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Getting a graduate degree can help you move up the company ladder, boost your salary, or switch to a different career. But going back to school can be costly. On average, students rack up $78,118 in student debt to pay for graduate school, according to the Education Data Initiative. That average reflects debt for all advanced degrees beyond the bachelor’s level, including master’s and doctoral degrees.

Many students who borrow money to pay for grad school already have debt from undergraduate studies. Including the average undergraduate student loan debt balance ($37,337), raises total average student debt for graduate students to $115.455.

Fortunately, there are ways to get a graduate degree without taking on a large amount of student loan debt. There are also a variety of payment plans that can make repaying grad school debt easier on your budget after you graduate. Here’s what you need to know about student loan debt for graduate school.

What Is the Average Graduate Student Loan Debt?

If you’re thinking about applying to graduate school, you may be wondering how much you’ll need to borrow to cover your costs and whether or not it will be worth it.

On average, students leave graduate school with a student loan debt balance of $78,118 (from grad school alone). How much debt students rack up going to grad school, however, can vary significantly depending on the type of degree they pursue and the kind of school they attend. A doctoral degree generally costs more than a masters, for example, while attending a public, non-profit university is typically cheaper than going to a private, for-profit college.

Here’s a closer look at the average graduate school debt balance for different degrees obtained at different types of institutions.

•   Master’s degrees: The average total student loan debt balance is $83,651 ($64,950 is just from graduate school).

•   Master’s degrees from public schools: The average total student loan debt balance is $69,057 ($54,699 is just from graduate school).

•   Masters degrees from private schools: The average total student loan debt balance is $91,168 ($72,776 is just from graduate school).

•   PhDs: The average total student debt balance is $134,797 ($127,521 is just from graduate school).

•   PhDs from public schools: The average total student loan debt balance is $115,759 ($106,297 is just from graduate school).

•   PhDs from private schools: The average total student loan debt balance is $199,175 ($183,508 is just from graduate school).

💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

Exploring Options to Finance Graduate School

Grad students can finance their education with federal student loans, private loans, or a mix of both. Here’s a closer look at the different types of loans available for graduate school.

Federal Loans

Graduate students can take out two different types of federal loans.

Direct Unsubsidized Loans

You can borrow up to $20,500 each year in Direct Unsubsidized Loans for graduate school, and eligibility is not based on financial need. The interest rate for Direct Unsubsidized Loans for graduate students for 2023-24 is 7.05%, plus an origination fee of 1.057%.

If you borrowed federal funds for your bachelor’s degree, you may be subject to a total federal funding limit of $138,000 in Direct Loans, including the amount of your undergraduate degree. Graduate PLUS (and Parent PLUS loans) are separate from this amount.

Direct PLUS Loans

If Direct Unsubsidized Loans aren’t enough to cover your attendance costs, you can next turn to Direct PLUS Loans, which have a higher interest rate. You can borrow up to the full cost of attendance for each year, which is set by your university and includes expected living costs for the town or city you’ll be studying in.

Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify. The interest rate for 2023-24 is 8.05%, plus a 4.228% origination fee.

Private Loans

Students can also take out private student loans for graduate school. Indeed, if you’re applying for grad school when you already have a well-established credit history, you may be able to get a lower interest rate from private lenders than from the federal government. This could save you a significant amount of money over time, and also help you get out of debt faster.

You’ll want to keep in mind, however, that the government offers significant protections that can make federal student loan debt easier to manage, such as income-driven repayment plans and student loan forgiveness.

How to Minimize Graduate School Debt

If you are interested in attending graduate school but worried about being saddled with high debt payments after you graduate, here are some ways to make your advanced degree more affordable.

Tap Free Funding Options

Scholarships, fellowships, and grants are some of the best ways to pay for graduate school. You can ask your school about institutional awards and also search for professional organizations focused on the field you’re interested in to see if they offer graduate scholarships. In addition, some schools also offer tuition waivers or some monetary awards for students who serve as teaching assistants.

Ask Your Employer About Tuition Assistance

If you plan to continue working while attending graduate school part-time, it’s worth finding out if your employer offers a tuition assistance program. Some companies will cover all or a portion of their employees’ higher education expenses. There may, however, be some strings attached, such as staying in the company for a specific amount of time. Reach out to your HR department to find out whether your employer offers this benefit and, if so, what the requirements are.

