Should I Refinance My Vet School Loans?
BIG Ideas:
- The average student debt for the graduating veterinary class of 2022 with debt was $179.5k.
- Before you refinance vet school debt, consider your financial situation credit score, federal benefits you may want to take advantage of, and the interest rate environment.
- Make sure you understand the details of your current vet school loans before you take any action, including any fees or penalties for early repayment.
You made it happen! You turned your passion for animals into a rewarding and lucrative profession as a vet. Fulfilling that dream must feel incredible. What may not feel as good, though, is dealing with those vet school loans that are entering repayment.
If you’re feeling overwhelmed, you are 100% not alone. According to the American Veterinary Medical Association (AMVA), the average student debt for the entire graduating veterinary class was $147,258 and $179.5k for vet grads with debt.
Whatever your debt figure, it’s important to know that you have some options for paying it. One option is to refinance vet school loans. But before you sign anything or take any other action, there are some pretty important things to know.
What is refinancing?
You’ve probably heard the refinancing term, but you may not fully understand what it means and involves. In short, when you refinance, you pay off your existing federal student loans with a new loan from a private lender.
Why do you want to refinance?
If you’re considering refinancing your vet school loans, make sure you understand why.
Of course, everyone wants to save money, but there are other good reasons to refinance, including:
- Shortening the length of your loans so you pay less in interest over the life of your loan (even if it means paying more money each month).
- Lengthening the term of your loan to get lower loan monthly payments that free up room in your budget (even if that means paying more in interest in the long run).
- Replacing a variable rate with a fixed rate loan to get the predictability of fixed monthly payments.
- Removing a co-signer on your existing loans would remove them from financial obligations.
What should you think about before refinancing?
Financial stability. Before you even consider refinancing your vet school loans, make sure you have a stable income and do not have any financial hardships that would make it difficult for you to qualify or afford your monthly payments.
Look at your federal loans first. Can you make the payments? Do you have the opportunity or need to take advantage of federal benefits, like income-based federal loan repayment or even loan forgiveness.
Interest rates. It’s always best to refinance vet school loans when interest rates are low. Know what the rates are on your current student loans. What is the blended average rate for all your loans? It is possible that you can still benefit from refinancing.
It’s always good to know your rate and check what your refinanced rates would be. Use our loan refinance calculator to compare your payments and total interest over the life of your loan and see if refinancing makes sense for you.
Credit score. Did you know that your credit score can significantly affect the interest rate you pay on your loans? Have you recently taken action to build or improve your credit score?
If so, you might qualify for a better rate when you refinance your loans. Need some time to improve your credit score or not sure how to go about doing so? Here’s a guide to help you.
Loan type. Does your refinanced loan offer a fixed or variable rate? It makes a big difference since fixed rates mean your payments won’t change for the life of your loan. A variable rate loan is subject to change, which means your payments could go up and your budget could be squeezed.
Loan terms. The amount of time you have to pay back your student loans for vet school will greatly impact your monthly payment and the interest you’ll pay over the life of your loan. If you choose a longer term, your monthly payments will be lower, but you will end up paying more interest. Conversely, a shorter term will result in higher monthly payments but less interest overall.
Federal loan benefits including forgiveness. Federal student loans offer unique benefits, including loan forgiveness or repayment assistance programs. Be aware that refinancing your federal vet school loans with a private loan could make you ineligible for these programs.
Loan fees. Some loans have fees and penalties for early repayment. This is not an issue with most federal and private student loans, but always be in the know.
Since refinancing will result in paying off your existing loans, you’ll want to make sure you don’t get hit with fees if you do decide to move forward.
Lender options. Not all lenders are the same; each one may offer different rates, terms, and benefits. So be sure to take the time to compare all your options, including loans with non-profit private lenders like Brazos that offer lower rates that can save you money.
Ready to refinance your vet school loans? Brazos has your back
For more than 40 years, Brazos Higher Education has been helping make education more affordable for students and parents in Texas. As a non-profit, we can offer you low rates and personal service to help you take control of that vet debt. Contact us today!
