Best private loans for medical students

Introduction

For medical students and their families seeking private financing, Sallie Mae, College Ave, and SoFi currently offer the strongest combinations of residency deferment options, competitive interest rates, and flexible repayment terms. While federal loans should generally be the first stop for funding, private medical school loans play a crucial role in bridging gaps between federal limits and the total cost of attendance, or in securing lower interest rates for borrowers with excellent credit.

Medical school presents a unique financial challenge: high upfront costs followed by years of residency where income is relatively low. This guide covers the top private lenders specifically tailored to these needs, comparing their residency deferment policies, interest rates, and cosigner release options. You will learn how to evaluate these lenders strategically to ensure financial stability from the first year of medical school through board certification.

Context: what makes medical school financing different

Medical school financing is distinct from standard undergraduate or graduate borrowing due to the sheer scale of the investment and the extended training timeline. According to the Association of American Medical Colleges (AAMC), the median medical school debt for the class of 2023 was $200,000. When factoring in the total cost of attendance (COA)—which includes tuition, fees, books, and living expenses in often-expensive metropolitan areas—the financial requirement for a four-year degree frequently exceeds $250,000 or even $300,000.

Federal loans provide a strong foundation, but they have limitations. According to StudentAid.gov, while medical students have higher annual limits for Direct Unsubsidized Loans ($40,500 to $47,167 for health profession students as of the 2024-2025 award year), this often does not cover the full COA. Students can utilize Federal Grad PLUS loans to cover the remainder, but these come with higher interest rates and significant origination fees. StudentAid.gov reports that origination fees are 4.228% for Grad PLUS loans disbursed before October 1, 2025.

Furthermore, the repayment trajectory for doctors is unique. After graduation, physicians enter residency and fellowship programs lasting 3 to 7 years. According to AAMC data, during this time, the average resident stipend is approximately $60,000 to $70,000. Standard student loans with a 6-month grace period may enter full repayment while the borrower is still in training, creating a cash-flow crisis. This necessitates financing options specifically designed to accommodate the “training gap” before peak earning years begin.

For a deeper understanding of government options, review our Federal Student Loans Guide.

Top private lenders for medical students: quick comparison

When evaluating private lenders for medical school, four criteria are paramount: residency deferment length, interest rates (compared to the federal Grad PLUS rate), lack of origination fees, and cosigner release policies. The following lenders have been selected because they offer specific “Medical School Loan” products that address these needs, rather than generic graduate loans.

Key selection criteria:

• Residency deferment: Does the lender allow you to postpone full payments during residency?
• Cost efficiency: Are the interest rates lower than the current federal Grad PLUS rate?
• Flexibility: Are there options to reduce payments during fellowship or residency?
• Coverage: Can you borrow up to 100% of the school-certified cost of attendance?

Source: Lender websites (terms and rates effective as of January 2025, including autopay discounts where applicable)

How to use this table: If you plan on a long specialization (like neurosurgery), prioritize Residency Deferment. If you have a creditworthy cosigner and want to beat federal rates, focus on the low end of the APR Range. Always check if the lender covers 100% of the Cost of Attendance (COA) to ensure you aren’t left with a funding gap.

Detailed lender profiles: features and benefits

While the table above provides a snapshot, the specific terms of medical school loans vary significantly. Below is a detailed breakdown of the top lenders, highlighting the nuances that impact medical students and their families.

Sallie Mae is a dominant player in the medical lending space largely due to its generous deferment policy. According to Sallie Mae’s product terms, their Medical School Loan allows students to defer payments while in school and for a grace period of 36 months after graduation, which is designed to cover a significant portion of residency. This is distinct from their standard graduate loans.

• Residency/Internship deferment: Borrowers can defer payments for up to 36 months during residency or internship.
• Interest rates: Offers both fixed and variable rates. As of January 2025, Sallie Mae offers fixed rates of 2.89% - 17.49%^{1 APR with autopay.}
• Unique benefit: Includes a specific “Medical Residency and Relocation Loan” option for final-year students to cover interview travel and moving costs, which federal loans generally do not cover directly.

College Ave is known for its customizable loan terms, allowing borrowers to choose their repayment timeline (5, 8, 10, or 15 years) to manage monthly budget impact. Their medical school product is highly competitive regarding flexibility.

