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If the most exciting part of finally graduating from law school and passing the bar is getting your bar card in the mail, the least exciting part may well be making the first payment on your student loans.

Despite the fact that law school may be a sound investment—after all, the median lawyer salary in the United States was $120,910 annually in 2018, according to the Bureau of Labor Statistics —it certainly comes with a hefty price tag.

The average young lawyer now carries over $140,000 in student debt, and figuring out how to set up a loan repayment plan can be daunting. After all, a six-figure debt is nothing to take lightly.

Finishing law school already comes with a lot of responsibility: you may find yourself moving or changing cities, starting a new job, or just adjusting to the new responsibility of dishing out legal advice for a living.

On top of that, starting to pay off your student loans can feel like a challenge. Unfortunately, student debt is not an uncommon barrier to face after graduation; in fact, it’s becoming the norm. And yet, there are reasons why being a newly minted lawyer with debt could put you in a better position than graduates in other fields.

For one, the good news is that you’ve chosen a profession where even your starting salary likely puts you well above the median American household income —which was at $61,937 annually for 2018.

Not just this, there are a ton of debt repayment options available to law school graduates, including attractive student loan repayment programs and forgiveness programs that could have you saying goodbye to your debt—if you’re in the right sector.

Ultimately, once the initial sticker shock of your student loan debt wears off, you may realize that you have numerous options at your fingertips that could help you move out of the situation you’re currently in and into one that’s much more financially comfortable.

Sure, tackling student loan debt is a challenge—for anyone. But it is a challenge you can rise to, especially with the help of other lawyers who have been in your shoes.

Whether you’re a legal services attorney or a first-year associate, a good first step on your road to career fulfillment could be creating a plan to tackle your student debt.

Ahead, we take a look at some of the options that may be available to you and uncover some tips for those attorneys who are saddled with high student loan debt—plus ways to move forward.

Taking Advantage of Your Law School’s Loan Repayment Program

New graduates with large debt loads may find themselves obsessing over the amount of debt they owe, instead of focusing on available repayment options. It’s basically the same advice that driving instructors give to new drivers: If you spot a car wreck on the side of the highway, the best way to avoid it is to keep your eyes on the road—not on the accident.

So, how can you shift your thinking and develop a more solutions-based approach when you’re facing a mountain of debt? When it comes to significant student loan debt, the answer may lie in taking the time to do your research and focusing your attention on the resources you may already have at your disposal:

One option to explore is the sort(s) of loan assistance offered by your law school. Some schools may have helpful loan repayment programs, including Loan Repayment Assistance Programs (LRAPs) , which can make it easier for law school graduates to work at public interest jobs, which typically pay less than private firms, by offering income-based repayment assistance.

That said, it’s important to pay careful attention to your student loan terms. For instance, Columbia University suggests a 10-year repayment term is the best option to take advantage of their LRAP, which would likely mean bigger monthly payments, but over a shorter period of time.

Looking Into Federal Loan Forgiveness Programs

Imagine this: You find your dream fellowship, internship, or job right after graduation, and not only does it put you on a path towards gaining valuable experience in your field, but it also comes with an unexpected added perk—debt payoff assistance.

Student loan forgiveness programs aren’t altogether uncommon for those in the legal field. In fact, there are many possible scenarios in which you could find yourself getting some help paying off your debt—or having the remainder forgiven altogether.

Typically, law school loan forgiveness is reserved for lawyers working in the public sector. Many times, public service lawyers earn lower salaries than those in the private sector, and so forgiveness programs are usually geared towards lower earners who may need more help shouldering their debt.

Public Service Loan Forgiveness (PSLF), for example, is a federal loan forgiveness program that eliminates federal student loan balances for eligible borrowers who make on-time loan payments for 10 years while they’re working for a qualifying nonprofit or in a government sector.

In addition to this, some states also offer loan forgiveness for attorneys through LRAPs. LRAPs typically require that you graduate from the academic institution that awarded you LRAP initially, work around 30+ hours per week, and start paying off your loans immediately.

These aren’t the only options available. Added bonus: Typically, loan forgiveness programs can be used as long as you qualify, so you may be able to “double-dip” if you qualify for more than one. Be sure to check the criteria for each program to confirm; there are some, such as teacher loan forgiveness programs, that do not allow “double-dipping.”

One tip: Search for and fit your repayment plan to your personal circumstances and situation. For instance, if you’re going into public interest law, there are loan forgiveness, assistance, and deferral programs. And you’ll want to ensure that your job meets the requirements for those programs.

Considering Consolidating or Refinancing Your Student Loans

If you find yourself dealing with more than one student loan, a possible option may be to consolidate or refinance your loans so that you can just worry about paying off one lump sum.

Depending on your exact circumstances, student debt consolidation may provide some peace of mind and the ability to more easily manage your repayment, given that consolidation means combining existing student loans into one.

(Note: If you refinance federal loans with a private lender, you will no longer qualify for federal loan benefits, such as PSLF, discussed above, or federal income-driven repayment plans.)

If you decided to consolidate your federal student loans into one Direct Consolidation Loan, you can always consider refinancing in the future once you are in the market for a better interest rate.

One tip: instead of treating your repayment plan as if it’s set in stone, consider ways it may need to (and could) change if your financial situation changes.

Reallocating Your Debt (If Possible)

Depending on which stage you are at in your debt repayment process, there may be options available for you to reallocate your debt. Sometimes, if you come to own property, you can use this to your advantage by borrowing or reallocating existing debt against the value of the property.

However, converting unsecured debt (like a student loan) into debt on a secured lien such as your home can come with risks. For example, if you were unable to pay your mortgage and went into loan default, you could lose your home. So, as with anything, it’s important to weigh the costs and benefits.

One tip: Take the time to research and fully understand ways to tackle law school debt. And if you have the opportunity to borrow money from, for instance, home equity, you may be able to obtain more favorable terms on your mortgage while paying off your student loan at the same time. Some mortgage lenders actually offer loans specifically tailored to pay off student loan debt.

And a Favorite Tip: Throw Some Extra Money at Your Loans When You Can

If you’re looking to find tips to conquer your student loans the old-fashioned way, you can always tighten your belt and put every available dollar towards your debt. Of course, this strategy can be used in conjunction with just about any other plan, and it’s a valuable thing to consider. After all, extra money can add up quickly. And you can always make prepayments on student loans—federal or private—you have the right to pay off your student loans as fast as you want .

Debt can be an overwhelming thing to face, but by being proactive and funneling any and all extra cash into your student loan repayments—yes, that includes that unexpected bonus or inheritance money—before you know it, you may realize that your mountain of student loan debt has, over time, become a molehill.

Here are some tips to get started:

When you’re still in school, if you have leftover loan money at the end of the semester, you can pay it back into your loans to avoid compounding interest.

If you’re doing pretty well financially for a few years out of school, you might allocate some of your high salary to pay off your loan, or pay as much extra as possible. Ditto with getting a raise: although it may be tempting to upgrade your lifestyle, sticking to the same budget and using that money to pay down your law school loan debt might be a good option—potentially saving you money and worry.

If you’re ready to get ahead and tackle your debt from law school, SoFi is here for you. Refinancing your student loans with SoFi may even save you money in the long run.

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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.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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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.

SLR17160

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If you’ve taken out student loans to invest in your education, you know that paying interest on those loans is simply part of the deal. But while “interest” can seem like an abstract notion when you first take out loans, over time it can become a force to be reckoned with—particularly for the many MBA, law, and med school grads with six figures worth of education debt to repay.

For example, using a student loan calculator to get a rough estimate, you can see that a borrower with $100K in student loan principal at a 6.8% weighted average interest rate and a 10-year term can expect to pay an estimated $38K in interest over the life of the loan. And that’s if they make every payment on time.

Paying interest on student loans may be unavoidable, but there are a few mistakes that can cause some borrowers to pay more interest than they need to. Read on for tips on how to help prevent these blunders from affecting your bottom line.

Mistake #1: Using Forbearance When It Isn’t Absolutely Necessary

Most federal loans and some private loans may allow borrowers to use forbearance to temporarily reduce or suspend loan payments in the event of qualifying financial or medical difficulties.

But in most cases interest continues to accrue while payments are on pause—which means that the longer borrowers remain in forbearance, the more they may have to pay in the long run. (See Mistake #5 below.)

So if the goal is to minimize interest expenses, forbearance is typically an option best reserved for extreme financial hardship. Resuming regular payments as quickly as possible could be another way to minimize accrued interest.

If the borrower has federal student loans, enrolling in an income-driven repayment plan might be another option to consider. The monthly payment for an income-driven repayment plan is based on the borrower’s discretionary income and family size.

In certain cases (qualifying unemployment or the inability to work because of an illness, for example) payments could be as low as $0. After the period of financial hardship has passed, the borrower re-certifies the loan using new income information. (Recertification is required every year.)

Mistake #2: Unnecessarily Extending the Repayment Period

Federal student loan consolidation with a Direct Consolidation Loan allows borrowers to combine two or more eligible federal loans into just one loan, helping to streamline their monthly bills.

When borrowers consolidate, they’re typically given the option to lower their monthly payment by extending their repayment period. (With federal loan consolidation, the new interest rate is the weighted average of the borrower’s existing loans, rounded up to the nearest one-eighth of a percent. So extending the repayment period is the only way to lower the payment.)

For those who are struggling to make payments, that may be tempting. However, those smaller monthly bills can come at a price. Extending the payment term from 10 to 30 years, for example, would mean the borrower has to pay considerably more interest over the life of the loan. (Because the borrower would be accruing 20 additional years of interest.)

Mistake #3: Not Prepaying When Possible

All education loans, whether federal or private, allow for penalty-free “prepayment,” which means borrowers can pay more than the minimum required and pay off their loan balance early, without incurring any extra fees. Even paying an extra $100 per month could go a long way.

Whether it’s increasing monthly payments after receiving a raise or putting half of a bonus toward student loans each year, every little bit helps to drive down total interest.

Student loans are amortized, which means a portion of each payment is applied to the principal each month and a portion goes toward interest.

Early on, a larger portion typically goes toward interest, so the principal balance goes down pretty slowly. Usually, it isn’t until the borrower has made years of payments that a noticeable amount starts being applied toward the principal. One way to speed up that progress—and knock down the debt faster—is to pay more than is required each month.

(Borrowers should be sure to tell their lender what they’re doing and verify that their prepayments will be applied to their loan principal.) Borrowers can use this calculator to see how prepayment could help them get out of student loan debt sooner.

Mistake #4: Starting Accelerated Repayment Efforts with the Wrong Student Loan

Borrowers who have more than one student loan may choose to make extra payments on one loan at a time. It can be tempting to start on the loan with the smallest balance, put extra payments toward it while making timely minimum payments on other loans, get the emotional boost from eliminating that bill, and then move on to the next.

This approach is sometimes referred to as the “snowball method,” and it can be useful for borrowers who need the gratification of a faster payoff to stay motivated. But it might not save the most interest.

Prioritizing the loan with the highest interest rate (the “avalanche method”) can make more sense mathematically and might be more efficient for those who have the discipline to stick with it. And borrowers still can be excited as they watch the balance on that high-interest student loan go down.

There are a few online calculators that could be used to compare the avalanche method to the snowball method . Comparing the estimated interest payments and debt free dates could help borrowers determine which method will work best for them.

Mistake #5: Underestimating the Impact of Interest Capitalization

Deferment and forbearance periods may feel like a helpful option to escape making federal student loan payments when a borrower is struggling financially. But taking a break can be tricky.

The federal government will pay the interest on subsidized loans during deferment periods, but it won’t pay the interest on unsubsidized loans during deferment or on any loans during forbearance.

Unpaid interest also may accrue if a borrower is repaying federal student loans under an income-driven repayment plan and the monthly payment is less than the amount of interest that accrues between payments.

If a borrower doesn’t pay the interest as it accrues, that interest can be capitalized, or added back onto the principal balance of the loan. And any interest payments made after that will be calculated based on this new balance.

Interest also can capitalize when a student loan enters default, or when the six-month grace period ends. So, if it’s at all possible, borrowers who choose to press pause on their loans may want to try to make interest-only payments during that time.

Mistake #6: Failing to Claim the Student Loan Interest Deduction

OK, technically, this isn’t a way to save money on interest. But it can help alleviate some pressure for borrowers with qualifying student loan debt, since this student loan interest deduction can potentially reduce the amount of income that is subject to tax. (Reminder: Taxes can be tricky, and we are not here to provide tax advice. This is just a high-level look at a potential tax deduction, and isn’t a definitive accounting of the information available. Always consult with a tax professional about tax deductions and any questions around them.)

Borrowers may be able to deduct up to $2,500 on federal and student loans on their federal return each year. That’s $2,500 per return, so those who are married and file a joint return have the same $2,500 cap even if both spouses have student debt.

The deduction begins to decrease at a certain income threshold, depending on the taxpayer’s filing status. For the 2019 tax year, the deduction starts to phase out at a modified adjusted gross income (MAGI) above $70,000 for single and head of household filers, and it’s eliminated entirely at a MAGI above $85,000.

For those who are married filing jointly, the phase-out starts at a MAGI above $140,000 MAGI and is eliminated for those with a MAGI above $170,000.

For a student loan to qualify under the IRS’s rules , it must have been obtained with the sole purpose of paying for qualified education expenses for the taxpayer, the taxpayer’s spouse, or someone who was the taxpayer’s dependent at the time he or she took out the loan.

The person for whom the loan was taken must have been enrolled at least half-time in a program that leads to a degree, certificate, or other credential. The loan can’t have been from a relative. Qualified education expenses can include things like tuition, books, supplies, equipment, and, in some cases, room and board.

Because this deduction is claimed as an adjustment to income, taxpayers don’t have to itemize to take it, but it does require proper documentation. If the loans are officially referred to as student loans—whether they’re federal or private student loans—the lender would send a Form 1098-E, Student Loan Interest Statement. Borrowers can claim the interest from some other types of loans but will have to track those amounts on their own.

Again, taxes can be tricky, so definitely consult with a licensed accountant or tax professional to get the low-down on all the details of this or any other tax deduction.

Mistake #7: Not Signing Up for Autopay

With automatic payments, student loan payments are transferred directly from a borrower’s bank account to the lender, which reduces the chances of a late payment and gives the borrower one less thing to worry about.

There’s often another important perk: Some lenders will reduce the interest rate on the student loan by a certain percentage.

For those who keep enough funds in their account to cover their bills every month, it’s another potential way to save. And if the situation changes, and a manual approach becomes necessary, a borrower should be able to stop automatic payments at any time.

