal loans after they complete the FAFSA. The FAFSA may also qualify students for financial aid such as scholarships and grants from their state or school (if available).

•   Federal Direct Unsubsidized Loans. Also known as Stafford Loans, Federal Direct Unsubsidized Loans allow students to borrow money unsubsidized. When a loan is unsubsidized, this means that the borrower is responsible for paying all of the interest on the loan.

•   Federal Direct Graduate PLUS Loans. If a student still needs help financing medical school after taking out a Federal Direct Unsubsidized Loan, they can take out a Federal Direct Graduate PLUS Loan, which is also unsubsidized. These loans tend to have a higher interest rate than Federal Direct Unsubsidized Loans do and are credit-based.

•   Health Resources and Services Administration (HRSA) Primary Care Loan. Medical students with financial need, and who can demonstrate it, may qualify for this school-based program that offers a few different types of loans for medical students. Not all medical schools participate in this program, but students can check with their school’s financial aid office to see if their school does take part in it.

Recommended: Types of Federal Student Loans

Private Student Loans

After applying for federal student loans, students may be interested in supplementing their federal support with private medical school loans. Generally, private student loans for medical school are available through banks or credit unions. How much a student will pay in interest for a private student loan will depend on what their credit history is, amongst other factors. There are private student loans available at fixed and variable interest rates.

While private student loans can be a helpful option for borrowers, they don’t always offer the same borrower protections as federal student loans — such as income-driven repayment plans or the opportunity to pursue Public Service Loan Forgiveness. Because of this, students generally resort to private student loans only after depleting all other financing resources.

Recommended: Private Students Loans vs Federal Student Loans 

SoFi’s Private Student Loans

SoFi is also a provider of private student loans that can be used to pay for medical school. To apply, students don’t even need to leave their house. The application is done entirely online and it only takes a few minutes to apply, even if the student applies with a cosigner.

To make financing medical school less stressful, borrowers can repay their SoFi student loans in a way that works for them by choosing a monthly student loan payment and rate that fits their budget.

Borrowers never have to worry about fees because SoFi’s student loans are fee free. SoFi also offers borrower’s a six-month grace period after graduation so that they have time to get settled in their new job as a doctor before they need to start making monthly loan payments.

The Takeaway

Between scholarships, grants, and medical school student loans, medical students have some decent options at their disposal for financing medical school. While there’s no denying that medical school can be a stressful time in a person’s life, hopefully all of the hard work and sacrifices will lead to a fulfilling and rewarding career.

For help financing medical school, learn more about SoFi private student loans.

FAQ

What is the best way to pay for medical school?

If a student can secure scholarships and grants, that’s the best way to pay for medical school. Unlike student loans which must be paid back, gift aid is free money that medical students won’t have to pay back after graduation.

How do you get medical school paid for?

Medical students can apply for scholarships and grants to help cover the cost of medical school. After applying gift aid, students can take out federal or private student loans to cover the remaining costs of attending medical school. Paying in cash is also an option, but one that is understandably not within reach for a lot of people.

Is it hard to get loans for medical school?

There are both federal and private student loans available to medical students, so they generally have plenty of options that make it possible to get a loan for medical school.

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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.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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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Grad PLUS loans are federal student loans for graduate and professional students. Although Grad PLUS loans have higher interest rates and fees than some other types of federal student loans, they also have a major benefit — virtually no borrowing limits. You can borrow up to the full cost of attendance of your school, minus any other financial aid you’ve already received.

Read on for more on how Grad PLUS loans work, including their eligibility requirements, interest rates and repayment options.

What Are Grad PLUS Loans?

If you’re planning to attend a graduate or professional program, a Grad PLUS loan could help cover costs. Issued by the Department of Education, Grad PLUS loans are student loans designed for graduate and professional students.

PLUS loans are not the only federal loans available to you as a graduate student — you can also borrow Direct unsubsidized loans. Direct unsubsidized loans have lower interest rates and fees than PLUS loans, but they come with borrowing limits.

If you’ve hit your limit and need additional funding, a Grad PLUS loan could cover the gap. As mentioned above, you can borrow up to the full cost of attendance of your program, minus any other financial aid you’ve already gotten. This flexibility can be helpful for students who are attending pricey programs.

Recommended: How Do Student Loans Work? Guide to Student Loans

What Can Grad PLUS Loans Be Used for?

