How to Get a Loan for Medical School

Medical education often comes with substantial costs, making financial assistance necessary for most aspiring physicians. Understanding the various loan options and processes for securing them is crucial for managing these significant expenses. This article aims to clarify medical school financing, guiding you through loan types, application preparation, and the disbursement process. Knowing these details helps you make informed decisions about funding your education.

Types of Medical School Loans

Medical students typically access federal, private, and sometimes institutional loans, each with distinct features. Federal student loans are preferred due to their flexible repayment terms and borrower protections. These include Direct Unsubsidized Loans and Grad PLUS Loans, both available to graduate and professional students.

Direct Unsubsidized Loans do not require financial need, and interest accrues from disbursement, even while in school. For the 2025-2026 academic year, the fixed interest rate for graduate and professional students on Direct Unsubsidized Loans is 7.94%, and there is an origination fee of 1.057%. Medical students can borrow up to $40,500 annually, with an aggregate limit of $224,000, including any undergraduate federal loans.

Grad PLUS Loans are another federal option, covering costs up to the school’s total cost of attendance, minus other financial aid. They have fixed interest rates, and eligibility requires a credit check. Both Direct Unsubsidized and Grad PLUS Loans offer various repayment plans, including income-driven repayment (IDR) options that adjust monthly payments based on income and family size. They may also qualify for Public Service Loan Forgiveness (PSLF).

Private student loans from banks, credit unions, and other private lenders can bridge funding gaps not covered by federal aid. These loans may have variable or fixed interest rates, with terms dependent on the borrower’s creditworthiness. Unlike federal loans, private loans offer fewer flexible repayment options and generally do not include federal benefits like income-driven repayment plans or loan forgiveness programs. Some medical schools also offer institutional loan programs with favorable terms; inquire directly with a school’s financial aid office about these.

Preparing for Your Loan Application

Before submitting loan applications, prepare your financial information and understand key requirements. The Free Application for Federal Student Aid (FAFSA) is required for accessing federal student loans, including Direct Unsubsidized and Grad PLUS Loans. As a graduate student, you are generally considered independent for FAFSA purposes, meaning you will not typically need to provide your parents’ financial information.

To complete the FAFSA, you will need documents such as your Social Security number, federal income tax returns, W-2 forms, bank statements, and records of investments or untaxed income. The FAFSA typically opens in the fall for the upcoming academic year; submitting it early is beneficial. After submission, you will receive a Student Aid Report (SAR) summarizing your information, which schools use to determine your financial aid package.

Understanding your credit score is also important, particularly if you plan to apply for private loans or Grad PLUS Loans, as these often involve a credit check. You can check your credit score and obtain a free credit report from the major credit bureaus to assess your financial standing. If your credit score needs improvement, strategies like paying bills on time and reducing existing debt can be helpful. For private loans, a co-signer with good credit can increase your chances of approval and potentially help you secure a lower interest rate, as they share equal responsibility for the loan’s repayment.

Engaging with your medical school’s financial aid office early is highly recommended. These offices provide guidance on school-specific financial aid forms, institutional loan programs, and available scholarships. They can help you navigate financing complexities and ensure necessary documentation is organized before formal application.

The Loan Application and Disbursement Process

Once preparatory steps are complete, proceed with the formal application and disbursement of your medical school loans. For federal loans, after FAFSA submission and the school’s financial aid offer, accept the loans through your school’s portal. This often involves completing a Master Promissory Note (MPN), a legal document promising repayment. You will also need to complete Entrance Counseling, an online session explaining federal loan terms.

The process for private loans differs, as you apply directly through the lender’s website or portal. This usually involves an online application, providing required documentation, and undergoing a credit check, which may include a co-signer’s approval. After approval, the lender typically sends a certification request to your medical school to confirm enrollment and cost of attendance. The timeline for approval or denial varies, but lenders and schools will notify you of the decision.

Loan funds are generally disbursed directly to your medical school, often in multiple installments over the academic year, such as once per semester. The school first applies funds to cover tuition and fees. Any remaining balance is then released to you for living expenses. Before graduating or dropping below half-time enrollment, you must complete Exit Counseling, which provides information on repayment obligations, plans, and debt management strategies.