When it comes to paying for tuition and fees, personal loans are not the first option for medical students. However, there may be a few exceptions when a personal loan is worth considering. But first, let’s talk about the elephant in the room.
Cost of Attendance
Medical school is expensive and can cost up to six figures per year, depending on the institution and location. So it is not surprising that scholarships, grants, and federal loans may not be enough to cover your entire cost of attendance, including living expenses.
Financial Aid
Financial aid for medical school can consist of free aid (or gift aid), along with loans. Free aid can include grants, fellowships, work study, and scholarships. And loans will either be government backed (i.e. federal student loans) or issued by a private lender.
Federal Student Aid
Federal student aid includes the following programs and loans:
- Direct Unsubsidized Loans – Intended for all medical disciplines.
- Direct Grad PLUS Loans – Available until July 1, 2026. If you have Direct Loans prior to this date, you may continue to borrow in this program through the 2028-29 academic year.
- Primary Care Loans (PCL) – A program for allopathic or osteopathic disciplines. Talk to your financial aid office to inquire about this program.
- Health Professions Student Loans (HPSL) – HPSL is for podiatry, pharmacy, optometry, dentistry, or veterinary disciplines. Your financial aid office can provide more information.
- Medical Student Education (MSE) Program – The MSE grant program was created to encourage medical students to become physicians in high-need areas. The financial aid office can provide more insights.
Personal Loans
Unlike federal loans, personal loans are not government backed. They also require a credit check and do not offer the same protections as government issued loans. There are two classes of personal loans: private student loans that are specifically designated for education-related expenses and personal loans that could be used for several reasons that are not be limited to education. Here’s a quick side-by-side comparison.
| Personal Loans | Private Student Loans |
|---|---|
| Not limited to educated-related expenses | Used for educated-related expenses including tuition, fees, books, supplies, etc. |
| Based on creditworthiness. Cosigners are strongly encouraged. | Based on creditworthiness. Cosigners are strongly encouraged. |
| Not verified by your school | Must be verified by your school's financial aid office |
Personal Loans for Non-Education Related Expenses
There are limited circumstances where medical students may consider a personal loan. As outlined above, the number of federal aid programs and private student loans are usually enough to cover your cost of attendance. That said, some medical students have sought out personal loans for things such as:
- Credit card payoff; assuming you can get a personal loan with a lower rate.
- Living expenses for summer breaks that your education loans may not address. Tip: teaching or research jobs that pay a stipend are some alternative ways that medical students bridge the gap.
- Relocation costs that would not be covered by federal education loans. Be sure to compare personal loan interest rates and terms to Residency and Relocation Loans.
Private Student Loans
Lenders typically market personal loans for medical students as private student loans. This is because the loan terms are very specific to individuals who are still in school and may be unable to begin repayment right away. Unlike traditional personal loans which can be used for things like home improvement projects and unexpected medical costs, private student loans offer postponement of repayment while you are enrolled at least half time at an eligible medical school. They also offer a grace period which you are unlikely to find in a traditional personal loan.
Medical Student Loan
The phrase ‘medical student loan’ simply refers to a loan that can help pay for medical school. And specifically, medical student loans offer higher annual and aggregate loan limits given the costs of medical school and training. This is true for federal and private student loans.
Loan Amounts
The loan amounts you may qualify for will vary based on loan type and the overall costs of your program. Loans may be approved for up to the full cost of attendance. Private student loans and personal loans may have minimum amounts starting around $1,000.
Annual Percentage Rate
The annual percentage rate (APR) for medical student loans will either be a fixed or variable rate.
| Federal Student Loans (Disbursed from July 1, 2025 to June 30, 2026) | Private Student Loans |
|---|---|
| 7.94% Fixed - Direct Unsubsidized Loans | Range 3%-17% |
| 8.94% Fixed - Direct Grad PLUS Loan | Varies based on creditworthiness and choice of fixed or variable rate |
Origination Fee
Personal loans often charge an origination fee. For some lenders, this may be around $100, but it could also be higher. You’ll also want to confirm whether you are required to have a checking account or banking relationship with the lender to qualify for a loan. Private student loans, on the other hand, typically do not have an origination fee. And federal loans charge a 1.057% origination fee.
Subject to Credit Approval
Personal loans and private student loans are subject to credit approval. Unless you’re sure you have a strong credit score and debt-to-income ratio, with proof of income, you should apply with a creditworthy cosigner. For private student loans, most lenders will require a minimum FICO® Score in the high 600s. Personal loans may require an even higher score. Before you apply for a loan, you may want to get a copy of your credit report to ensure everything is accurate. You can download a free copy at AnnualCreditReport.com.
Full Time
To qualify for student loans, you do not necessarily have to attend medical school full time. If you are enrolled at least half time, you can be eligible.
Loan Application
When you apply for personal or private student loans, the loan application process can be started online. Be prepared to provide basic information about yourself plus proof of identification, proof of income, etc.
Loan Term
Private student loan terms can differ by lender, but they include some similar terms:
- Choice of fixed or variable rate loan
- Deferred payments while in school
- A grace period of up to 9 months
- Repayment period of up to 20 years
Interest Only Payments
For any of your unsubsidized loans or private student loans, you can choose to make interest only payments while you are in school. If you can swing the payments, it will help you save money in the long run by preventing several years of unpaid interest from being added on top of your principal balance.
Interest Rate Discount
Student loan lenders offer competitive benefits such as interest rate discounts. The most common is a 0.25% rate reduction for automatic payments although some lenders offer a 0.50% discount. (Note: loan servicers in the federal program also offer rate reductions for automatic payments.) Other discounts you can ask your lender about include the following:
- Loyalty discounts – Some lenders provide discounted rates to repeat customers or existing bank customers. The exact discount may vary but could be anywhere from 0.125% to 0.25%.
- Good grades – Some lenders offer rebates for good grades. Often, these are cash rebates or a fixed dollar amount that gets applied to your outstanding loan balance.
Loan Forgiveness Program
Personal and private student loans do not offer loan forgiveness. Loan forgiveness is a unique benefit within the federal student loan program.
Public Service Loan Forgiveness (PSLF)
The Public Service Loan Forgiveness (PSLF) program cancels the balance of your Federal Direct Loans after you make 120 qualifying payments in an eligible repayment plan.
Loan Payments
Your loan payment amount depends on your loan balance, interest rate, and the number of years in your repayment schedule. Since medical student loan debt can be sizeable, you may want to consider refinancing your loans.
Student Loan Refinance
When you refinance your student loans, your new lender will pay off your existing loans and provide a new loan with new terms. Student loan refinance is subject to credit approval. And you do have the option to combine all your federal loans and private student loans together. But you should strongly consider whether this makes sense based on the benefits you may have for your federal loans, such as a Repayment Assistance Plan (RAP).
