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Student loan refinancing in the absence of the "attending contract"

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  • Student loan refinancing in the absence of the "attending contract"

    The student loan refinancing model that I'm most familiar with is that of the imminently graduating resident physician with a W2 employee attending contract in hand. As a current resident, that may be the future situation for me, but I'm also looking into some private practice options which (to my understanding) may complicate the student loan refinance process. I was wondering if anyone with more knowledge on the topic than I would be able to shed some light on how refinancing would work in the 3 scenarios below:

     

    1 - Graduating resident is joining a private practice as an associate with an initial contract with low base (guaranteed) pay, but a generous production based incentive structure (i.e. 100K base with 80% of all collections over 200K, hits 500K collections and gets 240K added to base for a gross of 340K)

    2 - Graduating resident is buying an existing practice (i.e. last year practice had a gross of 900K with 50% overhead for a net of 450K, first year under new ownership business falls of a little and gross drops to 680K with continued 50% overhead for a net of 340K)

    3 - Graduating resident starts their own private practice from scratch (i.e. practice grosses 500K first year out but startup costs and overhead are 80% for a net of 100K)

     

    Basically, will any of these companies refinance you at a desirable attending interest rate without a guaranteed employee contract, or do you have to wait a year, submit your previous year's tax return and prove you're actually making money in private practice?

     

  • #2


    Basically, will any of these companies refinance you at a desirable attending interest rate without a guaranteed employee contract, or do you have to wait a year, submit your previous year’s tax return and prove you’re actually making money in private practice?
    Click to expand...


    The contract should suffice for scenario #1 but I believe only the base will count when calculating what you qualify for with a physician home loan co. The experience with our clients has been that they must wait a year and submit proof of income for #2 and #3.

    I am interested to see if anyone else has found another route to refi sooner.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      If you are still a resident and you can show recent pay stubs, last year's W2, etc., to give you a good enough debt-to-income ratio, several lenders will refinance your loans without an attending contract.

      Generally a lender wants something reliable like paystubs or other evidence of guaranteed income (base pay in contract) before they will refinance you. #2 and #3 seem a little hairy but the only answer is to call up the lenders and ask.  It might take awhile before you find someone who understands your situation.

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      • #4
        You're talking student loan refi, not home loan, right?

        Honestly, you would do well just to ask the lenders, e.g. SoFi. They want your money and, as such, are pretty responsive. They're not shy about calling, either, esp for unfinished applications.

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        • #5




          You’re talking student loan refi, not home loan, right?

          Honestly, you would do well just to ask the lenders, e.g. SoFi. They want your money and, as such, are pretty responsive. They’re not shy about calling, either, esp for unfinished applications.
          Click to expand...


          SoFi in my experience has been pretty poor when it comes to having any sort of a complicated question, either on the phone or in email.

          DRB is hit and miss depending on who answers your call or email.

          I had luck with Earnest most recently and had pretty competent people reply each time.

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          • #6
            True as that may be, I can't imagine the question of ways of demonstrating an income level would be too complicated or out of left field for a lender which regularly deals with physicians and other professionals who may be paid in several different ways. Although I guess you've always got the risk of getting a drone on the other end of the line who can't deviate from a well-worn routine.

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            • #7
              Yeah, I was talking about student loan refi. Sounds like a call to the lender would be in order for any scenario varying from the W-2 employee norm, and if there's no way to prove an acceptable debt to income ratio for the first year out you might be stuck with 6-7% for year #1 and refi in year #2.

              Does anyone here have personal experience with a student loan refi in a private practice (no guaranteed income) scenario?

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