Minimize and delay borrowing student loans as much as possible

Goes without saying, the more you delay the onset of loan origination and associated fees, the more you delay interest ballooning. Time value of money is against as when someone else’s collecting the interest from us.

Starting in 2012,  feds got rid of subsidized loans for medical students. Which meant the moment your loan’s disbursed, it starts snowballing at 5.4% or more, depending on how much you had borrowed that year. Some interest rates were as high as 9-11%. That I call predatory lending…

What You Should Do to Minimize Student Loan Interest

I paid my tuition and living expenses with a credit card, usually one I had just opened and had a 0% deal on for 12-18 months. Since my tuition was $15,000-17,000 per quarter, and the cost of living was pretty high, I regularly charged up a large balance on the credit card.

I made the cash back rewards from large purchases, rode the balance interest free for 1.5 years, then requested student loan to pay the credit card balance off before the 20% credit card interest rate hits after the promotional period of 0% interest ends.

So I didn’t pay a dime in credit card transaction fees or interest, avoided student loan interest and origination fees for 18 months, made extra cash from the promotion/cash back bonus, AND built an incredible credit history. 

Following this recipe, I saved ~$27K in student loan interest during medical school, and made an extra ~$10K+ in cash back rewards.

For more details on how I pulled this off as a full time medical student/ mom with 2 jobs, see my guest post on WCI titled “hitting a net worth of zero as an intern.”

#1 Financial rule I lived by in med school

7 thoughts on “#1 Financial rule I lived by in med school

  • March 20, 2015 at 8:52 am
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    Wow, superb blog layout! How long have you ever been running a blog for? you made blogging glance easy. The overall glance of your website is fantastic, as well as the content material!

    Reply
  • March 13, 2015 at 7:46 pm
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    Came across your post on Aunt Minnie. In residency now and I really wish I had this info back when I a medical student! Will definitely keep following your blog, good luck!

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    • March 14, 2015 at 5:28 am
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      Thanks for your kind words, beamer128! it’ll be a beautiful day when people like us, who start our “real” job in our 30’s don’t have large debt on our backs… My biggest wish for this website is to free people from stifling debt burden so that they can be even more focused and dedicated to their profession, community, and family. please help spread the word and feel free to ask me any question. If i don’t have the answer, we can find it together! I can also defer to my mentor (WCI)’s wisdom 🙂
      Another note, do you know what would be the ideal place on aunt minnie to publicize this website?

      Reply
      • March 14, 2015 at 8:35 am
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        I think folks will see it where you posted it, the forums unfortunately aren’t very active anymore . I’d consider posting on Student Doctor Network as well to reach more people who could benefit from your advice.

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        • March 14, 2015 at 1:10 pm
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          That’s an awesome idea, thanks beamer128!

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  • March 11, 2015 at 1:09 am
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    Such amazing advice, I wished I had found this site earlier!

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    • March 13, 2015 at 1:08 am
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      Hey Tdoc,
      Thanks so much for visiting the site 🙂 It’s never too late. Think if we delay our debt reduction and wealth building till AFTER residency!
      That’d be pretty bad compared to starting now. I’ve started writing posts on how to grow positive net worth during our long residency (many of us now a day are going sub-specialty, leading to at least 4 years of training after med school graduation). 4 years can either do a lot good or a lot of damage, especially if one chooses to ignore the unrelenting compounding of student debt at high interest…
      Let me know if there’s anything in particular that can be helpful to you (check the post to come section or propose a post topic for me to address), I’ll do my best to write your request within the next couple posts!

      Reply

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