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Medical school is really expensive. That’s why so many students opt to get student loans. Before you start applying though, let’s go over some things you need to know about medical school loans.
With medical school loans, you can take out a lot more than you’re probably used to.
Federal Direct Unsubsidized loans, for example, can lend up to $20,500 per year. Overall, the total amount you can borrow is $138,500.
Federal Grad PLUS Loans can lend you the cost of attendance minus other aid you’ve received.
Private student loan amounts will differ. It’ll all depend on the lender as well as your finances.
You can use all this money to pay for tuition, books, room and board, application or test fees, and other similar costs.
Now let’s go into what you should look at when figuring out which loans are best for you.
A cosigner is someone who takes on the legal and financial responsibility of the loan along with you. If you fail to make a payment, then it’s up to them to do so. A creditworthy cosigner can help bring down your interest rate and get you better terms.
Federal student loans don’t usually need a cosigner. The only instance where you may need one is if you fail the adverse credit history check for Grad PLUS loans. Otherwise, you’re good. But, you may need a cosigner to qualify for private student loans. There are non-cosigned private student loan options, but they tend to have higher interest rates than cosigned private loans.
So, before borrowing loans, look for a qualified cosigner and check the cosigner policies.
Federal student loans have fixed interest rates that don’t change. They usually range anywhere from 3% to 5% depending on the type of loan you are getting. Private loan interest rates vary more. They can go between less than 1% all the way up to 13%+.
There are some things you can do that can maximize your chances of getting a lower rate. Having good credit, having a cosigner, and opting for an autopay discount are some.
Compare interest rates on different loans carefully before accepting any.
You want to take a careful look at the terms to make sure you understand and agree with them. For example, most medical school loans will offer grace periods. Federal student loans have a grace period of six months after you graduate, but with private loans, it can vary. You’ll also want to look at the deferment period, which depends on the lender. Some may even offer residency deferment options. Finally, look at the repayment plans. Federal student loans offer income-driven repayment plans while private lenders may offer hardship plans.
Again, be sure to read the repayment options and make sure that they are in line with what you need or want for repayment.
Federal student loans come from the government. But private lenders can range. These are our best picks for private medical school loans.
Arkansas Student Loan Authority
The Arkansas Student Loan Authority (ASLA) is an Arkansas state entity that provides educational funding for all Arkansas students who wish to attend higher education institutions. ASLA is a great option for Arkansas students.
Ascent – Cosigned Loans & Non-Cosigned Loans
Ascent is an online lender that offers educational funding for students. They offer three types of student loans: a traditional cosigned loan, a non-cosigned credit-based loan, and a non-cosigned outcomes-based loan. Ascent is a great option for those who do not have a cosigner available, are international or DACA students, or have lower credit scores.
College Ave’s student loan offers educational funding for undergraduates, graduate students, professional school students, career school students, and parents of students. It’s a great option for students seeking a more flexible repayment term that allows them to find a loan that matches their budget.
Earnest’s student loans provide funding that’s available to undergraduate, graduate, and professional students. They’re a great option if you are seeking competitive interest rates, unique borrower perks, and flexible repayment options that allow you to find a loan that matches your budget.
LendKey is an institution that offers educational funding to undergraduate and graduate students. By connecting borrowers with a network of 100+ lesser-known credit unions and community banks, LendKey allows you to work with smaller lenders with low rates and good customer service, rather than traditional lending institutions. It’s best for students with strong credit and who want generous cosigner release and forbearance policies.
MPOWER is an online lender that offers educational funding to international, domestic, and DACA students. They offer non-cosigned undergraduate and graduate student loans. It is best for international students and DACA students who don’t have a credit history and can’t access a qualified cosigner.
Prodigy Finance is an online lender that provides funding to international students. They offer non-cosigned graduate student loans. They’re a great option for international students who don’t have a credit history and can’t access a qualified cosigner.
Sallie Mae is an online lender that provides educational funding to students. They offer cosigned and non-cosigned undergraduate, graduate, and career training student loans. They’re a good option for students seeking competitive interest rates with a creditworthy cosigner.
SoFi offers educational funding to undergraduates, graduates, law and MBA students, and parents of students. With competitive interest rates, a diverse set of repayment options, and exclusive member benefits, SoFi is a good fit for borrowers with a strong credit score or a creditworthy cosigner.
To apply for a federal student loan, fill out the FAFSA as soon as it comes out in October for every year you’ll be in school.
To apply for a private student loan:
As you start your medical career, we want to make sure that you have everything you need to succeed. That includes being well informed on loans. To make the student loan search process easier, start with Sparrow.
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