Borrowers who like the idea of making extra payments could set up their autopay to make a half payment every two weeks, or 26 half payments each year. That option adds up to 13 full payments instead of 12—or one extra payment. (This can be done manually, as well—it’s just that autopay typically makes it easier.)

Mistake #8: Making Late Payments or Going into Default

Failing to make payments can have several negative repercussions, including legal consequences if the borrower defaults on the loan. Both delinquency and default can also negatively impact the borrower’s credit score.

A lower credit score may reduce a borrower’s chances of getting a competitive interest rate on a refinancing loan, or on other types of loans or credit cards in the future.

Mistake #9: Neglecting to Explore Refinancing Options

Another opportunity that could allow borrowers to stick it to student loan interest is to refinance student loans at a lower interest rate and, possibly, a shorter repayment term. And some lenders, including SoFi, offer both variable and fixed rate loans, so borrowers can choose what best suits their needs.

Refinancing can typically be an attractive option to borrowers who have a solid financial situation—for example, a comfortable debt-to-income ratio (among many other possible considerations). However, before refinancing federal student loans, borrowers should check to see if they qualify for any forgiveness programs or other federal benefits (like income-driven repayment plans) and other repayment options that are forfeited when refinancing federal student loans with a private lender.

Bottom line: Refinancing to a shorter term with a lower interest rate can help eligible borrowers take a big bite out of total interest.

If you’re interested in seeing what your student loan interest rate could be after refinancing, you can check in two minutes or less with SoFi.

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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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.

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.

SLR14100

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Applying for a personal loan can be a little scary. After all, lenders don’t hand out cash willy-nilly, even when they’re being paid interest.

When applying for a personal loan, you will normally need to show that you have a good credit score and a high enough income to ensure that you’ll be able to handle your monthly payments (among other requirements). It’s good to note that loan qualifying criteria around minimum credit score required and sufficient income may vary between lenders and even loan programs. It is recommended that you do your research to discover which loan program offers the best fit for you.

Luckily, if your credit score isn’t quite perfect or you’re still waiting on that raise, you may be able to leverage a co-borrower to help get the personal loan you want with the repayment terms you need.

Even if you haven’t heard of a loan co-borrower before, you may have already used one. If you, for example, had your Aunt Mavis sign on as a co-borrower with you for a private student loan or as a guarantor for your first post-college apartment, you have seen the power of the co-borrower to help get your loan or lease approved.

Co-borrowers can help you secure a personal loan when your credit or income doesn’t quite match a lender’s requirements. Having a co-borrower might even help you get a more favorable interest rate on your personal loan. Here’s what to know about using a co-borrower to help secure a personal loan.

What Is a Personal Loan, Anyway?

Before we dive into tips on using a co-borrower, let’s take a step back: What is a personal loan and why might you want one?

A personal loan is an installment loan that is typically an unsecured loan. With an unsecured personal loan, you borrow from a lender with the agreement to pay it back, plus interest, in a set amount of time.

Unlike mortgages and auto loans, personal loans aren’t necessarily tied to a physical asset you put down as collateral, which is what “unsecured” means. However, personal loans can be offered as secured loans, so check the details when rate shopping.

Unsecured personal loans tend to carry slightly higher interest rates than secured loans. After all, the lender doesn’t have a secured asset to seize if you default!

Even though unsecured personal loans typically carry higher interest rates than other, secured loans or credit cards, they can be a useful financial tool to help you consolidate existing debts, fund major personal projects, and more.

And when you apply with a co-applicant (who, if you’re approved, would become your co-borrower), you may significantly increase your chances of qualifying, as well as achieving a lower interest rate or more generous loan repayment period.

What Is a Co-Applicant?

A co-applicant is an additional person who applies for a loan with you in order to help you qualify. Similar terms are “co-borrower” or “co-signer” (we’ll get into the differences below) and by having one, you may be able to secure better interest rates and repayment terms.

Whether a co-borrower or co-signer, the additional person’s credit score and financial history is considered along with yours when applying for a loan. That can be a big help if your own credit history is less than perfect, or if you’re young and haven’t had very much time to build up a robust credit score quite yet.

Differences Between a Co-signer and a Co-borrower?

Both co-signers and co-borrowers are considered co-applicants at first, but they serve different purposes. Whether you need a co-signer or co-borrower usually depends on your individual circumstances. Each type of co-applicant has specific requirements and potential benefits.

A co-borrower essentially takes on the loan with you. Their name will be on the loan with yours, making them equally responsible for paying back the loan. Co-borrowers are frequently used in situations where the loan received has benefits for both of you, whether through a business arrangement or a family arrangement.

An example: You and your partner want to take out a personal loan in order to renovate the garage into a nursery for a baby on the way. You may want to apply as co-borrowers for a loan to pay for the contractor. Because both partners’ incomes and credit scores are considered in approving the loan, this may increase your chances of approval and possibly even lower the interest rates you’re offered.

