4 Best Lenders to Refinance Vet School Loans of December 2024

Debt-to-income ratio for refinancing vet school loans

Student loan refinance lenders consider many factors when evaluating applicants, including their credit scores, financial history and debt-to-income ratio. Meeting a lender’s DTI requirements may be the biggest hurdle for some veterinarians — the average vet school debt is $185,486, yet veterinarian salaries start at an average of $124,295.

Refi lenders determine DTI by comparing your gross monthly income to your monthly debt obligations. Here’s how this would work for a veterinarian who owes $185,486 and earns $124,295:

• Her monthly loan payments would be about $2,358 on a standard, 10-year repayment plan, assuming current federal student loan interest rates.

• Her gross monthly income would be $10,358.

• Her DTI would be about 23% ($2,358/10,358) — but that’s for student loan payments alone. Including rent, utilities and other obligations could easily push that number much closer to 50%.

» MORE: Calculate your debt-to-income ratio

If you want to refinance veterinary school loans but can’t because of your DTI, finding someone to co-sign your loan could help. If you go this route, look for a refinance lender that offers a co-signer release program — not all do.

If your DTI is manageable, compare all refi options to ensure you get the best rate possible.

Should you refinance vet school loans?

With veterinary school costs typically exceeding $200,000, the majority of students take on debt for their doctor of veterinary medicine degree. The type of loans you borrowed to pay for vet school and your employer will play a big part in whether it makes sense to refinance.

• If you have private student loans: There’s little downside to refinancing private vet school loans if you can qualify for a lower interest rate.

• If you have federal student loans: Government options are the best student loans for vet school because of their repayment flexibility and protections. By refinancing, you give up access to options such as Public Service Loan Forgiveness and income-driven repayment.

• If you work for an eligible nonprofit or government agency: Don’t refinance federal student loans if you will qualify for tax-free Public Service Loan Forgiveness. Most animal hospitals are privately owned, so this may not be a concern for many veterinarians.

Which option saves you more money?

The most important federal benefit for vets will likely be income-driven repayment, which can greatly reduce monthly payments depending on how much money you earn. These plans also forgive your remaining debt after 20 or 25 years of eligible payments, but that amount is taxed.

» MORE: How to pay off vet school loans

Vets aiming for income-driven forgiveness should compare how much they’d repay overall — including taxes — to how much refinancing would cost. Let’s again consider our example veterinarian who owes $185,486 and makes $124,295:

• By choosing income-driven repayment. The Department of Education’s Loan Simulator provides various estimated repayment plan options, after entering information like your salary, student loan debt and tax filing status. Here are a few possible scenarios:

  • Extended Graduated Repayment Plan: Here, where payments gradually increase every two years, you may have an overall payment of $501,504 after 25 years.

  • Standard Repayment Plan: You could repay a total of $282,924 over 10 years.

  • The SAVE Plan: You’d have an estimated total repayment of $339,190, with $177,951 forgiven. At a tax rate of 24%, you would likely end up repaying a total of roughly $381,898.

• By refinancing vet school loans. If our veterinarian qualified for an interest rate of 6% and chose a 20-year term — typically the longest refinance lenders offer — she would repay about $318,931 overall. While that amount is less than the Extended Graduated Repayment and SAVE plans, it is about $36,000 more than the Standard Repayment Plan.

Refinancing may not make sense for this veterinarian, but your numbers will depend on your personal situation. For example, you may face a larger bill if you earn too much money to qualify for Pay As You Earn or PAYE.

Use the Repayment Calculator and a student loan refinance calculator to determine your savings.

STUDENT LOAN REFINANCE RATINGS METHODOLOGY

Our survey of more than 26 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and the top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.

We consider 41 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.