Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.
Becoming a veterinarian can be a very lucrative career path. According to American Veterinary Medical Association. But even with a salary of this size, it might take you 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 determine if this is the right choice for you.
By visiting Credible, you can learn more about refinancing student loans and compare rates from several private student lenders.
How to Refinance Veterinary School Loans
Refinancing veterinary school loans works much the same as refinancing other student loans. This involves turning several 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 might be better off consolidating them into a direct consolidation loan instead of refinancing them. A direct consolidation loan comes with reimbursement based on income options, abstention and access to student loan forgiveness programs. If you decide to refinance federal student loans with a private lender, you will lose these federal protections.
Whichever option you choose, the process of refinancing your loans works as follows:
- Shop around for the best rate. Get quotes from three to five lenders to make sure you get the best rate.
- Choose a lender. Once you have the quotes in hand, choose the lender that suits you best.
- Complete a loan application. Answer questions about your personal details, income and existing debt.
- Sign the papers. If you are approved, you will read the loan documents and sign on the dotted line.
- Start making payments on your new loan. Once the documents are signed, the lender will disburse the funds. Continue to make payments on your existing loans until you get written confirmation that they have been repaid. Then you will start making payments on your new loan.
Requirements to Refinance Veterinary School Loans
Private Student Loan Companies set their own refinancing requirements, so these may differ from lender to lender. But in general, lenders will look at the following:
- Sufficient work history — Your lender will review your employment history to ensure that you are able to repay your loan.
- Good credit score — Lenders consider your credit score as an indicator of the likelihood that you will repay the loan. If your credit needs work, apply with a co-signer who has good credit to increase your chances of being approved and getting a better rate.
- Decent debt ratio — Lenders also review your debt to income ratio, which is a measure of your income relative to your existing debts, before you are approved for a loan. This helps them determine if you have enough income to handle an additional debt payment.
You can easily compare prequalified rates from several lenders using Credible.
What to consider when refinancing a veterinary school
Like any other financial decision, refinancing your veterinary school loans has both advantages and disadvantages.
Benefits of refinancing
- You could save money. Depending on current interest rates and the new term of your loan, there is a good chance that refinancing will reduce your monthly payment.
- You will only have one payment. If you find it difficult to juggle multiple payments, refinancing can help you streamline them into one payment.
Disadvantages 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 adjournmentforbearance and student loan forgiveness programs.
- You may have to meet high financial requirements. Generally, refinancing with a private lender means having to meet strict financial requirements with your credit score and debt to income ratio. But you can always apply with a co-signer to boost your financial profile.
Best Lenders to Refinance Veterinary School Loans
Although there are not many lenders that specialize in refinancing veterinary school loans, most lenders that refinance student loans will accept loans for veterinary programs. 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.
- term of the loan — It is important to consider the length of your repayment period, so that you can plan how long you will repay your loan. Consider the different repayment options available to you.
- Maximum loan balance — Find out whether or not you can borrow enough to cover your existing debt.
- Costs — Make sure you are aware of the fees the lender will charge for refinancing your student loan.
- Discounts — If the lender offers discounts, see which ones you will be entitled to. For example, many lenders offer a rate reduction if you set up automatic payments.
- Co-signers — If you think you need a co-signercheck if the lender offers the possibility of releasing your co-signer after you have made a certain number of payments.
Alternatives to refinancing
If you think refinancing your veterinary school loans isn’t 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 might make your monthly payments more manageable.
- Income Oriented Repayment Plans — Federal student loan borrowers have the option of choosing an income-based repayment plan, which limits your monthly payment to a percentage of your current taxable income and household size.
- Withholding — Forbearance temporarily suspends your student loan payments, but interest continues to accrue on your loans and will be added to your principal balance at the end of the forbearance period.
- Adjournment — Loan deferral also temporarily halts your payments, although usually for a longer period than forbearance. You may need to have a qualifying life event to qualify for a deferral. For federal loans, the federal government will suspend interest accrual while you are on borrowed time.
To start refinancing your student loans, visit Credible and compare prequalified rates from several lenders.