SoFi, an innovative online lending platform, announced their new Medical Resident Student Loan Refinancing product last week. SoFi has already made its name in the student loan refinancing business, and the move by SoFi to corner the medical student market is yet another way to extend its services to student loan borrowers, its main group of customers.
When asked about the product, Senior Vice President of Product Management at SoFi, Meron Colbeci, commented, “we’re providing an easy, affordable way to help residents take control of their debt early on in their career.” The press release provided more details on the product.
The student loan product offers a low fixed rate or variable rate starting at 3.065 percent and topping off at 7.755 percent. Qualified applicants must take out a minimum of $10,001.
Qualified students are eligible for up to 54 months of compound-free interest during their residency, and medical residents are required to make $100 monthly payments during this time period. After residency, five different repayment terms are offered, ranging from five to twenty years. Once repayment starts, the loan amortizes to a standard repayment schedule, and the interest capitalizes.
So Why Is It So Special?
For those who are pursuing medicine, the toughest challenges are not in the emergency room or on the operating table; instead, it is dealing with student debt from extensive schooling. The median student debt for medical students has eclipsed $190,000 as of 2016, and future doctors are starting to feel the pinch as soon as they graduate.
As of 2016, the average salary of a residency in the United States was $60,000. While this is a good salary, it must be compared to the typical $200,000 of student debt for a typical medical student.
SoFi’s product allows doctors and specialists to get a leg up on their student loan debt in a loan environment that often focuses on undergraduates. Many aspiring doctors who are working towards their full credentials struggle to meet the obligations of their old grad school loans, which are often from private lenders with harsher terms.
Interestingly, SoFi’s new medical resident refinancing product has come out to great fanfare in both the lending and medical worlds. Jason DiLorenzo, Founder and Executive Director of Doctors Without Quarters, commented that the SoFi option is attractive “for residents and fellows who have determined refinancing is suitable.”