Borrow Only What You Need

There are no subsidized loans for graduate school, which means you’ll need to pay for all the interest that accrues on your loans. With Graduate PLUS loans, you are able to borrow up to your school’s cost of attendance, which can include expenses like transportation and child care. However, that doesn’t mean you should access the maximum amount. It’s a good idea to tap savings and income before turning to loans to cover all of your costs. This can help minimize how much debt you have to repay after you get your degree.

Look Into Online or Accelerated Programs

Some schools charge the same tuition for online and on-campus programs, but others charge substantially less for online classes. Also, the faster you can get a degree, generally the less you will have to borrow to pay for it. A one-year MBA, for example, will typically cost significantly less than a two-year program.

Explore Your Repayment Options

Federal loans offer income-driven plans that can keep graduate loan payments manageable after you graduate if your income is low. If you pursue a career in public service or nonprofit, you may also qualify for Public Service Loan Forgiveness.

If you’re getting an advanced degree that will boost your earning power, keep in mind that you may be able to refinance your federal and private graduate school loans after you graduate at a lower rate. This could potentially translate to hundreds or thousands of dollars saved over the life of your loan. Refinancing can also allow you to remove a cosigner off of your student loans.

You can refinance both federal and private student loans, but keep in mind that refinancing federal loans with a private lender means giving up federal student loan protections such as income-driven repayment plans and PSLF.


💡 Quick Tip: When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.

The Takeaway

Most graduate students in the U.S. leave school with upwards of $78,000 in graduate school debt. Depending on what type of degree you pursue and where you study, you could end up with less — or more — than the average amount of graduate student loan debt.

If you’re interested in grad school but concerned about debt, keep in mind that you may be able to lower the cost of your degree by getting fellowships and grants, becoming a teaching assistant, tapping your employer’s tuition assistance, and considering an online or accelerated program. You may also be able to refinance your grad school loans at a lower rate after you graduate, making them easier to manage.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

You may feel proud of yourself for paying off a debt early, but doing so could trigger prepayment fees (ouch). The best way to avoid those charges is to read the fine print before you take out a loan that involves this kind of fee.

If you neglected to do that, however, it doesn’t necessarily mean you’re stuck with a prepayment penalty. Read on to learn ways to avoid paying loan prepayment penalties.

What Is a Prepayment Penalty?

A prepayment penalty is when a lender charges you a fee for paying off your loan before the end of the loan term. It can be frustrating that a lender would charge you for paying off a loan too early. After all, many people may think a lender would appreciate being repaid as quickly as possible.

In theory, a lender would appreciate getting repaid quickly. But in reality, it’s not that simple. Lenders make most of their profit from interest, so if you pay off your loan early, the lender is possibly losing out on the interest payments that they were anticipating. Charging a prepayment penalty is one way a lender may recoup their financial loss if you pay off your loan early.

Lenders might calculate the prepayment fee based on the loan’s principal or how much interest remains when you pay off the loan. The penalty could also be a fixed amount as stated in the loan agreement.


💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.

Can You Pay Off a Loan Early?

Say you took out a $5,000 personal loan three years ago. You’ve been paying it off for three years, and you have two more years before the loan term ends. Recently you received a financial windfall and you want to use that money to pay off your personal loan early.

Can you pay off a personal loan early without paying a prepayment penalty? It depends on your lender. Some lenders offer personal loans without prepayment penalties, but some don’t. A mortgage prepayment penalty is more common than a personal loan prepayment penalty.

Recommended: When to Consider Paying off Your Mortgage Early

Differences in Prepayment Penalties

The best way to figure out how much a prepayment penalty would be is to check a loan’s terms before you accept them. Lenders have to be upfront about how much the prepayment penalty will be, and they’re required by law to disclose that information before you take on the loan.

Personal Loan Prepayment Penalty

If you take out a $6,000 personal loan to turn your guest room into a pet portrait studio and agree to pay your lender back $125 per month for five years, the term of that loan is five years. Although your loan term says it can’t take you more than five years to pay it off, some lenders also require that you don’t pay it off in less than five years.

The lender makes money off the monthly interest you pay on your loan, and if you pay off your loan early, the lender doesn’t make as much money. Loan prepayment penalties allow the lender to recoup the money they lose when you pay your loan off early.

Mortgage Prepayment Penalty

When it comes to mortgages, things get a little trickier. For loans that originated after 2014, there are restrictions on when a lender can impose prepayment penalties. If you took out a mortgage before 2014, however, you may be subject to a mortgage prepayment penalty. If you’re not sure if your mortgage has a prepayment penalty, check your origination paperwork or call your lender.