A co-signer, on the other hand, is someone who helps you qualify for a loan, but isn’t your partner on the loan, as in the case of a co-borrower. A co-signer typically is only responsible for making the loan payments if you are unable to make them, but has no usage or ownership rights. However, credit for both co-borrowers and co-signers will be negatively impacted if the main borrower misses payments.

For example, private student loans are often taken out with parents or other family members as co-signers, since most recent high school graduates haven’t built up a significant credit history.

Adding in mom’s or dad’s credit history may help these students qualify for the student loans they need to get started on their college journey, but it does mean putting their parents’ credit reputation on the line if they default.

Considerations when Applying for a Personal Loan With a Co-applicant

The biggest challenge you might face in securing a co-applicant for a personal loan is finding someone willing to sign on the dotted line. After all, if you find yourself unable to repay the lender, your co-borrower will be on the hook for payment.

That’s why many people who are looking for a co-applicant start with parents, siblings, and other family members who they feel comfortable asking. Blood runs thicker than water, after all, and your close family have likely been supporting you in one way or another since birth.

It is recommended that you have a heartfelt, upfront conversation about the responsibilities that come with being a co-borrower and be ready to present your potential ally with your plan for repayment. For instance, a co-borrower is likely to see a negative impact on their credit score if they fail to make a payment. Since a co-applicant becomes a co-borrower once a loan is funded, you’re in this together, so if paying back the loan does not go according to plan, you both would be equally affected.

If you’re looking for a co-applicant, you might already know exactly who you’ll ask. If it is a loan to benefit your family, such as making home improvements, it likely makes sense for your partner or spouse to serve in the position.

As with a co-signer, make sure to talk openly and clearly about the responsibilities that come with being a co-borrower, including the responsibility for making payments.

After you’ve found your co-applicant, make sure to research which personal loans accept co-applicants. Some lenders accept co-borrowers but not co-signers, and some lenders accept both. SoFi does not accept co-signers for personal loans, but will accept co-borrowers.

When Does It Make Sense to Take Out a Personal Loan?

Given the risks that both you and your co-applicant assume in taking out a personal loan, you may wonder if this move is ever financially savvy.

After all, the conventional wisdom is to avoid debt at all costs, and unsecured personal loans tend to carry higher interest rates than loans for which you put down collateral, like a mortgage.

However, personal loans can be a sound financial tactic, for example, for the purpose of debt consolidation. That’s when you pay off multiple existing debts with one larger loan, which can simplify bill repayment and save on interest.

For instance, if you’re making payments on two or three credit cards with different interest rates and different due dates, it might be difficult to keep track of everything—let alone get ahead.

However, taking out one personal loan large enough to pay those debts off, generally means only one monthly payment and one interest rate, which could possibly save you money in the long run as well as making your life a little easier. Personal loans can also help you fund home improvements or even cover unexpected medical bills.

If you qualify to borrow money through a personal loan with SoFi, there are no prepayment penalties or origination fees. And as a SoFi member, you’ll have access to member benefits like career counseling and community events.

Plus, we make it easy to find out if you (and your co-applicant) prequalify online. You’ll fill out a bit of personal information and SoFi will run a soft credit check (which doesn’t impact your credit score1). It takes just minutes to see what you may qualify to borrow and what your interest rate could be.

Ready to apply for a personal loan with a co-applicant? Learn more about the potential benefits of a personal loan with SoFi.

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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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.

PL18200

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Finishing veterinary school is an incredible achievement. After so much training and dedication, it’s finally time for new vets to turn their passion for improving animal health into a rewarding and meaningful career. But one thing might be standing in their way: student loan debt.

Veterinarians graduating in 2018 had an average student debt load of $183,014, including vets who didn’t take out any loans.
That’s a pretty steep hurdle for anyone starting out in a career. Based on these numbers, it’s no wonder that recent Doctors of Veterinary Medicine, or DVMs, might be struggling to find a healthy balance between loan repayment, saving for retirement, and helping their furred and feathered patients.

Luckily, there are more than a few repayment options out there that cater specifically to veterinarians. Some programs offer tuition repayment assistance in exchange for short-term work, while others offer student loan forgiveness for long-term service. In addition to these, there are a few often-overlooked refinancing options that might also help borrowers reduce their debt. Let’s take a look to see which financing options might fit different vets’ unique career needs.

Veterinary Loan Repayment Programs

If a vet specializes in large animal or veterinary agricultural medicine, there are a few loan repayment programs that might reduce their debt in exchange for a few years of work.

For a student still in the process of researching and applying to veterinary schools, it might be worthwhile to take note of which state universities offer student loan repayment assistance to their students in exchange for several years of post-graduate service in local agricultural veterinary medicine. Some schools offer a wide range of loan repayment assistance for veterinary students. Here are just a few:

The Veterinary Medicine Loan Repayment Program

The Veterinary Medicine Loan Repayment Program (VMLRP) is a federal program established in 2003 by the USDA. In exchange for three years of service in a location where there is a shortage of veterinarians, a borrower can receive up to $25,000 each year (up to three years) in loan repayment assistance.