Grad PLUS loans can be used for tuition, fees and other education-related expenses. These expenses include,

•   Housing

•   Food

•   Textbooks

•   Computers and other supplies

•   Study abroad expenses

•   Transportation

•   Childcare costs

A Grad PLUS loan will first be disbursed to your financial aid office, which will apply the funds toward tuition, fees, room and board, and any other school charges. The financial aid office will then send any remaining funds to you.

Recommended: What Can You Use Student Loans For?

Who Is Eligible for Grad PLUS Loans?

To be eligible for a Grad PLUS loan, you must be a graduate or professional student enrolled at least half-time at an eligible school. What’s more, your program must lead to a graduate or professional degree or certificate.

You’ll also need to meet the eligibility requirements for federal financial aid (more on this below), as well as submit the Free Application for Federal Student Aid (FAFSA®).

Typical Grad PLUS Loan Requirements

Besides being enrolled in an eligible graduate or professional program, you need to meet a few other requirements to take out a Grad PLUS loan:

Meet the Requirements for Federal Student Aid

Since Grad PLUS loans are part of the federal student aid program, you must be eligible for federal aid to borrow one. Here are some of the criteria you need to meet:

•   Be a U.S. citizen or eligible noncitizen

•   Have a valid Social Security number (with some exceptions)

•   Have a high school diploma, General Educational Development (GED) certificate or other recognized equivalent

•   Maintain satisfactory academic progress while in school

•   Not already be in default on a federal student loan or owe money on a federal grant

If you’re a non-U.S. citizen or have an intellectual disability or criminal conviction, additional requirements might apply.

Submit the FAFSA

You’ll need to submit the FAFSA before you can borrow a Grad PLUS loan. After applying to grad school, you can submit this form, free of charge, on the Federal Student Aid website, with the myStudentAid mobile app or via the mail. Since the FAFSA only applies to a single academic year, you’ll need to submit it every year you’re in school and want to receive financial aid.

Complete the Grad PLUS Loan Application

Along with submitting the FAFSA, you’ll also need to fill out a separate application for the Grad PLUS loan. You can find and submit this application on the Federal Student Aid website, though some schools have separate processes. Your financial aid office can advise you on the steps you need to take.

If your application is approved, you’ll need to agree to the terms of the loan by signing a Master Promissory Note. If you haven’t borrowed a Grad PLUS loan before, you’ll also be required to complete student loan entrance counseling.

Not Have Adverse Credit History (or Apply With an Endorser)

While you don’t need outstanding credit to qualify for a Grad PLUS loan, you can’t have adverse credit. According to the Department of Education, you have adverse credit if one of the following applies to you:

•   You have accounts with a total balance greater than $2,085 that are 90 or more days delinquent

•   You’ve experienced a default, bankruptcy, repossession, foreclosure, wage garnishment or tax lien in the past five years

•   You’ve had a charge-off or write-off of a federal student loan in the past five years

If you have adverse credit, you have two options:

•   Appeal the decision due to extenuating circumstances. For example, you could provide documentation showing that you paid off a delinquent debt on your credit report.

•   Apply with an endorser who does not have adverse credit. Your endorser will be responsible for repaying the loan if you fall behind on payments.

Grad PLUS Loans Interest Rates

Grad PLUS loans come with fixed interest rates that will remain the same over the life of your loan. They also have a disbursement fee, which is a percentage of your loan amount that gets deducted from your loan.

Congress sets rates and fees on federal student loans periodically. These are the current Grad PLUS loan interest rates and fees:

Interest Rate (for loans disbursed on or after July 1, 2023 and before July 1, 2024)	Disbursement Fee (for loans disbursed on or after Oct. 1, 2020, and before Oct. 1, 2024)
8.05%	4.228%

Repaying Your Grad PLUS Loans

Grad PLUS loans are eligible for a variety of federal repayment plans:

•   Standard repayment plan, which involves fixed monthly payments over 10 years.

•   Income-driven repayment, specifically Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Based Repayment or Income-Contingent Repayment. These plans adjust your monthly student loan payments to a percentage of your discretionary income while extending your loan terms to 20 or 25 years. If you’ve made on-time payments but still have a balance at the end of your term, it may be forgiven. The amount forgiven may be considered taxable income by the IRS.

•   Extended repayment, which extends your repayment term to 25 years and lets you pay a fixed or graduated amount.