Checking for a Prepayment Clause

Lenders disclose whether or not they charge a prepayment penalty in the loan documents. It might be in the fine print, but the prepayment clause is there. If you’re considering paying off any type of loan early, check your loan’s terms and conditions to determine whether or not you’ll have to pay a prepayment penalty.

How Are Prepayment Penalties Calculated?

The cost of a prepayment penalty can vary widely depending on the amount of the loan and how your lender calculates the penalty. Lenders have different ways to determine how much of a prepayment penalty to charge.

If your loan has a prepayment penalty, figuring out exactly what the fee will be can help you determine whether paying the penalty will outweigh the benefits of paying your loan off early. Here are three different ways the prepayment penalty fee might be calculated:

1. Interest costs. If your loan charges a prepayment penalty based on interest, the lender is basing the fee on the interest you would have paid over the full term of the loan. Using the previous example, if you have a $6,000 loan with a five-year term and want to pay the remaining balance of the loan after only four years, the lender may charge you 12 months’ worth of interest as a penalty.

2. Percentage of balance. Some lenders use a percentage of the amount left on the loan to determine the penalty fee. This is a common way to calculate a mortgage prepayment penalty fee. For example, if you bought a house for $500,000 and have already paid down half the mortgage, you might want to pay off the remaining balance in a lump sum before the full term of your loan is up. In this case, your lender might require that you pay a percentage of the remaining $250,000 as a penalty.

3. Flat fee. Some lenders simply have a flat fee as a prepayment penalty. This means that no matter how early you pay back your loan, the amount you’ll have to pay will always be the prepayment penalty amount that’s disclosed in the loan agreement.

Recommended: Debt Payoff Guide

Avoiding a Prepayment Penalty

Trying to avoid prepayment penalties can seem like an exercise in futility, but it is possible. The easiest way to avoid them is to take out a loan or mortgage without prepayment penalties. If that’s not possible, you may still have options.

•   If you already have a personal loan that has a prepayment penalty, and you want to pay your loan off early, talk to your lender. You may be offered an opportunity to pay off your loan closer to the final due date and sidestep the penalty. Or you might find that even if you pay off the loan early and incur a penalty, it might be less than the interest you would have paid over the remaining term of the loan.

•   You can also take a look at your loan origination paperwork to see if it allows for a partial payoff without penalty. If it does, you might be able to prepay a portion of your loan each year, which allows you to get out of debt sooner without requiring you to pay a penalty fee.

For example, some mortgages allow payments of up to 25% of the purchase price once a year, without charging a prepayment penalty. This means that while you might not be able to pay off your full mortgage, you could pay up to 25% of the purchase price each year without triggering a penalty.

Some lenders shift their prepayment penalty terms over the life of your loan. This means that as you get closer to the end of your original loan term, you might face lower prepayment penalty fees or no fees at all. If that’s the case, it might make sense to wait a year or two until the prepayment penalties are less or no longer apply.

When it comes to your money, you don’t want to make any assumptions. You still need to do your due diligence by asking potential lenders if they have a prepayment penalty. The Truth in Lending Act (TILA) requires lenders to provide documentation of any loan fees they charge, including a prepayment penalty. Also, under the TILA, consumers have the right to cancel a loan agreement within three days of closing on the loan without the lender taking any adverse action against them.

The Takeaway

A prepayment penalty is one fee that can be avoided by asking questions of the lender and looking at the loan documents with a discerning eye. This may hold true both when you are shopping for a loan and when you are paying your loan off.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Student loan payments are a heavy burden for many people working in public service. The pandemic-related pause on payment and interest accrual on student loans offered many firefighters relief from their student loan payments. But in October 2023, student loan payments resumed. Now, many borrowers, including firefighters, are struggling. About 40% of all federal borrowers missed their first payments.

Don’t let stress make you put off taking action on your debt. There are actually a number of relief programs that can help firefighters lower their monthly payments, even get the balance of their loans forgiven. Here’s a guide to help you navigate your forgiveness and repayment options.

Understanding Student Loan Forgiveness for Firefighters

If you’re hoping to become a firefighter, or already working as one, you’ve made a noble choice. Besides putting out local blazes, firefighters also rescue victims, educate the public on fire prevention, attend to medical emergencies, and respond to disasters.