State Veterinary Loan Repayment Program

Some individual states also offer loan repayment programs to attract large-animal vets to remote areas. While some of these programs are tied to specific state university veterinary programs, others are designed to attract recent graduates.

For example, North Dakota offers up to $80,000 in repayment assistance for four years of service working with food supply animals, and Maine provides up to $100,000 for up to four years of service. On the other hand, Pennsylvania only forgives a maximum of $10,000.

Veterinarians might want to contact their state before accepting a job solely because they believe their loans will be forgiven. Funding sometimes varies from year to year in certain states, so it can be helpful to double-check that the state is participating in loan forgiveness at the time they want to enroll.

The U.S. Army Medical Department

The U.S. Army Medical Department (AMEDD) also offers loan repayment as a benefit to qualifying veterinarians. For active-duty servicemembers, vets are eligible for up to $120,000 in student loan repayments over a three-year period, receiving $40,000 per year. For those who enter the reserves, up to $50,000 is offered over three years, receiving $20,000 the first two years and $10,000 the third year.

The Federal Faculty Loan Repayment Program

If someone comes from a disadvantaged background and plans to go into academia, the Federal Faculty Loan Repayment Program offers up to $40,000 in repayment for veterinarians who serve on the faculty of eligible universities for two years. The program also offers funds to offset the taxes associated with repayment assistance. In 2018, 164 veterinarians applied for the repayment program, and 23 received awards.

The National Institutes of Health (NIH) Loan Repayment Program

The NIH Loan Repayment Program is for veterinarians or other health professionals who focus on research, rather than practical medicine.
The NIH provides eight awards total—five are extramural, meaning they’re given to people who aren’t employed by the NIH, and three are intramural, or for researchers who are employed by the NIH. DVMs qualify for both extramural and intramural awards.

Most contracts last for two years. The repayment amount will total one-quarter of a researcher’s eligible student loans, up to $50,000. People can receive up to $100,000 if they owe more than $200,000 in student loans. Researchers do have the option to renew their awards if they meet certain qualifications.

Intramural General Research awards, which are open to researchers in any field, last for three years. Borrowers who receive the competitive General Research award will have one-quarter of their eligible student loans forgiven, or up to $50,000 per year. Those who receive the non-competitive General Research award will receive one-quarter of their eligible student loans, up to $20,000 annually.

Veterinary Loan Forgiveness Programs

For vets who specialize in areas outside of agriculture, there are fewer well-funded repayment options. However, loan forgiveness programs could be a potential benefit if a vet wants to pursue a career in public service, helping animals in need.

The Public Service Loan Forgiveness Program (PSLF) is a program meant for qualifying federal student loan borrowers working full time in a qualifying position in government, social work, or education, or if they work for a qualifying tax-exempt nonprofit like the American Society for the Prevention of Cruelty to Animals (ASPCA). After they have made 10 years’ worth of on-time monthly payments under a qualifying repayment plan, they could have the balance on their federal Direct loans forgiven.

To anyone who thinks having their vet school loans be forgiven in just 10 years is too good to be true—well, they might be right. It can be difficult to qualify for this program. As of 2019, 110,729 borrowers had applied for PSLF and only 1,216 had been approved.

Reasons for denial range from applicants failing to make payments correctly to working for ineligible employers to attempting to qualify for
ineligible loans.

In President Trump’s 2020 budget proposal, he explains that he wants to eliminate PSLF altogether. If the budget passes, borrowers who take out student loans after July 1, 2020, cannot enroll in PSLF.

Income-Driven Repayment (IDR) Plans

The federal government offers four types of income-driven repayment plans for federal student loan borrowers with eligible student loans. These programs consider a borrower’s discretionary income, which is the amount someone earns after subtracting taxes and essential living expenses. People who enroll in one of these programs could have their vet school loans forgiven after 20-25 years.

•   Income-Based Repayment (IBR): Those who are new borrowers on or after July 1, 2014, will pay 10% of their discretionary income for 20 years. People who were not new borrowers by July 1, 2014, will pay 15% for 25 years. After a borrower has paid for the designated amount of time, their remaining loan balance will be forgiven.

•   Income-Contingent Repayment (ICR): When a borrower enrolls in ICR, they may choose the lesser of two options. They can either pay 20% of their discretionary income each month or whatever they would pay if they spread their loan payment evenly across 12 years—whichever is cheapest. After 25 years, the remaining amount will be forgiven.

•   Pay As You Earn (PAYE): People pay up to 10% of their discretionary income monthly. However, they’ll never pay more than they would had they enrolled in the 10-year Standard Repayment Plan. The remaining balance will be forgiven after 20 years.

•   Revised Pay As You Earn (REPAYE): Borrowers typically pay 10% of their discretionary income. People whose loans were solely for undergraduate studies would make payments for 20 years before the remainder is forgiven. However, people who took out loans for graduate or professional studies (like veterinarians) will make payments for 25 years.