•   Graduated repayment, which lowers your student loan payments in the beginning and increases them every two years. You’ll pay off your loan over 10 years, and your final payments won’t be more than three times greater than your initial payments.

Grad PLUS loans are also eligible for certain federal forgiveness programs, such as Public Service Loan Forgiveness.

Other Options to Pay for Grad School

Grad PLUS loans aren’t the only way to pay for graduate school. Here are some alternative options:

Direct Unsubsidized Loans

You can borrow up to $20,500 per year in Direct Unsubsidized loans as a graduate student with an aggregate loan limit of $138,500, including any loans you borrowed as an undergraduate.

Here are the interest rate and disbursement fee for graduate students:

Interest Rate (for loans disbursed on or after July 1, 2023 and before July 1, 2024)	Disbursement Fee (for loans disbursed on or after Oct. 1, 2020, and before Oct. 1, 2024)
7.05%	1.057%

Grants and Scholarships

Besides student loans, you can also pursue grants and scholarships for graduate school. You can find grants and scholarships from a variety of sources, including the Department of Education, your state, your school or a private organization. By earning grants and scholarships, you might not need to borrow as much in student loans.

Private Student Loans

You can also explore your options for private graduate student loans from banks, online lenders or credit unions. Some lenders offer interest rates that start lower than Graduate PLUS loan interest rates and don’t charge an origination fee.

Although private student loans aren’t eligible for federal repayment plans or programs, some lenders offer flexible repayment options or deferment if you need to pause payments. But, because private student loans aren’t required to offer the same borrower benefits as federal student loans, they are generally borrowed as a last resort option after all other sources of financing have been exhausted.

The Takeaway

If you’re looking for ways to pay for graduate school, a Grad PLUS loan could help. You can use this flexible loan to cover your school’s cost of attendance, as well as choose from a variety of federal repayment plans when it comes time to pay it back.

A Grad PLUS loan, however, might not be your most affordable borrowing option. Depending on your credit and other factors, it may be possible to find a private student loan with an even lower interest rate than a Grad PLUS loan.

SoFi offers private student loans with competitive rates, no fees and flexible repayment terms. Learn more about SoFi’s no-fee private student loans.

FAQ

What kind of loan is Grad PLUS?

The Grad PLUS loan is a federal graduate student loan issued by the Department of Education. It is designed specifically for graduate and professional students.

Is there a max on Grad PLUS loans?

There is virtually no limit on the amount you can borrow with a Grad PLUS loan. You can borrow up to your school’s cost of attendance, minus any other financial aid you’ve already received.

Can Grad PLUS loans be used for living expenses?

Yes, you can use Grad PLUS loans to cover your living expenses while at school. You must use your loan on education-related expenses, which can include housing, food, supplies, transportation and other costs related to attending school.

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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.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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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Divorce can be emotionally and financially challenging, and one of the biggest concerns people have is how to finance the process. From filing and attorney fees to establishing separate households, the costs can quickly add up.

Knowing how to pay for divorce is particularly tricky because most people don’t necessarily plan for a divorce and, as result, likely don’t have a special bank account where they’ve been saving up for a divorce. This can leave you feeling stuck in a tight corner.

For anyone scratching their head and wondering how to pay for a divorce, we have some answers. Here’s a look at how you can cover the cost of divorce while still keeping an eye on your long-term (post-divorce) financial health.

How Much Does Divorce Cost?

We’ll start with the crummy news — getting a divorce, already a difficult experience, is also expensive. While the cost varies depending on where you live and the complexity of the divorce, the average cost of a divorce in the U.S ranges between $15,000 and $20,000. That said, a simple DIY divorce could run a lot less (as little as $200). A complicated divorce (with disagreements around child custody or dividing up property), on the other hand, could run well over $100,000. Gulp.

Factors that can affect the cost of a divorce include:

•   The state where the divorce takes place

•   Whether the couple lives in an urban or rural area

•   Whether it is contested or uncontested

•   Whether or not you hire professional legal help

•   The complexity of the couple’s finances

•   Whether or not there are child custody issues involved

How Do I Pay for My Divorce?

Ideally, every individual, couple, and family would have some emergency money set aside to cover unforeseen events. While many aren’t thinking the money would be for a divorce, that could qualify as an unexpected expense.

If you don’t have much, or any, rainy day savings, here are some steps that can help you manage the cost of your divorce.

