Recently, a friend of mine from Touro University- CA who’s now a practicing pharmacist refinanced her student loans with First Republic Bank (FRB) to a 15 year fixed 3.5% interest rate loan (she refinanced before the feds adjusted the prime rate up by 0.25%; the current 15 year fixed is 3.75%.)
She is happy that not only her FRB interest rate ½ of what she was paying before refinancing her federal student loans, but also the long 15 year term allows her to reserve more cash flow (than a shorter term loan) for retirement savings and down payment for buying a home in California.
I am happy to see that there’s finally a break for the medical professionals, especially those living in high cost of living areas such as many cities in California.
So I reached out to FRB, after several weeks, I heard back from Kerry Berchtold, Relationship Manager at First Republic Bank.
Here you will learn more about what FRB offers and what FRB is looking for. And of course, there’s a DWM reader deal for you. If you email me at email@example.com and I refer you personally, you will get a $200 towards in your FRB account (which you will open in order to refinance your loans) and DWM will get a referral bonus too.
First Republic Current Rates (March 2016):
- 5 Year Fixed: 1.95%
- 7 Year Fixed: 2.65%
- 10 Year Fixed: 2.95%
- 15 Year Fixed: 3.75%
First Republic is offering a 5 year fixed rate that is 1.55% lower* than its competitors lowest rates in their published interest rate ranges.
Just by paying 0.25% more with FRB, you get much better cash flow on a 15 year term rather vs. the 5 year term offered by most competitors.
*The lowest 5 year fixed rate with CommonBond, DRB, Creidble, or Sofi right now is 3.5%.
If you qualify to refinance your student loans with FRB, you get the ONE published rate and term, not an interest rate somewhere in the range of rates offered by all other refinancing banks. What you see is what you get.
For example, my friend with 800+ FICO score refinanced with DRB and got 5.65% interest rate (which initially surprised me as it was at the high end of the advertised range of interest rates for 10 year fixed loan). DRB explained that he didn’t get the low end of the range because his debt/income ratio was high, which is true of most typical PGY’s with 200k+ debt and 50-75k income.
While DRB was the best option for him as a PGY4 (he would not have qualified with FRB due to geographic requirement and debt-to-income ratio requirements by FRB), I definitely encourage him to refinance again, especially to check out First Republic when he becomes an attending.
#1: It all hinges on debt-to-income ratio, which differ by individual circumstances. In general, attending physicians can qualify; tougher for PGY’s to qualify but never hurts to find out.
#2: You have to live or work in locations FRB have banking branches, which include:
- California, specifically San Francisco, Palo Alto, Newport Beach, Palm Desert, Los Angeles, San Diego, and Santa Barbara
- New York, NY
- Boston, MA
- Portland, OR
- Palm Beach, FL
- Greenwich, CT
I asked Kerry, “What defines living in these areas?”
Kerry answered: “We don’t ask for proof of where they live, however they will need to show us paystubs, bank statements and a driver’s license; and if the address they gave us doesn’t match those documents, it would be a red flag.”
#3: You Forego Potential Forgiveness such as PSLF like refinancing with other private banks.
This loan is a personal, unsecured loan with all that entails. It doesn’t go away if you die (and will be assessed against your estate.) It goes away in bankruptcy. There are no provisions made for unemployment, underemployment, death, or disability. So be sure you have enough life and disability insurance to cover the amount borrowed.
#4: $60k-$300k Range: FRB won’t refinance loan amounts lower or higher than this range. If you have 300k+ in student loans, refinance 300k with them to get the lowest rate/best term, and then refinance the excess portion with another bank. If you have less than 60k in student loans, you are in pretty good shape. You can still refinance with other banks like DRB, common bond, Linkcapital, Earnest, etc.
#5: You must bank with FRB.
Specifically, you deposit your main source of income there and auto debiting the loan payments out of it. You get a personalized, dedicated banker and reimbursement of your ATM fees, but there are $25 monthly fees if you don’t keep $3,500 in the account. If you can save 5% on your 200k student loan for 5 years, that’s $50,000 in your pocket for switching to First Republic Bank. If this were available to me before I paid off my student loan, I’d do it in a heartbeat!
The DWM (Dr. Wise Money) deal:
Email me at firstname.lastname@example.org. I will personally refer you to First Republic Bank. When your loan closes, you will get a $200 bonus deposited into your First Republic checking account and DWM will get the same for referring you.
This promotional referral bonus may expire, and rates are subject to change, so act now.
“Luck is preparation meets opportunity.” I have presented the opportunity to you; do a little paper work and start saving 10’s of 1000’s over the life of your refinanced student loan.
You deserve to get a low-interest-rate funded education, the rest of the world has either free or cheap medical education.
Other options of refinancing student loan with DWM deals: