What You Should to Know about Medical School Private Loans
- Private medical school loans are generally are credit-based, where as federal loans are not.
- Private medical school loans offer higher loan caps than federal medical school loans.
- There is a grace period of 6 months to a year, depending on the lending institution's policies, with private medical school loans.
- Interest rates vary on private medical school loans, and are usually based on the Prime Rate or LIBOR index.
- Private medical school loans are not need based. This means that if you have too much money to qualify for federal financial aid, but not enough to pay for school, you can still receive a private medical school loan.
- The money paid towards interest on a private medical school loan is tax deductible.
- Origination Fees - a one-time charge that is based on the size of the loan and maybe be dependent upon your credit rating
- APR (Annual Percentage Rate), or the Variable Interest Rate - is based upon the credit score of the applicant; the rate tied to the Wall Street Journal, Prime Rate and other financial services; and an overhead charge that varies by lending institution
- Monthly Payment - the amount of your loan that you pay off monthly. This could include origination fees and interest
The money from private medical school loans is typically dispersed to the borrower in two ways. First, it could be sent directly to the school where it is distributed out to pay for varying parts of the student's education. A benefit in using this option is that the school will certify the borrowing amount. However, the money will generally take longer to get to the school. With the second option, the money is sent directly to the borrower. Typically, this option allows the borrower gets the money faster - usually within a few days. However, this option also carries the risk of over-borrowing and misuse of the funds, but many times the quick accessibility of the money is worth the risks.
Again, weigh your options to ensure that you receive the private medical school loan that best suites your needs.
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The Healthcare Career Resources column is presented by HealthcareCrossing, America's leading job search site dedicated to getting jobs for healthcare professionals.
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Even as a young child practicing medicine on your stuffed animals, you knew that you were destined to become a physician. But the road to obtaining your medical degree takes more than just the ability to mend the imaginary wounds of a teddy bear.
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