Recently I was surprised to hear a premed tell me that he has no credit cards and no credit history even though he will be applying for medical school student loans soon. He had not every really thought about credit history, credit score, and credit cards until his rental application for a new apartment was rejected due to his lack of credit history.
And there’s another big problem coming for premeds without good a credit history: You’re not going to be eligible for the best student loans for medical school unless you have a strong credit history.
You Need Good Credit to Get the Best Medical School Student Loans
For premeds, the most important benefit that good credit gives you is eligibility for the best medical school student loans.
80% of all medical school students graduate with some debt, and the average debt load is $160,000. You’re going to need loans to pay for med school, and you’re going to want the very best loans you can get (More info on how to pay for medical school, and widely used medical school loans). That means you absolutely need good credit, and the sooner you start the better.
Good credit history = low interest rate for medical school loans
= faster payoff = cheaper medical school
You can’t predict which loans you’ll be offered by medical schools and private lenders, and you’re not guaranteed a scholarship, but if you have strong credit you can be assured that you’ll get the very best loans possible — loans with a low interest rate. With a low interest rate loan, you can pay off your medical school debt much faster.
Without a strong credit history the loans you receive will be for smaller amounts and at a higher interest rate. You’ll have to manage more payments to more organizations for larger amounts. The medical school student with better credit will get larger loans at lower interest rates, which lowers the overall cost of medical school and simplifies the loan repayment process.
If eligibility for medical school loans is the only reason you take on a credit card, you’re still making a very smart move.
Continue Reading … The Best Way to Build Your Credit as a Premed