How To Pay Off Medical Student Loans Faster
The struggle is real. Trying to pay off medical student loans has practically become an epidemic. It is costing more than ever to become a doctor and salaries are going down.
The other challenge is that the general public sometimes feel ‘doctors have it easy’ after they start working. The stereotype of a medical doctor has them living the high life, with a substantial income and a great family and kids. It doesn’t take into account the years of study that went before, the long hours medical professionals work and the challenges of being stretched to the limits in terms of human resources.
Perhaps that stereotype can now be challenged with the recent publicity about outrageous medical student loans.
Suggestions to Pay Off Medical Student Loans Faster
Live below your means for a while
A boring suggestion, but one that can help, especially in the early years of your career. Your family and friends might expect you to buy that expensive house and car to celebrate becoming a doctor, but try to resist.
There is enough stress in being a new doctor. Try to lead a simple life and enjoy simple pleasures during the early years of your career. Treat yourself from time to time, you definitely deserve that. However, don’t treat yourself to a big ticket item with more loan payments (house, car, extravagant holiday).
Refinance loans when possible
Know which loans can be refinanced and look for banks that can refinance it for a lower interest rate. Be careful to look at the bigger picture. Ask how much you are paying in interest with the current interest rate and how much interest you will pay at the lower interest rate.
Try not to extend the loan to a longer term because you won’t be saving any money. However, if lowering the payments is your main priority, then do what you need to do to keep yourself in good standing with your credit rating.
Seek advice or hire a financial planner or financial professional
Ask your colleagues that have years of experience behind them about how they managed their medical student loans. Are they doing ok? Would they have changed how they handled their money at your age?
Your speciality is medicine. If you are able to understand finances too, then, well done you! If not, a smart move would be find a financial planner with a solid reputation among other medical professionals. We can offer you financial advice to help you manage your money and pay off your student loan faster.
Look into life insurance if you are married or have kids. If something happens to you, they will be put in an incredibly tough financial situation. If you are married or not, definitely consider disability insurance in case you aren’t able to work.
Two Possible Strategies To Pay Off Medical Student Loans
There are a couple of strategies that can be helpful depending on how you like to think about your debt.
1st Strategy: Pay Off Highest Interest Loans First
If you feel better know that you are paying less money over the course of your loans, this strategy might be for you. When you payoff the loan with the highest interest rate first, then you are paying less interest over time.
2nd Strategy: Pay Off Smallest Loan Amounts First
If you like to see progress quickly when paying your loans, then pay the smallest loan first. You will feel a sense of accomplishment for having to make one less payment. Then pay off the next smallest loan. This strategy is great for increasing your motivation.
Stay Focused to Pay Off Medical Student Loans Faster
Becoming a debt-free doctor as quickly as you can is all about mindset. If you stay focused and make your top priority paying off your medical student loan, then you will become debt-free quicker. When you are debt free you will have more disposable income to do as you like with.