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January 10, 2022

6 Best Loans to Finance Your Medical School Journey

Badyah Senussi and Munazza Khan

Many fight hard to get into medical school, but what comes after the acceptance letter (and the immense joy it brings) is the dread of financing the coming four years. Tuition, living expenses, books, USMLE fees - the list goes on!

Finding a way to pay off the huge amount of tuition and fees while also maintaining your grades, passing USMLEs, balancing your social life, and saving lives can be quite overwhelming. And to top it off - there is a lack of resources to help you make the right financial decision. But that's where we come in.

Before we go into the details, here is a quick order of operations to pay for medical school:

Own Savings ---> Scholarships and Grants ---> Direct Subsidized/Unsubsidized Loans ---> Direct PLUS Graduate Loans ---> Private Student Loans

Private student loans are one way to go, and in many cases the only way after exhaustion of personal/family savings and Direct Subsidized/Unsubsidized Loans or Direct Plus Graduate Loans! We’ll be talking about these in detail later on.

Not into the idea of loans at all? There are a few other options discussed here.

Before we dive into the 6 best loans for medical school, let’s discuss all of your expenses throughout medical school to give you a proper gauge on how much $$$$ you’ll need: 

Average living expenses per month-

Rent: $1,098

Groceries: $355.50

Phone and Internet Bills: $165

Car payments: New cars: $568 / Used cars: $467

Subscriptions: $37.73

Average tuition costs-

Private Medical School: $59,555 / Public Medical School: $49,842

Medical School Books and Equipment: $1,240

USMLE applications: $4,039

USMLE exams: $3,067

Residency interviews/traveling for interviews: $4,600


So what are your loan options? We’ll be going down the rabbit-hole from the best options to the worst, so buckle up please!


Federal Direct Unsubsidized Loan

Pros:

  • Loan terms: 10-25 years, depending on the repayment plan
  • Loan amounts available: Up to $20,500 per year and $73,000 in aggregate, including loans used for undergraduate study
  • Low fixed interest rate and no co-signer required in order to get the lowest rate
  • Income-driven repayment options that can lower the amount due and loan forgiveness for those who work in public service fields

Cons: 

  • Charges an origination fee of 1.057%

Federal Graduate PLUS Loan

Pros:

  • Loan terms: 10-25 years, depending on the repayment plan
  • Loan amounts available: Up to total cost of attendance, minus other financial aid received
  • Low fixed interest rate
  • Multiple repayment and forgiveness options available
  • High maximum loan amount

Cons: 

  • Charges an origination fee of 4.228%
  • Requires a credit check

Moving onto private loans...

Ascent

Pros:

  • Loan terms: 7, 10, 12, 15, or 20 years for variable-rate loans; 7, 10, or 12 years for fixed-rate loans
  • Loan amounts available: $2,001 to total cost of attendance; $200,000 per year in Ascent loans, in aggregate
  • US citizens, Permanent residents, DACA status applicants do not require a co-signer
  • Residency deferment options: 48-month deferment period, during which residents who receive low incomes compared to their future earning potential available
  • Grace period of 36 months available after graduation

Cons: 

  • High maximum interest rate
  • May need to have more than two years of credit history for a loan without a co-signer

Citizens Bank

Pros:

  • Loan terms: 5, 10, or 15 years
  • Loan amounts available: $1,000 to $350,000 aggregate, including federal and private loans, for medical students
  • Signing up for automatic payments can reduce interest rate by 0.25%; if you have a qualifying Citizens Bank account, you earn an additional 0.25% off
  • Residency deferment options: borrowers can defer payments for up to eight years total, including residency
  • Available to international students with a U.S. citizen co-signer

Cons: 

  • Grace period of 6 months only
  • No interest rate estimate with soft credit check

College Ave

Pros:

  • Loan terms: 5, 8, 10, 15, or 20 years
  • Loan amounts available: $1,000 to total cost of attendance, up to a maximum of $150,000 in College Ave student loans
  • Residency deferment options: borrowers can defer payments for up to eight years total, including residency
  • Autopay enrollment qualifies you for a 0.25% interest rate discount; with a qualifying Citizens Bank account, you earn an additional 0.25% discount
  • Available to international students with a U.S. citizen co-signer

Cons: 

  • Grace period of 6 months only
  • No interest rate estimate with soft credit check


Salli Mae

Pros:

  • Loan term: 20 years
  • Loan amounts available: $1,000 to up to total cost of attendance, no maximum for medical students
  • Residency deferment options: 48 months of residency deferment available, 36-month post-graduation grace period
  • Autopay enrollment qualifies you for a 0.25% interest rate discount

Cons: 

  • Only one loan term available
  • Strongly encourages adding a creditworthy co-signer


We all know that medical school is expensive, and according to the AAMC, the average medical school debt for 2020 graduates was $207,003. Federal Student Loans are the best overall, as they give you access to income-driven payment plans such as Pay-As-You-Earn (PAYE) and Income-Based Repayment. Citizens Bank’s variable and fixed interest rates are some of the lowest available, and their multiyear approval program qualifies you for multiple years of funding upfront, saving you multiple hard credit checks. College Ave is the best for repayment terms as you have five term options to choose from, and Salli Mae and Ascent medical school loans are the best for flexibility in starting your payments, with a 36-month grace period and the option to defer payments during residency. Ascent borrowers can also get a cash back reward of 1% of the loan’s original principal balance upon graduation. 

Good luck financing your medical journey! And we hope you’re taking a moment to congratulate yourself on that acceptance letter! Figuring out the finances is not easy, but we hope these tips will help you navigate the upcoming medical journey. 


About the Authors:

Badyah Senussi is a graduate of California State University, Sacramento, with a B.S. in Biomedical Science. During her time at university, she was a Peer Assisted Learning (PAL) Facilitator, where she ran a classroom of students, helped them complete worksheets (specifically in physiology), and held office hours. Her ambition is to become a physician with a focus on mental health. In her free time, she enjoys hiking, baking, and writing jokes in hopes of doing stand-up comedy someday.

Munazza Khan recently graduated from Gulf Medical University with a BS in Biomedical Sciences. As someone who was drawn to Cancer Biology early on in her second year, she is currently researching the immune response to hypoxic stress in a tumor microenvironment and how immunotherapy could be used in the future. She is also an avid cat and plant lover, but sadly, her cat is on a mission to destroy any plants in sight. Her hobbies include playing soccer and board games.

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