• Repayment options: Students can choose to pay interest-only, a flat $25 fee, or make full payments while in school.
• Residency deferment: Like Sallie Mae, College Ave offers up to 36 months of deferment during residency, ensuring that new doctors aren’t overwhelmed by bills before their income rises.
• Fees: There are no origination, application, or prepayment fees, which can result in savings compared to the ~4% fee on Federal Grad PLUS loans.

SoFi positions itself as a premium lender for borrowers with strong credit profiles. They often offer some of the most competitive rates in the market for students with excellent credit history or strong cosigners.

• Membership perks: Borrowers gain access to financial planning advice and career coaching, which can be valuable for navigating physician compensation contracts.
• Residency provisions: According to SoFi’s terms, residents can pay $100 per month during their residency and fellowship programs for up to 54 months (4.5 years), preventing the balance from ballooning as fast as it would in full deferment.
• No fees: SoFi charges no late fees, origination fees, or insufficient fund fees.

Earnest utilizes a unique underwriting model that looks beyond just credit scores, considering savings patterns and earning potential. This can be advantageous for non-traditional medical students.

• Grace period: Earnest offers a 9-month grace period after graduation, which is 3 months longer than the federal standard.
• Rate match guarantee: If you find a lower rate with another lender, Earnest states they will match it and give you a $100 Amazon gift card (terms apply).
• Skip-a-payment: Eligible borrowers can skip one payment every 12 months, providing a safety valve during unexpected financial tight spots.

Citizens Bank offers a solid option for those who already bank with them, as they provide rate discounts for existing customers. Their medical loan product is robust and covers a wide range of health degrees.

• Multi-year approval: Citizens offers multi-year approval, meaning you may not need to undergo a hard credit inquiry every single year you need funding, simplifying the administrative burden.
• Aggregate limits: According to Citizens Bank, they have high lifetime aggregate limits (up to $350,000 for medical degrees as of January 2025), accommodating the high cost of private medical schools.
• Cosigner release: Cosigner release is available after 36 consecutive on-time principal and interest payments, allowing parents to exit the loan obligation once the student is an attending physician.

Understanding the evaluation criteria

To make an informed decision, it is essential to understand the mechanics behind the loan features. For medical students, the priority of these criteria differs from that of a typical undergraduate.

This is arguably the most critical factor. Residency lasts a minimum of three years, and fellowships can add another 1–3 years. During this time, if a private loan enters full repayment immediately after a standard 6-month grace period, the monthly payments on a $200,000 balance could easily exceed $2,000—taking up nearly 50% of a resident’s take-home pay. Lenders offering 36+ months of deferment or reduced payments allow you to manage cash flow until your income jumps to attending physician levels.

Medical training is a long game. A first-year medical student will not reach peak earning potential for 7 to 10 years. While variable rates often start lower than fixed rates, they pose a significant risk over such a long duration. If market rates rise during your four years of school and three years of residency, your interest expense could skyrocket. Most medical students prefer fixed rates to lock in certainty.

Many parents utilize their strong credit to help students secure low interest rates. However, parents often want to know they won’t be liable for this debt forever. “Cosigner release” allows the primary borrower (the student) to remove the cosigner from the loan after meeting specific requirements—usually graduating and making a set number of on-time payments (typically 12 to 48 months). This protects the parents’ credit and debt-to-income ratio as they approach retirement.

How to choose: decision framework for medical students

Selecting the right financing is not just about finding the lowest number; it is about matching the loan terms to your career timeline. Use this framework to guide your choice.

Before applying for private loans, ensure you have accepted the full amount of Federal Direct Unsubsidized Loans available to you. According to StudentAid.gov, medical and health profession students can borrow $40,500+ annually. These have lower origination fees than Grad PLUS loans and offer the best federal protections.

Once Unsubsidized loans are maxed, you must choose between Federal Grad PLUS and Private Loans for the remaining cost.

• Choose Federal Grad PLUS if: You plan to work in a non-profit hospital or academic setting (qualifying for Public Service Loan Forgiveness), or if you do not have a creditworthy cosigner.
• Choose private loans if: You have excellent credit (or a strong cosigner) and can secure a fixed rate significantly lower than the Grad PLUS rate (plus the ~4% fee margin), and you plan to enter private practice where forgiveness programs don’t apply.

• Long residency (surgery, sub-specialties): Prioritize Sallie Mae or College Ave for the 36-month deferment options.
• Strong family finances: If parents are cosigning and want the lowest absolute cost, compare SoFi and Earnest for competitive rates.
• Need flexibility: If you are unsure about your specialty, look for lenders with flexible repayment terms like College Ave.