While working as a first responder can be rewarding, repaying your student loans can be a challenge on a firefighter’s salary. The good news is that firefighters have options for student loan assistance and forgiveness, including Public Service Loan Forgiveness, income-driven repayment plans, consolidation, and refinancing. What follows is an overview of student loan forgiveness and relief programs for firefighters.


💡 Quick Tip: Often, the main goal of refinancing is to lower the interest rate on your student loans — federal and/or private — by taking out one loan with a new rate to replace your existing loans. Refinancing makes sense if you qualify for a lower rate and you don’t plan to use federal repayment programs or protections.

Public Service Loan Forgiveness for Firefighters

The Public Service Loan Forgiveness (PSLF) program cancels qualifying student loans for individuals, including firefighters and emergency medical personnel, who have worked in public service for 10 years and have made 120 payments on their loans. If you’re eligible, this can be one of the best ways to get loan forgiveness as a firefighter.

Qualifying Criteria for Firefighters Under This Program

To qualify for PSLF, you need to be employed full time by a federal, state, local, or tribal government or qualifying not-for-profit organization. You can use the Department of Education’s employer search tool to see if your employer qualifies for PSLF.

In addition, you must:

•   Have federal Direct Loans (or consolidate other federal student loans into a Direct Loan)

•   Repay your loans under an income-driven repayment plan or a 10-year Standard Repayment Plan

•   Make a total of 120 qualifying monthly payments that need not be consecutive

Note that payments that would have been due during the pandemic-related pause count toward PSLF as long as you meet all other qualifications. You will get credit as though you made monthly payments.

If you have Federal Family Education Loans (FFEL), Federal Perkins Loans, or student loans from private lenders, these do not qualify for PSLF. However, you do have other relief and repayment options (more on those below).

Steps to Apply and Track Progress for Loan Forgiveness

To be considered for PSLF, you’ll need to submit a PSLF form. The easiest way to do this is by using the government’s PSLF Help Tool.

You can use this tool to request that your employer’s eligibility be reviewed (if it is not already in the government’s database), prepare and sign your PSLF form, and request certification and signature from your employer.

You can log in to StudentAid.gov any time to track your PSLF progress. Keep in mind that you’ll need to certify your employment every year and any time you change employers.

Income-Driven Repayment Plans and Loan Forgiveness

If you don’t qualify for PSLF, you may find that an income-driven repayment plan helps reduce student loan payments so they fit more easily into your budget.

With an income-driven repayment (IDR) plan, you make regular payments based on your income and family size for 20 or 25 years. Payments could even be $0 if you’re currently unemployed or earn less than 150% or 225% of the poverty threshold, depending on the plan you choose.

Whatever balance is left at the end of the repayment term is forgiven.

Loan Forgiveness Options Available Through Income-Driven Plans

The following income-driven repayment plans may be eligible for forgiveness:

•   Saving on a Valuable Education (SAVE), which replaced the REPAYE plan

•   Income-Based Repayment (IBR)

•   Pay As You Earn (PAYE)

•   Income-Contingent Repayment (ICR)

All income-driven repayment plans share some similarities: Each caps payments to between 10% and 20% of your discretionary income and forgives your remaining loan balance after 20 or 25 years of payments. (With the SAVE Plan, those with undergraduate loans will see payments decreased from 10% of discretionary income to 5% starting July 2024.)

The plans also have some distinct differences, so before enrolling in any income-driven plan, you’ll want to plug your loan information into Federal Student Aid’s Loan Simulator. This will give a good idea of your monthly bills, overall costs, and forgiveness amounts under each plan.

Payments under every IDR plan count toward PSLF. If you’ll qualify for this program, choosing the plan that offers you the smallest payment is likely your best bet.

Steps to Enroll in an Income-Driven Repayment Plan

You can apply for an IDR plan online at the government’s IDR request page. You’ll need:

•   A verified FSA ID

•   Your income information

•   Your personal information (address, email, etc)

•   Your spouse’s information (if applicable)

Once you log in online, you can click “I want to enter an income-driven plan.” The application process is quick and easy and should take about 10 minutes. You can save and continue the application later, so you don’t need to finish it in a single session.

Federal Perkins Loan Cancellation for Firefighters

A Perkins Loan is a type of subsidized federal student loan based on financial need. The Perkins Loan Program ended in 2017. However, people who received a Perkins Loan are still required to pay those loans and are eligible for the benefits of the Perkins Loan Program.