Income-driven repayment plans can be amazing solutions for some borrowers, but they aren’t necessarily the best fit for everyone.

Veterinarians can use a repayment calculator to determine which type of plan is the best match for their needs. Some will discover that one of these income-driven programs will save them the most money, while others may choose to enroll in a standard or graduated repayment plan.

Refinancing Veterinary Student Loans

There’s one other option that might give vets the freedom to design the ideal payback schedule: refinancing their loans. If borrowers have a good credit score and financial profile, they might be able to refinance their loans with a bank or student loan refinancer to get a lower interest rate. Over time, a lower interest rate could potentially save a vet thousands over their repayment period.

Refinancing student loans involves taking out a brand new loan with a new interest rate, and using that loan to pay off existing loans. Lower rates and/or term could help vets pay less in the long run and/or pay off their debt more quickly.

Not only could borrowers improve their loan terms, but making only one payment per month (rather than a separate payment for each individual loan) has the potential to simplify their lives.

When a borrower refinances federal loans, it’s important to keep in mind that they will no longer have access to federal loan benefits, like the PSLF, income-driven repayment, or deferment and forbearance.

But if they don’t plan on taking advantage of these benefits, have a steady income (among other positive personal financial factors), and want better loan terms, refinancing could be the best fit for their needs.

By refinancing with SoFi, vets can refinance both federal and private student loans into one new loan. SoFi members even have access to bonus features, including live customer service and career coaching—at no extra cost!

Those ready to refinance can quickly apply online for free. SoFi offers competitive rates and doesn’t charge application fees, origination fees, or pre-payment penalties.

SoFi offers refinancing with competitively low interest rates. Get started today.

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External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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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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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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Imagine this: Your friends text you, let’s go skiing! And you want to say yes. Who wouldn’t want to glide down a mountain and enjoy an apres ski in a cozy lodge? And no worries, you say, I’ll just put it on the card! Or this: Your best friend plans a destination wedding to France.

Of course you’re going to RSVP yes—you couldn’t miss out on witnessing such a momentous day. And hey, when you use your credit card you’ll earn a few rewards.

Or even this: Your little sister needs a dress for prom, and asks if you’ll cover the cost. It’s a once-in-a-lifetime experience, you think as you hand over your card.

It’s easy to say yes in the moment, offer up your credit card, and think about the cost later. But the shock and stress of looking at your credit card statement after a month of spending can be overwhelming. And when your spending goes unchecked or your balance doesn’t diminish, credit card debt can rack up quickly.

When used responsibly, credit cards can provide the opportunity to do things like build credit and earn rewards points or cash back that can be used for other purchases. When used with abandon, however, careless spending on credit cards can lead to debt—which may feel insurmountable.

It’s no secret that credit card debt is a problem that plagues many Americans. According to the Federal Reserve, consumer debt in 2019 exceeded $4 trillion , over $1 trillion of which is credit card debt.

Nearly 55% of Americans who have a credit card are in credit card debt. The average credit card balance during the first quarter of 2019 was $6,028 , according to Experian. That balance can grow quickly, considering that annual percentage rates (APRs) for credit cards can be quite high (the average APR has hovered around 17% for some time).

Common Ways to Deal with Credit Card Debt

If you’re currently dealing with or have dealt with credit card debt in the past, you know how hard it can be to dig yourself out of the hole. While it can feel like an impossible problem to solve, there are strategies and resources available which may put you on a path toward eliminating your credit card debt once and for all.

When taking action on your credit card debt, it is generally recommended to put a plan in place. There are plenty of strategies that are touted for their ability to help you crush debt. Creating a debt reduction plan might provide the structure you need to meet your goal of debt repayment.

For some, the avalanche method, which organizes debts based on interest rate so the debt with the highest interest rate is targeted first, may make the most sense. For others, the built in reward of the snowball method, which targets debts with the smallest amount first may be preferred.

Regardless of the method you choose, it’s considered best practice when using these programs to try and stick with the debt repayment plan you’ve developed unless you see a compelling reason to switch. It can also be an opportunity to check in with your spending to determine what habits have gotten you into debt. You may find you’ll need to make a few changes to your spending habits to truly eliminate credit card debt from your life.

Beyond aggressively making payments on your debt, there may be other strategies worth considering. For some, it may be helpful to find a way to consolidate your credit card debt into better repayment terms.

One option for this is to use a balance transfer credit card. In concept, these are pretty straightforward. Basically, you open a new no- or low-interest credit card and transfer the balance of your existing credit card to it. You’re then able to pay off your debt with a lower interest rate as long as the balance is repaid within the given timeframe.

This, in theory, could put you on the path to pay off your credit cards in a more timely manner because you may not face high interest payments. But the low interest rate on balance transfer credit cards is usually only offered for an introductory period, commonly anywhere between six and 18 months. After that period expires, the rates usually increase.

