4 Money Tricks Doctors Can Use to Pay Down Student Loans Faster


It’s no secret that the average doctor is saddled with tons of student loan debt when starting practice. In fact, according to the Association of American Medical Colleges, the average doctor graduates medical school with $190,000 in student loans—6x the national average.

Having a strategy to quickly and efficiently pay down your student loans is critical to long-term financial success, so we’ve put together a few personal finance tips and tricks for doctors to help them pay down student loans faster in 2017. These tips are relevant to all doctors, regardless of specialty or income.

1. Put less than 20% down when purchasing a house

Between undergrad, med school, and residency*, most doctors have spent a significant amount of time paying rent, and are itching to build up equity in a house. You may think you need to put the traditional 20% down on a home to avoid paying mortgage insurance, but many lenders offer mortgages with more flexible down payment requirements and no borrower-paid mortgage insurance.

These niche mortgage products, often called doctor loans, are available to physicians, dentists and other healthcare professionals that may not qualify for a conventional mortgage due to a high amount of student loan debt.

It may sound counter-productive to have a smaller down payment, but think about it—if you had the option to allocate money to paying down student loans or putting money down for a house, the financially-savvy thing to do is to pay down the higher interest rate student loans.

If you forgo a higher down payment, you get the benefit of eliminating higher interest rate debt as well as the potential tax benefits from the mortgage interest you pay on your home. Not having to purchase mortgage insurance is a major added bonus.

2. Refinance your student loan debt for a lower rate

No matter how long you’ve been out of school, you can still try refinancing your student loan debt for a lower rate, which could lead to paying your debt off much faster.

Doctors especially benefit from this move, as it can save them a good amount of money in the end. In fact, when doctors refinance with SoFi, they have an average lifetime savings of $44,2821.

3. Take advantage of disability insurance discounts while training  

Many insurance companies offer discounts, including “Multi-Life” and “Association” discounts, which are locked for the life of the policy. Finding an insurance agent that can provide these discounts can help you save a significant amount on the cost of your insurance policy.

By purchasing disability insurance before you start practice, you can use the extra cash flow from savings to apply to your student loan payments.

4. Maintain your training lifestyle when you start practice

One of the hardest things for doctors is to exercise financial restraint when they start practicing. Typically, your income is increasing five-fold, and after living on scraps for several years, the desire to upgrade your standard of living is enormous.

Maintaining a frugal lifestyle in your early years of practice will significantly change the trajectory of your finances in the future. Let’s look at the impact if your monthly expenses during training looked something like this.

Monthly rent and utilities: $1,500
Car payment: $200
Groceries: $300
Misc: $750
Total Expenses: $2,750

If you can maintain this relative level of spending, you will have some serious savings left over at the end of each month when you start practice. If you have an after-tax income of $11,500 each month, you’ll be able to put your student loan repayment plan on steroids if you continue to live your training lifestyle.

ACOG has partnered with SoFi to offer our members and their families a 0.125% rate discount2 upon refinancing their student or Parent PLUS loans through SoFi.com/ACOG. You must apply through that link to be eligible for the rate discount.

*SoFi has a Medical Resident and Fellow Refinancing Program. If you have less than four years left of your resident or fellowship program, you can apply to refinance and pay a minimum of $100/month3. Accrued interest does not compound while paying $100/month3. This means that you don’t accrue interest while in your fellowship program. Fellows who refinance through SoFi.com/ACOG also receive the 0.125% rate discount2.

Terms and conditions apply. SoFi reserves the right to modify or discontinue products and benefits at any time without notice. SoFi loans are private loans and SoFi does not offer the same flexible repayment terms that are features of federal student loans. Eligible borrowers must be U.S. citizens or permanent residents and meet SoFi's underwriting requirements. SoFi loans not offered to residents of Nevada. Other state restrictions may apply. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636.

1Medical M.D. Lifetime Savings – Lifetime savings calculation of $44,282 is based on all SoFi members with a medical school degree (M.D.) who refinanced their student loans between 6/14/2013 and 6/30/2016. The savings calculation is derived by taking the estimated lifetime cost of existing student loans minus the lifetime cost of SoFi loans upon refinancing for SoFi medical school degree (M.D.) members who refinanced their student loans. SoFi’s lifetime savings methodology for student loan refinancing assumes 1) members’ interest rates do not change over time 2) members make all payments on time 3) members make monthly payments for the full duration of their loan 4) members take advantage of AutoPay, which enables them to lower the APR of their loan by 0.25%. SoFi’s average savings methodology for student loan refinancing excludes refinancings in which 1) members elect SoFi loans with longer maturity than their existing student loans 2) the term length of the member’s original student loan(s) is greater is than 30 years 3) the member did not provide correct or complete information regarding his or her outstanding balance, loan type, APR, or current monthly payment. SoFi excludes the above refinancings in an effort to maximize transparency on how we calculate our average lifetime savings amount and to minimize the risk of member data error skewing the average lifetime savings amount.

2If you apply and are approved, the interest rate shown in your loan documents will include an additional rate discount because of your organization’s SoFi partnership at the time of loan origination. Offer good for new student loan refinancing customers only.

3Though interest does not compound during residency, interest still accrues. Additionally, the minimum monthly payment of $100 while in residency may not pay all the interest due each month, which will likely result in a negative amortization.


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