As a firefighter, you may be eligible to have up to 100% of your loan balance canceled in the following increments:

•   15% per year for the first and second years of service

•   20% for the third and fourth years

•   30% for the fifth year

Eligibility Requirements for Firefighters

To be eligible for Perkins Loan cancellation, you need to be:

A firefighter with five years of full-time service employed by a federal, state, or local firefighting agency to extinguish destructive fires or provide firefighting-related services that began on or after Aug. 14, 2008.

Process to Apply for Perkins Loan Cancellation

You can apply for Perkins Loan forgiveness by contacting the school that issued the loan. The financial aid office or billing office should be able to provide the necessary paperwork.

The college will process your completed application. You will need to provide them with proof that you work for a qualifying employer as a full-time firefighter to be eligible for Perkins Loan forgiveness.

If approved, you’ll get your Perkins Loan balance, plus the interest on the loan, forgiven in five stages, provided you remain employed as a full-time firefighter.

While you are enrolled in the Perkins Loan forgiveness program, you don’t have to make monthly loan payments. If you stop working for a qualified employer as a full-time firefighter, however, loan payments will resume right away.

Loan Consolidation for Firefighters

If you have multiple federal student loans and want to simplify repayment, you might consider federal loan consolidation. If you have FFEL, Perkins, or parent PLUS loans, you will need to consolidate to be eligible for income-driven repayment, public service loan forgiveness. or other relief programs.

When you consolidate federal loans, the government pays them off and replaces them with a Direct Consolidation Loan. Your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next one-eighth of 1%. Your new loan term could range from 10 to 30 years, depending on your total student loan balance.

You can access the direct consolidation loan application at StudentAid.gov. You’ll need to finish the application in one session, so you’ll want to gather the documents listed in the “What do I need?” section before you start, and set aside about 30 minutes to fill it out.

During the application process, you’ll get the opportunity to choose a repayment plan. You can either get a repayment timeline based on your loan balance or pick one that ties payments to income. If you pick an IDR plan, you’ll need to next fill out an IDR plan request.

Loan Refinance for Firefighters

If you have higher-interest federal or private student loans, you may be able to refinance your debt with another lender to get a lower interest rate, lower monthly payments, or both. Be cautious about extending your loan term to get lower payments, however. Longer loan terms could mean you’ll pay more interest over time.

Refinancing involves taking out a new loan with a private lender and using it to pay off your existing student loans. While your credit rating doesn’t matter when you take out a federally-backed student loan or consolidate federal student loans, you’ll need a solid credit score and record of stable employment to qualify to refinance a student loan with a new lender. Generally, borrowers with excellent credit get lower interest rates and better loan terms.

You can often shop around and “browse rates” without any impact to your credit scores (prequalifying typically involves a soft credit check). Just keep in mind that refinancing federal loans with a private lender means losing access to government protections like IDR plans and student loan forgiveness programs.


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

The Takeaway

As a full-time or volunteer firefighter, the return to repayment of federal student loans after a nearly three-and-a-half-year pause may be putting a significant strain on your budget. We want to help you figure out your best plan of attack on debt. Some options that may be able to help ease the burden of repayment for firefighters include PSLF, IDR plans, consolidating, and refinancing.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Residency is an exciting opportunity to get in-depth training within your chosen medical specialty. But these years also come with challenges. Residents are typically required to work long hours while earning just a fraction of what licensed physician’s make. At the same time, you likely have living expenses to cover, plus a mountain of education debt to pay back. This leads many residents to consider medical moonlighting as a way to bring in extra income.

Moonlighting simply means working a second job in addition to a primary job. For residents, it can be a chance to not only earn extra money, but also gain experience in new settings and broaden your career horizons. But there are also some significant downsides to consider. Here’s what residents need to know about medical moonlighting.

How Does Medical Moonlighting Work?

Medical moonlighting essentially means working a second job as an independent physician while still being in residency. Residents often take on moonlighting jobs to supplement their salaries, pay down student loan debt, and to get additional experience and practice beyond their responsibilities in their residency program.

Many medical moonlighting jobs fall under the category of what’s called “locum tenens” jobs, where you substitute for other medical professionals that are out on leave or help provide additional coverage at hospitals that are temporarily short-staffed. Often, you are able to pick and choose shifts that work with your schedule.