If you can pay off the balance transfer card before the low initial rate expires, it could be an avenue worth pursuing. However, balance transfers often come with a fee—usually 3% to 5% of the total amount you’re transferring.

If it’s a large debt, you may end up paying a hefty fee, which may make this option a less attractive method. Another option is borrowing a personal loan for credit card debt consolidation. While it may seem counterintuitive to take out a new debt to help get out of an old debt, it could be worth considering.

FAQs: Paying Off Credit Card Debt with an installment Loan

For some, paying off credit card debt with a personal loan (which is an installment loan) might be a helpful strategy for getting out of credit card debt. Here are some commonly asked questions about debt consolidation loans:

Why use a personal loan to pay off credit cards?

If you have a lot of high-interest credit cards, you can rack up debt much more quickly if you don’t pay off the entire monthly balance, which ultimately might hold you back from building a solid financial future.

Carrying a balance from month to month means you’re not only paying for the upfront cost of your purchases, you may also be paying a hefty fee in interest. On average, households with a revolving balance of credit card debt paid $1,141 in interest.

If you’re in this situation, using an unsecured personal loan to pay off credit card debt can be an avenue worth exploring.

Ways to use a loan to pay off credit card debt

Instead of owing money on multiple credit cards, some people take the total amount owed among all their cards, consolidate that debt into a single loan amount to pay off the credit cards. That is what’s known as an installment loan known as a personal loan.

By doing this, you would then start making payments toward one single personal loan instead of payments to multiple cards. The hope would be that the interest rate on the personal loans would be lower than any combined interest rates on any credit cards you might have.

Is using a personal loan to pay off credit cards the right option for you?

Whether consolidating your credit card debt through a personal loan is right for you is based on different factors.

For instance, what are the balances and terms on your current credit card debt vs the terms you could obtain on a new debt consolidation loan? Try utilizing a debt calculator to help you gather some estimated numbers. If you qualify for a lower interest rate, paying off credit debt with a personal loan has a number of potential advantages. For one thing, consolidating or refinancing debt can help simplify your payment plan, turning multiple bills into one.

Taking out a personal loan to pay off debt can be one way to take advantage of better financing terms such as lower interest rates, which could help save you money in the long run.

Benefits of Taking Out a Personal Loan to Pay Off Credit Cards

Debt consolidation loans can be particularly useful for consolidating debt on multiple credit cards that may have less than favorable terms, and it’s easy to see why. Debt consolidation loans can potentially help you streamline your finances. Making a lower fixed payment on a single loan every month may also help reduce the chances of missing payments.

It is worth noting that some credit card interest rates can vary based on factors such as the type of transaction, purchase, or cash advance, whether the rate is fixed or variable, qualifying criteria, and more.

According to Bankrate.com the average interest rate on a variable credit card is running around 17% and sometimes reaching as high as 29.9% APR if you miss payments. One tool to help you understand how much interest you might be paying is our Credit Card Interest Calculator.

Personal loans, on the other hand, can typically be found at a lower interest rate. A lower interest rate could potentially reduce the amount of interest the borrower is required to repay over the life of the loan.

Depending on your circumstances, a percentage point or two off could make enough of an impact on your interest payments to place you on the path to paying off your credit cards in a more timely manner.

When you take out a personal loan it can be used for almost anything that’s a personal expense, such as general consumer/household purpose, home renovations, and debt consolidation; theoretically, you could use a personal loan to pay for anything from a wedding to an elephant (although good luck finding a low APR on that one).

Potential Considerations Before Taking Out a Loan to Consolidate Credit Card Debt

When considering a personal loan, one way to start could be by making a chart of your debts and their respective interest rates, and calculate how long it could take you to become debt-free.

Also, consider whether you have explored all options in determining how best to position your outstanding debt into better financing terms.

Once you’ve done the initial legwork, a good next step is to compare that credit card repayment plan with a personal loan, and see which is better for your budget.

Check the math and review the loan terms and interest rate to confirm you’d actually end up with a preferable repayment plan. For instance, a lower monthly payment might seem great, but if it ultimately extends the length of your repayment, depending on the rate and term, you might end up paying more in interest than you realize.

Consider your current and future financing terms: whether it’s simply peace of mind in the form of one monthly bill, or saving the maximum amount of money, what works best for one person may not be great for you. If you’re still in doubt about how to best get ahead of your debt, consider asking for help from a professional.

Those professionals could offer some valuable insight to help you create a personalized plan that can help you find the best path toward your financial goals, like living in a debt-free future.

Taking an intentional step toward tackling your debt can be challenging, but with a little creativity and discipline, you can work on managing your debt without letting it slow your financial plans for the future.

With SoFi, you may qualify to consolidate your high interest debt into one single unsecured personal loan, with loan amounts up to $100,000 and fixed interest rates with no origination fees or prepayment penalties.

Ready to consolidate credit card debt? Find out if you prequalify for a SoFi personal loan, and at what rates, in just a few minutes. 

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Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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.

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