•   Create a budget A good place to start is to assess your financial situation and create a realistic budget for your divorce. Take a look at your income, expenses, and any debts you may have. This will help you determine how much you can allocate towards your divorce costs, find areas where you may be able to cut costs, and develop a strategy to finance your divorce.

•   Negotiate with your spouse If possible, see if you can reach an amicable agreement with your spouse regarding the division of assets and paying expenses. This can help reduce legal fees and minimize the overall cost of the divorce process.

•   Explore mediation Mediation is a cost-effective alternative to traditional divorce litigation. A neutral mediator helps facilitate discussions between you and your spouse, allowing you to work together to reach mutually agreeable solutions. Mediation can often be less expensive and less time-consuming than going to court.

Borrow From Friends and Family

If you need some financial assistance to cover the costs of your divorce, reaching out to friends and family is one option to consider. Loved ones who understand your situation may be willing to lend you money to help you through this challenging time.

You’ll want to approach borrowing from friends and family with caution, however. You want to be sure that you’ll be able to pay the money back and clearly communicate that you intend to repay the money. Also be sure to discuss any expectations or terms, and ensure that the arrangement is legally documented to avoid misunderstandings or strain on personal relationships.

Recommended: Am I Responsible for My Spouse’s Debt?

Is a Personal Loan a Good Option to Pay for Divorce?

Another option to finance your divorce is to consider a personal loan.

Personal loans are often unsecured (meaning you don’t have to put up an asset as collateral) and can be used for a variety of purposes, including legal costs. They can provide you with the necessary funds to cover divorce-related expenses while allowing you to make manageable monthly payments over a fixed period, typically three to five years.

If you have good to excellent credit, a personal loan can be a better choice than using a credit card for your divorce costs, since rates are typically lower. A personal loan may also allow you to borrow a larger amount than your current credit card limit allows. Personal loans also come with fixed monthly payments, which can be easier to budget for.

Before applying for a personal loan for your divorce however, you’ll want to consider the annual percentage rates (APRs) and repayment terms offered by different lenders. Be sure to carefully assess your ability to repay the loan to avoid adding further financial stress during and after the divorce process.

Putting Your Financial Health First

While it’s crucial to address the immediate financial challenges of a divorce, it’s equally important to prioritize your long-term financial health. Here are some tips to help you navigate this process.

•   Protect your credit Divorce can have a significant impact on your credit score. To minimize the impact, you’ll want to be sure to close joint accounts and establish individual accounts. Be sure to also monitor your credit report regularly to ensure accuracy and address any issues promptly.

•   Update legal and financial documents It’s a wise idea to review and update your will, insurance policies, retirement accounts, and other legal and financial documents to reflect your new circumstances. You’ll also want to update beneficiaries and ensure your assets are distributed according to your wishes.

•   Focus on rebuilding After the divorce, take steps to rebuild your financial stability. Set financial goals, create a savings plan, and consider ways to increase your income or reduce expenses. Building a solid financial foundation will help you regain control of your life and prepare for the future.

Recommended: Budgeting Tips for Life After Divorce

The Takeaway

Financing a divorce can be a challenging task, but with careful planning and consideration, it is possible to navigate this process successfully. Key steps include assessing your financial situation, exploring various options such as negotiation and mediation, and, if needed, borrowing from friends and family or getting a personal loan to help cover the costs of the divorce.

If you are thinking about taking out a loan to finance a divorce, a SoFi unsecured personal loan could be a good option. SoFi personal loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.

See if a personal loan from SoFi is right for you

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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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It’s possible to consolidate or refinance your student loans into one loan with a single monthly payment. The major difference between these two options is that consolidation is offered through the federal government for federal student loans only. Refinancing is done with a private lender and can include both federal and private student loans.

When you consolidate student loans with the federal government through the Direct Loan Consolidation program, the new interest rate is the weighted average of your prior rates, rounded up to the nearest one-eighth of a percent.

Another option is student loan refinancing, which can be completed with a private lender. If you refinance, the new interest rate on your loans is based on factors like current market rates, your credit profile, your employment history, and your debt-to-income ratio.

Understanding the differences between consolidation versus refinancing is critical before deciding to take the plunge — especially since private refinancing means you lose your federal student loan benefits.

What Is Federal Student Loan Consolidation?

