Becoming a medical professional takes a great deal of time, effort, and money. The average student loan debt burden for medical students is usually pretty staggering. While that amount may seem fitting for several years of schooling to become an expert in the medical field, it can be a seemingly insurmountable challenge for medical students who are still in training.
During a residency or fellowship program, income is not yet at a level that makes it possible to easily manage hundreds to thousands of dollars in student loan payments each month. This means medical students in residency or fellowship often opt to defer student loan repayment until they are earning six figures in a permanent position. However, deferment may mean accruing interest that adds to the total balance of the debt owed, ultimately increasing the amount of money due back to the student loan lender.
For some students, deferring is not an option, and they are responsible for coughing up a large portion of their income each month to pay student debts. But this leads to delaying other financial goals, like building an emergency savings, paying down credit card debt, or saving for a larger objective like a home purchase or retirement.
In order to manage personal finances in a realistic, simple way, refinancing medical student loan debt with a lender who understands these challenges may prove beneficial.
Who is Splash Financial?
Founded in 2013, Splash Financial, Inc., is a private student loan refinancing company focused in the medical school loans market. The company was created in order to meet medical residents where they are as it relates to their student loan debt, and help residents find a solution through refinancing federal and private student loans into a single, simplified loan. Splash Financial believes the medical students have the ability to make a significant difference in the world, but the financial obstacles that come with the low income during residency years make it difficult to see that potential for other lenders. The private student loan lender is focused on making things easier for medical residents with student debt across the board.
Splash Financial Benefits
Splash Financial offers several benefits to its medical resident borrowers, the most prominent being a monthly payment on a new refinanced loan as low as $1. The low initial monthly payment is fixed for up to 84 months during a borrower’s residency or fellowship, plus a total ten-year repayment period for refinanced loans. This means if a medical resident has five years (or 60 months) left in her residency or fellowship period, total repayment time is 15 years (or 180 months).
Splash Financial offers additional benefits to medical residency and fellowship students who wish to refinance their federal or private student loan debt. A discount of 0.25% is included in the loan when borrowers establish automatic monthly payments with Splash Financial. Additionally, Splash's student loan refinance rates range from 5.29% up to 5.44% for qualified borrowers and are only fixed. Because the interest rate is fixed, medical students do not need to be concerned about rising interest rates over time that impact variable-rate private student loans.
Splash Financial also provides a streamlined application process available through its online platform. Borrowers can quickly and easily input their application details, including time left in residency, total student loan debt amount, current income, and credit history, and receive a decision within a short period of time. Once a loan is funded and accepted, medical student loan borrowers start repayment with Splash for as little as $1 per month. Having such a low payment throughout their time as a medical resident gives the student more power to control their financial life and save toward other relevant goals. The company also offers a vast number of resources online, intended to assist medical residents in understanding their student loan debt and their bigger financial picture.
Alternatives to Splash Financial
Splash Financial is not the only medical resident and fellowship student loan refinancing company available today. SoFi, a large private student loan refinancing company, recently announced its student loan program available specifically for medical residents with student loan debt, at either fixed or variable interest rates. Similarly, Laurel Road, often referred to as the original resident refinance lender, offers loans with fixed interest rates in the same range as Splash Financial. Link Capital also provides options for medical residents, with interest rates based on creditworthiness and projected income.
Splash Financial is a smart option for medical residents who are in need of an alternative to paying the full amount due on their federal or private student loan debt, or those who do not want to defer payments and incur interest accrual over time. Medical residents should consider the benefits and the caveats to refinancing student loan debt with a private student loan lender before signing on the dotted line.