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Students learning about refinancing options

What to do Before Refinancing Student Loans

As a doctor finishing up residency, or a dentist or veterinarian looking to buy your own practice, you’re elated to have made it through school. Now, it’s time to begin your career helping and healing people – or maybe golden retrievers. You may also be looking to save money on student loan repayment, since you finally have time to think about medical student loan refinancing.

With student debt reaching unprecedented levels, refinancing could make a big impact on your financial future. The five steps outlined below can help you qualify for lower interest rates and maximize your savings.

1. Pull your credit report

By regularly checking your credit report, you can ensure your credit activity is accurate, and gain insight that may help you improve your credit score. Learn more about your credit report why it matters.

The following websites let you see your credit score, free of charge, as well as a recent credit report:

It’s important to note that when you apply to refinance your student loans, you’ll have an inquiry on your credit report – so, make sure you choose a lender that will save you money, and that you’ll want to stick with for the long term.

Note: If you have a credit card with Commerce Bank, you’ll see your current FICO score on your statement each month.

2. Check lender requirements

Every lender is different, but most lenders will take your credit score, employment status, and debt-to-income ratio into account when you apply to refinance student loans. These factors may also affect the interest rate you qualify for with certain financial institutions.

Tip: look for a bank that will do a soft credit pull first, so you can see the rate you might qualify for without having a hard pull on your credit. This is important, because a hard pull typically lowers your credit score a few points.

Above all, look for a trustworthy bank partner that has a strong financial history. Will you be working with the same individual, or passed from person to person at a Call Center? Commerce Bank offers personal banking relationships, and one dedicated Student Lending Specialist to help you understand all your options.

3. Create a financial snapshot

By writing down your current loan balance, the interest rates on all of your loans, and obtaining a copy of your most recent tax return, you’ll be well-prepared when it comes time to apply for student loan refinancing. You can find a listing with all of your student loan information at

It’s also a good idea to calculate what you would actually save by refinancing student loans. If a few of your loans are at a high interest rate, but the others are low, it might be a good idea to only refinance the loans that are at a high rate.

4. Make a plan to pay down credit card debt

Try to pay off as much credit card debt as possible before refinancing your student loans. Your debt-to-income ratio (total monthly debt payments/gross monthly income) may impact your interest rate, so a lower credit card balance could result in a lower refinancing interest rate.

Make a list of all existing debt – student loans, car payments, credit card debt – and look for areas where you can make extra payments. Some financial experts recommend tackling debt with the snowball method, while others recommend paying off the credit card with the highest interest rate first. Do your research and use the method that makes sense for you.

5. Consider all repayment options

While student loan refinancing is the right repayment option for many, it’s important to make sure it’s right for your unique circumstances. For example, when you refinance your student loans with a private lender, you no longer have access to federal loan benefits like income-driven repayment plans.

Maybe you need to extend your repayment term, so you can lower your monthly payment.  Look for lenders that don’t have prepayment fees so you can pay more as your income rises. Consider your goals, calculate potential savings and make a plan from there.

The decision to refinance student loans is a significant one. If you are curious about your options or want to learn more, set up a consultation with our Student Lending Specialist. We’re here to help you understand your choices – and save time and money.

Learn More about the student medical refinancing loan

Also See

Should you refinance?
3 simple steps for tackling your medical student loan debt.