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Which option is better? (Loan repayment)

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  • Dreamgiver
    replied
    you will get a rate in the 2-3% range if you go with a variable rate loan

    Leave a comment:


  • platter
    replied
    Thank you guys.

    Is it is worth it to finance if the best rate I'm getting is 4.625%? Current rate with Greatlakes is 6.55%. That's a saving of $935 (if I refinance for 50K) vs. $ 1347 (for 70K) per year and I lose the security of deferment/forbearance in case an emergency happens.

     

    I was hoping for a rate in the 2-3% range but guess not.

    Leave a comment:


  • shantster
    replied




    You’ll have a better shot at refinancing as an attending, so you might want to take advantage of this window prior to fellowship to lock in a low rate, especially with interest rates rising. Who knows what they’ll be in a few years?
    Click to expand...


    Agree with this plan, though with one caveat: If going from attending salary to fellow salary in June, you will not have as much money to spend on the loans each month. Rather than put in a big $20K lump sum, I would consider refinancing the entire loan amount now ($70K) and save your $20K to supplement your monthly payments throughout fellowship. Divided over the entire 36 months of fellowship, that will give you an additional $555/month to be able to pay towards your loans so you can use that in calculation of the appropriate terms that you like. Enough though you lose the ability to do the lump sum upfront, it might allow you to get into a more favorable interest rate through the ability to afford a higher monthly payment. You would have to run the numbers once looking at refinance options.

    Leave a comment:


  • PhysicianOnFIRE
    replied
    You'll have a better shot at refinancing as an attending, so you might want to take advantage of this window prior to fellowship to lock in a low rate, especially with interest rates rising. Who knows what they'll be in a few years?

    As luck would have it, I published a Student Loan Resource Page yesterday with many links to different posts, calculators, and other resources from experts on the subject including WCI. I also promise to donate $50 to a charity of your choice if you refinance via one of my links.

    Leave a comment:


  • platter
    started a topic Which option is better? (Loan repayment)

    Which option is better? (Loan repayment)

    I had about 105K in student loans (combination of unsubsidized and subsidized direct loans at 6.8%). Because I was leaning towards private practice in less than 10 years out of medical school and because I have an extreme fear of debt having seen parents make bad financial decisions, I opted against PLSF with plans to pay off asap. Perhaps I made a bad choice too..I'm not sure.

    I'm currently in my 1st year as an attending but will go back to being a fellow this June for another 3 years. I have aggressively paid this year and brought loans down to 70K. Plan to reduce to 50K by June when I start fellowship and I'm paying the unsubsidized portion first.

    1) Assuming that most of the 50K that remains is the subsidized portion, is it better to refinance at a reduced interest rate now OR to enroll back in one of the IBR/PAYE programs when I start fellowship (I already did 3 years of it during residency and I think the cap on govt paying interest on subsidized loans was 3 years which I've used up but I don't remember this clearly and am unable to find straight forward information).  I'm married and my income during fellowship will be between 60K (if I'm the sole earner) to 90K depending on whether spouse works or not.  90K is more likely.

    2) Is there any benefit at all in paying unsubsidized loans before subsidized in my current situation?

    Thanks for your help!
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