While moonlighting might seem like the perfect solution to financial stress, the policies and restrictions on resident moonlighting can be tricky to navigate. While residents who are licensed physicians are legally allowed to take on jobs providing medical care, residency programs typically have their own policies on whether residents can take on extra work.

Some programs prohibit moonlighting entirely, while others might limit moonlighting to residents further along in the program. Many programs will require you to get prior permission from a supervisor before you start moonlighting and you may have to formally state your reasons and goals for moonlighting.

Some residency programs allow you to take moonlighting shifts at the hospital facility where you are currently working, but you may be restricted from taking work outside of your hospital network.

Also keep in mind that the Accreditation Council for Graduate Medical Education (ACGME) guidelines state that residents have an 80 hour weekly limit, on average, over each four-week period, with at least 10 hours of rest between duty hours. Plus, one of every seven days must be free of patient care duties and educational obligations.


💡 Quick Tip: Ready to refinance your student loan? With SoFi’s no-fee loans, you could save thousands.

There Are Two Ways to Moonlight

There are two types of medical moonlighting that residents can pursue: internal and external.

Internal moonlighting involves working extra shifts at the hospital where you are primarily employed as a resident. External moonlighting, by contrast, means picking up extra shifts at a clinic, a practice, an urgent care center, or a different hospital than where you’re training.

External positions are usually locum tenens. Both residents and physicians can work locum tenens jobs, and residents often prefer these jobs to taking on an external part-time job with a single employer. For one reason, they provide flexibility and don’t require having an independent medical license (as opposed to a training license), your own malpractice insurance, or having privileges at a specific hospital.

Pros and Cons of Moonlighting in Residency

Medical moonlighting has benefits and drawbacks. Here’s a closer look at reasons for and against moonlighting in residency.

Advantages of Moonlighting During Residency

Earn Extra Income

Taking on a few moonlighting shifts per month can add up to substantial extra income — especially on a resident’s salary. As for how much money you can make moonlighting in residency, the answer will depend on the type of work you end up doing and the area you’re in. The average pay range is $100-$200 per hour, depending on the location and job duties.

Recommended: Guide to Medical Student Loan Refinancing

Gain Valuable Experience

You might be able to get experience that you don’t typically get in your residency program or you may get additional practice with certain skills or procedures. The extra hours in another area of the hospital — or in another hospital nearby — can give you insight into how other units operate.

The more experience you get, the more robust your resume will become. A great resume can lead to more job opportunities in the future.

Test Out Different Practice Settings

There are many types of workplaces physicians can choose to work in. Moonlighting offers the opportunity to test out some different settings, such as group practices, private practices, urgent care centers, and community clinics.

When your residency ends and it’s time to find a full-time job, having experience in more than one healthcare setting may help guide you toward (or away from) certain types of workplaces.

Expand Your Network

Moonlighting can provide the opportunity to work with more professionals in your field. If you choose external moonlighting, you may be able to develop relationships with physicians, residents, administrators, and other healthcare providers who you wouldn’t otherwise meet in your residency program. Expanding your network can expand your future career opportunities.

Disadvantages of Moonlighting During Residency

Less Free Time

As a resident, you’re likely already working long hours on a grueling schedule while also trying to hone your skills in your chosen specialty. On top of your current workload, even an extra shift here and there can mean you lose out on time with friends and family — or precious sleep.

More Stress

Taking on too much work can lead to mistakes and high stress levels. If you’re earning extra cash now but the quality of your work in your residency is compromised, moonlighting might not be worth it for you. As a resident, your first job is to learn, practice your skills, and build a foundation for your career. It can be a bit of a balancing act.

Medical Malpractice Coverage

With an internal moonlighting position, you’ll work under your training license and have liability coverage and protection under your residency program’s malpractice policy. But external moonlighting might require you to purchase a pricey professional liability insurance policy that you may or may not be able to afford.

Some locum tenens staffing agencies provide malpractice insurance but you’ll want to make sure the coverage is sufficient.

Could Raise Your Monthly Loan Payments

If you’re paying back your student loans on an income-driven repayment (IDR) plan, moonlighting can increase your monthly payments. Under an IDR plan, you pay a percentage of your income. The more income you earn, generally the higher your payments will be.


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

How to Start Moonlighting in Residency

So, you’ve weighed the pros and cons, looked into your program and institution policies, and want to move forward with medical moonlighting. How do you find moonlighting opportunities?

If your hospital offers internal moonlighting shifts, that can be a good place to start your search. Internal moonlighting lets you work under your existing training license and malpractice insurance coverage.

