So you’re a pharmacy resident and you’re trying to keep up with your debt while in residency. The problem is, your 6.8% interest rate is killing you and making it nearly impossible to make any progress on your principal with your resident salary. Your main goal for student loan debt is to demolish it as quickly as possible.
Refinancing can save you thousand of dollars in interest but you’re not sure if you should refinance now, or wait until you’re making pharmacist salary. If you’re not sure refinancing is right for you, start by reading these two posts Three Refinancing Surprises and Four Refinancing Disasters to Avoid.
Refinancing as a Resident
There are two main things to consider about refinancing as a resident. The first is that the biggest predictor of interest rate is your debt:income ratio. As a resident this ratio is probably not very good. The second that predicts your eligibility is cash flow. If you are able to qualify for refinancing based on debt:income and cash flow it’s likely your interest rate will be less competitive.
My best suggestion is to use the freebie rate calculators to figure out if you’re eligible. You can get a rate quote from Earnest by using this link. Using the 2 minute rate calculator tool doesn’t impact your credit.
If you’re eligible for refinancing as a resident it’s almost certain your interest rate will be lower than the federal 6.8%. So will youo be stuck with a meh interest rate because you refinanced early or can you re-refinance?
With Earnest you are eligible to refinance a second time after making six months of on-time consecutive payments. You can apply to re-refinance your loans and your finances at the time of reapplication are considered.
Refinance Now or Wait?
You might be wondering how to decide if it’s right for you to refinance now, or to wait until you’re making a pharmacist salary. First, you want to be sure your main goal is to pay off your debt as quickly as possible and that you understand the downsides of refinancing. If refinancing is right for you and you’re eligible for it here are a few things to consider.
- How many months until you’re making pharmacist pay? If it’s less than six months you may want to consider waiting until you’re a pharmacist to refinance so you don’t get stuck with a higher interest rate while you’re eligible for a lower rate.
- Do you have a written job offer already? If you have a written job offer you can apply with that as long as it includes your salary and you position is starting within six months.
Are you a pharmacist who has already refinanced or are you still in residency and thinking about refinancing? I would love to hear what you decided to do and how your experience went. Leave me a comment below or head over to the Repayable Facebook Page.
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