Editor’s Note: The following is a guest post by James Fisher, who is a freelance writer with interests in finance. He is looking to become a CPA in the future. James is a sponsored writer, and may have links to services that he may have relationships with.
An astounding seven out of ten college graduates leave school saddled with student loan debt. For medical students, that number is even higher, and so is their debt load. The average debt load of a medical student entering their residency typically exceeds $100,000. For student loan balances that high, having the best interest rate available is not just a good idea for down the road, it is something graduates need to pay attention to right away. Student loan refinance rates can vary wildly from less than 2.25% to more than 25%, and it can be confusing to go to individual lenders in an attempt to compare their rates and other terms. Luckily, there are several startup companies that are focusing on helping student loan borrowers compare and contrast loan refinancing options, particularly those with high debt loads such as medical professionals.
One of the best-known of the refinancing comparison websites is Credible. After filling out a Credible application, borrowers get to compare personalized loan offers, although as with other comparison sites no offer is definite until the borrower has applied with that specific lender and received a final approval offer. Credible doesn’t charge for its service (but neither do the other companies on this list) and doesn’t ding your credit score for checking offers. Credible has been featured on MarketWatch, VentureBeat, and USA Today. Borrowers who want to find a lower interest rate but don’t have great credit, or haven’t yet established sufficient credit history, can apply with Credible along with a cosigner to increase their chances of getting competitive offers from lender partners. For those borrowers utilizing a cosigner, they should check with the individual lender partners to find out how many payments are necessary before a cosigner can be released.
LendEDU is another loan comparison company that works with various lender partners to find borrowers a rate that saves them money. It has been described as a LendingTree.com for student loan borrowers. Even though the company was only brought off the ground in 2014, it receives significant media attention. The company has been discussed on CNBC and written about in numerous publications, including Forbes and The Huffington Post. LendEDU works with a network of “Student Loan Refinancing Partners” to help borrowers compare interest rates and essential terms from many lenders. It starts with a short and free application which is filled out online, after which the borrower receives up to a dozen different student loan and refinancing offers. Since LendEDU doesn’t need a hard hit to the borrower’s credit report, there’s no damage to credit scores, and applicants can compare rates from SoFi, College Ave, Citizens Bank, Sallie Mae, and many other lenders – all at once, and all from their computer screen. Borrowers will be pleased to know that with a short application and a soft inquiry to their credit report, lenders’ offers can be customized to the applicant. Nonetheless, no offer is set in stone until the borrower applies individually.
SimpleTuition is a student loan comparison site by LendingTree, the website well-known for comparing mortgage rates. And while LendingTree offers loan comparisons for just about any type of loan except student loans, that’s where its progeny, SimpleTuition, picks up the slack. College graduates with either federal loans, private loans, or a mixture of both, can use the well-designed website to learn about multiple student loan refinancing lenders. While this company doesn’t provide the same vetting process for the borrower as the previous two (their application is more of a quick questionnaire) this site is a good place to get a very general idea of what private lenders are out there. The downside to this approach is that by not performing a soft pull on the borrower’s credit report, SimpleTuition is unable to personalize the lenders they promote or give potential applicants much of an idea of what rates and terms they will qualify for. However, SimpleTuition is a good website to go to in order to get helpful information on different kinds of loans and even repayment methods. For borrowers looking for more personalized offers without having to apply with individual lenders, check out LendEDU and Credible.
Post mortem by SMMD: I agree with the author that these aforementioned services are worthwhile for the graduating doctor to be aware of, but we should focus on a fundamental debt repayment strategy. Many of my colleagues use SoFi for their refinancing to rid of high interest governmental loans. The rest can be (YMMV) as simple as not upgrading your home/car/other-expensive-item when you start making real money.