If internal shifts are not available or you prefer to work external positions, you can find them through locum tenens staffing agencies. You can also find moonlighting opportunities through online job boards, such as:

•   Moonlighting.org

•   ZipRecruiter

•   Indeed

•   ResidentMoonlighting.com

Moonlighting jobs are available for physicians that work in a variety of medical specialties. It’s just a matter of finding ones available in your area. You might also consider using moonlighting as an opportunity to work in a more generalized specialty, like internal medicine, rather than looking for positions in their more specialized field.

The Takeaway

Moonlighting as a resident can help you earn extra money and start paying down medical school debt, while also gaining more practical experience. But before you start moonlighting in residency, you’ll want to make sure your medical school allows it. You’ll also need to monitor your working hours to ensure you’re following the ACGME 80-hour work week policy. Any internal or external moonlighting you do will be considered part of that 80-hour work week.

If you decide to move forward with medical moonlighting, you can start exploring your options and looking for a moonlighting gig that you think you’ll enjoy, that pays well, and that continues to give you more experience.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Personal loans can be either secured or unsecured. A secured personal loan has collateral that backs the borrower’s promise to repay the loan. An unsecured personal loan does not require collateral, and the only thing backing the borrower’s promise to repay is their creditworthiness.

The collateral requirement is the main difference between secured and unsecured personal loans, but there are other differences that may inform your decision about which type of loan is best for your financial needs.

What Is a Secured Personal Loan?

A secured personal loan is a loan for which the borrower pledges collateral that the lender can take possession of if the borrower fails to repay the loan. Put in simpler terms: If you default on your car loan, for example, the bank can repossess your car. For the lender, collateral equals a certain level of security.

Collateralized loans are common for mortgage and auto loans. A home is collateral for a mortgage, and a vehicle is collateral for an auto loan. They are somewhat less common for personal loans, though.

A personal loan isn’t tied to a particular asset in most cases, so there’s not an obvious item to pledge as collateral. The asset pledged must be owned by the applicant, and the lender will evaluate its value to be sure it’s equal to the amount of money being loaned. In some cases, a physical asset such as a vehicle is put up as collateral, but the collateral could also be an asset like a savings account or certificate of deposit.

Pros of Secured Personal Loans

While it may seem like the lender benefits more with a secured personal loan, there may also be advantages for the borrower.

•   Lenders typically see secured personal loans as less risky than their unsecured counterparts because there is an asset to back the loan if the borrower defaults.

•   Borrowers may get a lower interest rate on a secured personal loan than they might on an unsecured personal loan.

•   Secured personal loans can be a good way for borrowers to build credit, as long as they make regular, on-time payments.

Cons of Secured Personal Loans

Things that a borrower might see as a drawback to a secured personal loan might be a benefit to the lender. But each party to the loan agreement takes risks.

•   The lender is able to recoup its losses by seizing the collateral if the borrower defaults on their secured personal loan. However, it may take a while to liquidate that asset. If the collateral is a physical asset, such as a vehicle, it may take some time to find a buyer willing to pay the price the lender has set.

•   For the borrower, the main drawback to a secured personal loan is the possible loss of the asset pledged as collateral if they default on their loan.

•   The application and approval process may include more steps for a secured personal loan than an unsecured one because the asset’s worth will need to be valued.

💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.

What Is an Unsecured Personal Loan?

A personal loan that is backed mainly by the creditworthiness of the borrower is an unsecured personal loan. Sometimes called a signature loan, an unsecured loan does not require any collateral to guarantee the loan.

Defaulting on an unsecured personal loan can certainly have a negative effect on the borrower’s credit, but there wouldn’t be an asset to lose in addition.

Pros of Unsecured Personal Loans

Like their secured counterparts, unsecured personal loans can have benefits for both lender and borrower.

•   Lenders may be able to charge a higher interest rate on an unsecured personal loan because there isn’t any collateral to secure the loan. (This is a drawback for the borrower — see below.)

•   The borrower won’t lose an asset if they default on an unsecured personal loan.

•   The application process for an unsecured personal loan is generally much quicker than for one that’s secured because there is no asset to be valued.

•   Funds may be disbursed the same day or within a week, depending on the lender.

Cons of Unsecured Personal Loans

It may be relatively easy to find lenders who offer unsecured personal loans, but there are aspects that may be considered drawbacks.

