Becoming a vet can be a very lucrative career path. The average starting salary for veterinarians entering the company practice was $ 106,053 in 2021, according to the American Veterinary Medical Association. But even with a salary of that size, it may take some time to pay off your student debt.
If you’re looking for ways to pay off your vet school loans faster, refinancing could be a solid option. Here’s how to tell if it’s the right choice for you.
By visiting Credible, you can learn more about student loan refinancing and compare the rates of multiple private student loan lenders.
How to Refinance Vet School Loans
Refinancing veterinary school loans works in much the same way as refinancing other student loans. This involves turning multiple federal or private student loans into a new private loan, ideally with a better interest rate.
If most of your loans are federal student loans, you may be better off consolidating them into a direct consolidation loan instead of refinancing them. A direct consolidation loan is provided income-based repayment options, tolerance and access a student loan amnesty programs. If you decide to refinance federal student loans with a private lender, you will lose those federal protections.
Whichever option you choose, the process for refinancing your loans works like this:
- Shop around for the best rate. Get quotes from three to five lenders so you can be sure you’re getting the best rate.
- Choose a lender. Once you have the quotes in hand, choose the lender that works best for you.
- Fill out a loan application. Answer the questions related to your personal data, income and existing debt.
- Sign the paperwork. If you are approved, you will read the loan documents and sign on the dotted line.
- Start paying off your new loan. Once the documents have been signed, the lender will pay the funds. Continue making payments on your existing loans until you receive written confirmation that they have been paid. Then you will start paying off your new loan.
Requirements for Refinancing Veterinary School Loans
Private student loan companies establish your own refinancing requirements, so they can differ from lender to lender. But in general, lenders will look at the following:
- Sufficient work history – Your lender will review your work history to make sure you are able to make loan payments.
- Good credit score – Lenders consider your credit score as an indicator of the likelihood of repaying the loan. If your credit needs work, apply with a cosigner who has good credit to increase your chances of getting approved and getting a better rate.
- Decent debt / income ratio – Lenders also look at yours debt / income ratio, which is a measure of how much income you have relative to your existing debts, before approving yourself for a loan. This helps them determine if you have enough income to handle an additional debt payment.
You can easily compare pre-qualified rates from multiple lenders using Credible.
What to consider on veterinary school refinancing
Like any other financial decision, refinancing your vet school loans has both advantages and disadvantages.
Pros of refinancing
- You could save money. Depending on the current interest rates and the new loan term, there is a good chance that the refinance will lower your monthly payment.
- You will only have one payment. If it is difficult for you to juggle multiple payments, refinancing can help you streamline them into one payment.
Cons of refinancing
- You will lose the benefits of the federal loan. If you refinance federal student loans with a private lender, you will lose access to federal benefits such as deferralforbearance and student loan amnesty programs.
- You may have to meet some high financial requirements. In general, refinancing with a private lender means having to meet stringent financial requirements with your credit score as well debt / income ratio. But you can always apply with a cosigner to strengthen your financial profile.
The best lenders to refinance vet school loans
While there aren’t many lenders that specialize in refinancing veterinary school loans, most lenders that refinance student loans will accept veterinary program loans. When evaluating potential lenders, consider the following criteria:
- Interest rate – Look at the lowest rate offered by each lender and whether they offer a fixed interest rate or a variable interest rate.
- Duration of the loan – It is important to consider how long the repayment period will last, so that you can plan how long you will be making loan payments. Consider what different repayment options are available to you.
- Maximum loan balance – Find out whether or not you can borrow enough to cover your existing debt.
- Commissions – Make sure you are aware of any fees the lender will charge for refinancing your student loan debt.
- Discounts – If the lender offers discounts, see which ones you will qualify for. For example, many lenders offer a rate discount if you set up automatic payments.
- Cosigner – If you think you need a co-signatorycheck if the lender offers the option to release your cosigner after making a certain number of payments.
Alternatives to refinancing
If you feel that refinancing your vet school loans is not right for you, here are some alternatives to consider. Keep in mind that these options won’t help you pay off your loans faster, but they may make your monthly payments more manageable.
- Income-based repayment plans – Federal student loan borrowers have the option to choose an income-based repayment plan, which limits the monthly payment to a percentage of current taxable income and family size.
- Tolerance – The forbearance temporarily suspends student loan payments, but interest continues to accumulate on the loans and will be added to the principal balance at the end of the grace period.
- Deferral – The deferral of the loan also temporarily suspends payments, although usually for a longer period of time than the granting. You may need to have a qualifying life event to qualify for deferral. For federal loans, the federal government will stop accumulating interest while you are on a deferral.
To start refinancing your student loans, visit Credible and compare pre-qualified rates from multiple lenders.