• Check your credit score and your cosigner’s score (700+ usually secures better tiers).
• Gather proof of enrollment and Cost of Attendance figures from your financial aid office.
• Request pre-qualified rates from at least three lenders (this typically involves a soft credit pull that does not hurt your score).

According to Mark Kantrowitz, a leading financial aid expert, “Private loans can be a good option when federal loans don’t cover the full cost of attendance, or when the borrower has excellent credit that qualifies for rates lower than the federal offerings.”

Once you have determined that private financing is the right strategic move for your situation, comparing personalized rates is the next step.

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Federal vs private: strategic borrowing for medical students

The debate between federal and private loans is more nuanced for medical students than for almost any other group. The potential for Public Service Loan Forgiveness (PSLF) makes federal loans incredibly valuable for doctors.

If you work for a 501(c)(3) non-profit hospital or government organization—which includes many residency programs and academic medical centers—you may qualify for PSLF. After 120 qualifying monthly payments (10 years), the remaining federal debt is tax-free forgiven. Since residency counts toward these 10 years, many doctors can have substantial debt wiped out shortly after becoming attendings. Private loans are never eligible for PSLF or federal Income-Driven Repayment (IDR) plans.

Private loans make sense in specific scenarios:

1. Interest rate arbitrage: If the Federal Grad PLUS interest rate is high (e.g., 8-9%) plus a 4% fee, and a private lender offers you 6% with zero fees, the private loan is mathematically cheaper if you pay it off in full.
2. Private practice intentions: If you plan to join a private practice or for-profit group immediately, you will not qualify for PSLF. In this case, minimizing interest accrual via the lower rates of private loans is a sound strategy.
3. Gap expenses: Private lenders offer “Residency and Relocation” loans for 4th-year students to cover interview travel and moving costs, expenses that federal student loans generally cannot cover directly.

For more details on forgiveness programs, read our Public Service Loan Forgiveness Guide.

Frequently asked questions

Yes, medical students are more likely to be approved without a cosigner than undergraduates because of their high future earning potential. However, qualifying for the lowest advertised interest rates typically still requires a creditworthy cosigner or an excellent personal credit history and income.

It depends on the lender. Specialized medical school loans (like those from Sallie Mae or College Ave) offer deferment periods where you make no payments or reduced payments during residency. Standard private loans may enter full repayment immediately after a 6-month grace period.

Private loan rates are based on creditworthiness. For borrowers with excellent credit (750+), private rates can be 1–3 percentage points lower than Federal Grad PLUS rates. Additionally, private loans lack the ~4% origination fee charged on Grad PLUS loans, offering immediate savings.

Yes, many lenders allow you to refinance during residency. Some specialized “resident refinance” products allow you to lock in a lower interest rate while keeping monthly payments low (e.g., $100/month) until you become an attending physician.

Yes, this is often called a “Residency and Relocation Loan” for medical students. It is designed to cover the costs associated with residency interviews, travel, and moving expenses in your final year of medical school.

Most private lenders require a minimum credit score in the mid-600s (e.g., 650–680) for approval. However, to qualify for the most competitive interest rates that beat federal options, a score of 740 or higher is typically necessary.

Financing a medical degree requires a strategic balance between minimizing immediate costs and maintaining future flexibility. While the debt load can be daunting, medical graduates have one of the lowest default rates of any borrower group, making them highly attractive to lenders.

Summary of takeaways:

• Prioritize federal loans: Always exhaust Federal Direct Unsubsidized Loans first due to their protections and forgiveness potential.
• Compare for the gap: For costs exceeding Unsubsidized limits, compare the total cost (Rate + Fees) of Federal Grad PLUS against private lenders like Sallie Mae, College Ave, and SoFi.
• Check deferment terms: Ensure your chosen private lender offers residency deferment that matches your expected training timeline.
• Shop around: Interest rates vary daily. Obtaining pre-qualified rates from multiple lenders ensures you aren’t leaving money on the table.

Taking the time to compare your options now can save you thousands of dollars in interest over the life of your career.

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References and resources

• Association of American Medical Colleges (AAMC): Data on medical student debt and tuition costs.
• StudentAid.gov: Official source for Federal Direct Unsubsidized and Grad PLUS loan rates, fees, and limits.
• Sallie Mae, College Ave, SoFi, Earnest, Citizens: Lender websites accessed for specific product terms and interest rate ranges (January 2025).
• College Finance Federal Loans Guide: Comprehensive information on government borrowing options.