You can combine your federal student loans into one by taking out a Direct Consolidation Loan from the government.

Consolidating your loans may help simplify your repayment process if you have multiple loan servicers. However, consolidating doesn’t typically result in any interest savings, as the rate is simply the weighted average of the loans you’re consolidating, rounded up to the nearest one-eighth of a percent.

In some cases, consolidating your loans may also be necessary if you are interested in enrolling in an income-driven repayment plan. In order to use a Direct Consolidation Loan, you must have at least one Direct Loan or one Federal Family Education Loan (FFEL).

What Is Student Loan Refinancing?

When you refinance student loans, it means you are borrowing a new loan which is then used to pay off the existing student loans you have. You can refinance both federal and private student loans. The new loan will have a new interest rate and terms, which as mentioned, are based on personal factors such as an individual’s credit history, employment history, and debt-to-income ratio.

Refinancing is completed with a private lender and borrowers may have the choice between a fixed or variable interest rate. In some cases, borrowers who refinance to a lower interest rate may be able to spend less in interest over the life of the loan. To get an idea of what refinancing your student loans could look like, you can take a look at SoFi’s student loan refinancing calculator.

It’s important to note that when you refinance student loans with a private lender, you lose access to federal loan forgiveness programs and payment assistance programs, such as income-driven repayment plans and student loan deferment.

Recommended: How to Build Credit

Comparing Student Loan Refinancing and Consolidation

As previously mentioned, consolidation can be completed for federal student loans through a Direct Consolidation Loan. Refinancing is completed with private lenders and can be done with either federal and/or private loans. An important distinction is that Direct Loan Consolidation allows borrowers to retain the federal benefits and borrower protections that come with their federal loans, while refinancing does not.

Depending on how a borrower’s financial situation and credit profile has changed since they originally borrowed their student loans, refinancing could allow borrowers to secure a more competitive rate or preferable terms. The rate and term on a refinanced loan will be determined by the lender’s policies and the borrower’s financial situation and credit profile, including factors such as credit score, income, and whether there is a cosigner.

Private Student Loan Refinancing Rates

It may be possible for borrowers to qualify for a more competitive interest rate by refinancing their student loans with a private lender. As of June 2023, current student loan refinance rates with SoFi start at 4.99% APR with autopay for fixed rate loans and 5.99% APR with autopay for variable rate loans. As noted previously, the rate you get typically depends on your total financial picture, including your credit history, income, and employment history.

Borrowers may also consider applying for student loan refinancing with a cosigner, which could potentially help them qualify for a more competitive interest rate.

Why Interest Rates Aren’t the Only Thing to Consider

Interest rates aren’t the only thing to consider when deciding whether to consolidate or refinance. If you go with a Direct Consolidation Loan, keep in mind that you might pay more overall for your loans, since this usually lengthens your repayment term. You may also lose credit toward loan forgiveness for any payments made on an income-based repayment plan or the Public Service Loan Forgiveness program.

If you refinance with a private lender, you’ll no longer be eligible for federal loan protections, including deferment and forbearance. Some private lenders, however, do offer their own benefits, such as a temporary pause on payments if you lose your job through no fault of your own.

It’s important to think carefully before consolidating or refinancing your student loans. Consider things like whether or not you plan on using federal benefits, and if a prospective private lender offers any options for relief if you hit a rough patch.

Even if you get a lower interest rate, make sure you can afford the new monthly payments before committing. And remember that this information is just a starting point for your decision. Don’t be afraid of doing more research and trusting you’ll make the right decision for you.

The Takeaway

Consolidating federal student loans can be done through the federal government with a Direct Consolidation Loan. The interest rate on this type of loan is the weighted average of the interest rates on the loans you’re consolidating, rounded up to the nearest one-eighth of a percent. When you consolidate, you keep your federal benefits and protections.

Refinancing student loans allows borrowers to combine both federal and private student loans into a single new loan with a new interest rate. The rate may be variable or fixed, and will be determined by the lender based on criteria like market rates and the borrower’s credit history. Again, refinancing will eliminate any federal loans from borrower protections, including income-driven repayment plans.

Depending on an individual’s personal circumstances, either consolidation or refinancing may make more sense than the other. If refinancing seems like an option for you, consider SoFi. SoFi offers an easy online application, competitive rates, and no origination fees.

See if you prequalify with SoFi in just two minutes.

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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.

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.

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 .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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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