Graduation is incredibly exciting. You’ve learned valuable skills, built connections, and have prepared to establish yourself. Unfortunately, you also may feel frustrated at the process of getting loans. It may seem every choice is complicated and doesn’t quite fit your situation.
That’s because most lenders treat you like everyone else. Most lenders don’t understand the journey of a doctor or dentist, so they might stick you with higher payments and interest rates than the national average. This unfortunately happens because they base their decision on factors that are irrelevant to you.
So, if you’re searching for flexible loans that fit your life and not someone else’s, we’ve compiled a list of two crucial points to consider when browsing lenders.
Look for a Lender that Specializes in Lending to Doctors and Dentists
Choose a lender that specializes in helping doctors and dentists. This lender understands the reality of your financial trajectory and your long-term earnings. They make decisions based on the reality of your career trajectory over the term of the loan, not on a snapshot of your earnings today.
This is especially important because, on average, a resident or first-year doctor will only make around $60,000 per year. Doctors and dentists take time to increase their income, and their lender needs to work with them to help them get there.
For example, let’s say that your first-year projected income is $60,000, but your third year is projected at $150,000. Most lenders don’t consider that trajectory—they only see your income today and will bill you appropriately. This is why consulting a lender that understands this is crucial to building your wealth and establishing your career. Without this, debt will quickly feel like a burden.
In fact, certain lenders can create customized programs that allow you to get the money you need today without crippling your cash flow. Above all, you need a lender who wants to work with you, not for their own profit. Once you find a lender who respects this, you’ll discover how powerful a loan with the right terms can be.
Look for a Lender With Hybrid Loan Repayment Terms
Although low interest rates are desirable, they’re only part of the puzzle. You’re looking for more than just a low rate to secure your financial future. You want hybrid and flexible repayment terms that fit the reality of your earnings. That way, you know the lender also cares about your financial security, not just draining your wallet.
With the standard loan, a borrower pays a fixed payment for the life of their loan that covers both interest and principal. Even if the interest rate is low, it doesn’t account for the fact that most doctors and dentists make their money later, penalizing you for taking too long to earn more. However, a Hybrid loan incorporates your trajectory and can offer flexibility in your payment structure.
This is noteworthy for in-training doctors, which is why we created a Hybrid Loan Program in addition to our standard loan. Our Hybrid Loan allows borrowers to make interest-only payments for the first half of the loan term, and both principal and interest for the second half. This allows them to backload the principal repayment until they are making more money and can more easily fit both principal and interest in their monthly budgets.
If you’re interested in learning more about our services, or how we can help you with your finances as a new or training medical professional, contact us here.
Sources Cited
- https://www.experian.com/blogs/ask-experian/whats-a-good-interest-rate-for-a-personal-loan/
- https://www.ama-assn.org/residents-students/specialty-profiles/6-things-medical-students-should-know-about-physician
- https://anderson-review.ucla.edu/wp-content/uploads/2021/03/Greenberg-Mogilner_Student_Debt_and_Life_Satisfaction_2019.pdf