•   Interest rates on unsecured personal loans may be higher than for secured personal loans because there is no asset backing the loan.

•   Some lenders may have minimum credit score requirements for approval of an unsecured loan, so applicants with poor credit may not qualify.

•   If the borrower defaults, their credit score may be negatively affected.

•   Applicants with lower credit scores may not qualify for loan amounts as high as those with higher credit scores.

Recommended: Personal Loan Calculator

Choosing Between Secured and Unsecured Personal Loan

There are lots of reasons for considering a personal loan in general, but choosing between a secured and an unsecured personal loan means taking some specifics into account.

Do You Have Collateral?

One of the main things to consider when thinking about applying for a secured personal loan vs. an unsecured personal loan is whether you have an asset of value that you’d be willing to risk.

If you do have such an asset, you may want to compare lenders who offer secured personal loans. Some online lenders offer secured loans, but they’re more commonly available through banks or credit unions.

Lenders may offer higher loan amounts for a loan backed by collateral than for one that isn’t, so if you need to borrow a large amount, it might be worth looking into a secured personal loan.

What Are You Planning to Use the Funds For?

Personal loan funds can generally be used for a wide variety of things, like debt consolidation, unexpected medical expenses, home improvement costs, and more.

If you need funds to pay multiple vendors or contractors — common in the case of wedding or home improvement costs — or you plan to consolidate other high-interest debt, an unsecured personal loan might be the right choice for you.

If you plan to purchase a specific item that might be considered an asset, however, the lender may want to attach that asset as collateral on the loan, thus making it a secured loan. Examples of this might be a secured personal loan to purchase land or to buy a boat.

What Type of Lender Is Right for the Loan You Need?

Another factor to consider when choosing between a secured or unsecured personal loan is the type of lender you’d rather work with.

Unsecured loans may be available through banks, credit unions, or online lenders. Not every financial institution offers unsecured loans, however.

Secured loans are more commonly offered by banks and credit unions — it’s less common to find one through an online lender.

If you have a savings account or certificate of deposit at your bank that you’d be willing to put up as collateral, it might be worth looking into a secured loan with your current bank.


💡 Quick Tip: Generally, the larger the personal loan, the bigger the risk for the lender — and the higher the interest rate. So one way to lower your interest rate is to try downsizing your loan amount.

Qualifying For a Personal Loan

There are different factors that go into qualification for a personal loan.

Each lender may have its own credit score, income, or debt-to-income ratio requirements, in addition to other factors. If you’re applying for a secured personal loan, each lender may have its own requirements for valuation of collateral.

It’s a good idea to compare lenders so you’ll have an idea of what they commonly require for an applicant to qualify for a personal loan. With that knowledge, you can better evaluate your own credit for the likelihood of being approved — or not.

Reviewing Your Credit Report

You can get a free copy of your credit report annually from each of the three major credit bureaus: Equifax™, Experian™, and TransUnion™. It’s a good idea to check all three because not all lenders report payment history to all three bureaus. The credit bureaus don’t share information with each other, so getting a complete picture of your credit may mean looking at all three reports.

Your credit report contains personal information about you and information about past and current credit accounts in your name.

Personal information includes:

•   Name, current as well as any other names you may have gone by in the past

•   Addresses, current and previous

•   Birthdate

•   Social Security number

•   Employer

Lenders typically report:

•   The total amount of the installment loan or line of credit

•   Your record of on-time payments

•   Any missed payments

If you’ve had any bankruptcies, foreclosures, or repossessions, they will likely be included on your credit report as well.

If there is missing, incomplete, or incorrect information on your credit report, you can file a dispute with the credit bureau. It’s a good idea to clear up any errors before you start applying for a loan so you don’t have any unexpected roadblocks on the way to qualification.

If, in the process of reviewing your credit report, you find that you don’t have much of a credit history or your credit isn’t up to qualification standards, you may decide to take some time to work on improving your credit situation. That could mean increasing your income, lowering your expenses, paying down or consolidating existing debt, or just learning how to better manage your overall finances.

Recommended: How to Get Approved for a Personal Loan


The Takeaway

There are situations where an unsecured personal loan might be the right financial tool for you, and there may be others that would be better suited to a secured personal loan. The main difference between the two types of loans is that one requires collateral — a secured personal loan — and the other doesn’t — an unsecured personal loan. Deciding between the two depends on the borrower’s willingness to risk the loss of collateral, as well as their overall creditworthiness.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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