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Ep 009 – The Best Way To Refinance Student Loans

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  1. Refinancing: A Hot Button Issue [0:03:08]

  2. Early Financial Services Firms [0:05:28]

  3. Being Comfortable In Your Refinancing Decisions [0:08:35]

  4. Current Refinance Rates: Fixed Versus Variable [0:15:14]

  5. How To Refinance Student Loans [0:17:25]

  6. Getting A Loan Will Not Cost You Anything [0:24:29]

  7. Different Tiers of Saving (Buckets) the Ramit Sethi Way [0:28:44]

  8. What Are Stable Coins? [0:30:25]

  9. Final Thoughts on Refinancing [0:36:53]

Welcome to the Financial MD Show. This is the only podcast designed specifically for residents and young physicians to help you become educated on financial planning for physicians and avoid many of the common financial mistakes doctors make. Your hosts, Jon and Trevor, explore a different topic with each episode. Jon Solitro is a financial planner and certified financial education instructor. He’s been working with young physicians for the better part of the decade and lectures to graduate medical programs around the country. Dr. Trevor Smith is a board certified ophthalmologist with a full time practice and he has learned the ins and outs first-hand what it takes to make smart financial decisions as a young physician. And now, here’s your hosts, Jon and Trevor.

Jon: You know, you’d think it doesn’t need to be long but probably like most of our topics, it will get longer than we think it will but I think we’ll be done by 9.

Trevor: All right, that sounds good.

Refinancing: A Hot Button Issue [0:03:08]

Jon: I’ll just try to keep track of the time but you know how it goes. We’ll just shoot to share about refinancing and see what type of rabbit trail that takes us and I think we’ll come out with some valuable info especially because this definitely is the hot button issue for residents, young attendings, as they’re getting to the point where they’re realizing they’re going to have to start paying the government 6.8 percent on a full payment and it’s such a good time to refinance. I think we’ll have plenty to cover. I have this conversation all the time – multiple times a week – with clients as they’re telling me, “How do I refinance? Should I refinance?” I mean they’re talking about it in questions and lectures or we’re talking about it with individual planning conversations, but as with many of our topics, Trevor, you can add some wisdom and experiences and I can certainly add experiences from this end seeing many, many residents go through the process and what I think are kind of the quick bullet points. This is one of the topics where we’re going to have some actionable take-home giveaway things so if you’re listening to this episode –which, if you heard that sentence, then I guess you’re listening to this episode – there will be a giveaway. We’ve created a refinancing recipe which is kind of just a brochure – a quick 2-page how-to – on how to refinance your student loans, because it’s not complicated, and so we break it down to something that you can really follow step by step and make sure you’re doing the proper steps and not forgetting any ingredients and you come out with a really nice recipe at the end. We’ll talk about that at the end, but I love how this has become a hot topic in the last 5 years because you and I were talking about Link Capital back in the day, right? Was that the first company that you looked at?

Early Financial Services Firms [0:05:28]

Trevor: Yeah. I’m trying to remember how I came across them actually. I was looking at the traditional as I think we had talked about this not too long ago, but I looked at the limited number. There were three main ones that I learned about on White Coat Investor and it was like Common Bond – how do you say this one, Darien Rowayton Bank.

Jon: Yeah, DRB.

Trevor: DRB. I think SoFi was just coming on in the scene and there was one other one – I think Common Bond, maybe.

Jon: I always get the impression SoFi was kind of the original, but maybe not. They just had the most dollars and were really pushing the hardest.

Trevor: They were late. They were fourth as far as I could tell. Those top three were the established ones that had been written about I think on White Coat and I remember one of them was doing medical and dental and just dipping their toes into lawyer because like it was still early enough that like I talked to people actually when I was evaluating them. This was in 2014-2015. There’s a few banks early on that were getting into it and then I remember SoFi came on the scene maybe within a year or so. I don’t think I refied mine in 2014-2015. I think I waited another year. Link Capital was kind of a startup and I heard about it somehow through somebody and then found out there were some connections to my undergrad at Hope College and so I just pursued that. I thought it was interesting and talked with them and just thought it was cool. They’re kind of startup and had the same guarantees, read the fine print. SoFi came on the scene just before that and then there was a huge glam on of a bunch of different banks like trying to beat it, but SoFi had a great situation where they give you this nice dollar amount like 300 or 500.

Jon: Do you think they were the first to do that?

Trevor: Yeah, I think they gave you more and then the real benefit was that they had this hard number of 100 dollars a month is all you had to pay. I don’t know if they pulled in a lot of people on that but that was the thing that seemed different to me. I don’t remember them having that same dollar amount deferral level from some of the other banks. I think you were starting to pay but you were able to save a lot so it made harder for residents. Then SoFi came in, probably was pulling a lot of business from them – I’m guessing – and then these banks probably just had to compete, right, so then they had to make it easier for residents. I mean some of these companies now you can get – I think one of them is up to like 700 for just refinancing your loan.

Jon: Just for rebate at the beginning.

Being Comfortable In Your Refinancing Decisions [0:08:35]

Trevor: Yeah. This is one of those that I put in the category – I’m not a financial advisor so I can’t advise people to do it but I can tell you from my experience in retrospect after I read the articles and felt comfortable, you want to feel comfortable about making your decisions but you also want to balance that with like not having analysis paralysis. You don’t want to just like try to figure something out for so long you never do it, but this is one of those no-brainers, in retrospect for me. I refinanced a loan that wasn’t that big. I want to say it was like 50,000 because I have multiple student loans and this was one of the few, unfortunately, that had eligibility so I had refied it, and I think just off that smaller loan – most people have 150 to 250 – I saved 10,000 dollars. Ten thousand dollars over the life of the loan – so going from almost 8 percent or 6.8, I think it was, maybe, or 7.8 – 6.8 down to 4.

Jon: Yes, 6.8 was the average.

Trevor: Yeah, I do put it in the no-brainer category along with disability insurance.

Jon: I’ve heard you say that about disability insurance.

Trevor: For physicians. It’s just like one of those products like you can’t believe that it exists. It’s like too good to be true. In some ways, I hesitated on disability because it did seem too good to be true and then you read about it and you’re like, no, okay, this makes sense. Tons of people paying in and some people get sick and that pays them out. But, yeah, so I’m a big fan of refinancing if it make sense for you and then you’re the expert on whether it’s the right decision for the individual. I mean as a financial advisor and it definitely does depend on the situation. But for me going into private practice almost certainly or owning my own practice in ophthalmology, I knew that I wanted to either go straight into the missionary field and do some stuff internationally for a while where I could get support for that no matter what, or I wanted to go into private practice. I just didn’t think academics was in the future. For me, I wasn’t going to be working for a non-profit where I could be eligible for loan forgiveness. That allowed me to be a little more aggressive in paying off early and making some extra payments in residency that just kind of knocks it down in chunks that can’t grow – that big pile can grow really fast. That’s kind of my thoughts overall on it and it does matter, though. I mean, if you’re going to be eligible for loan forgiveness, you do want to look into that, but like I said, analysis paralysis. Talk to somebody who knows, read some articles on White Coat. I think it’s confusing enough. This is a topic where I would say it’s hard to figure out for yourself which one’s smarter. You kind of need to pay somebody a little bit of money – a financial advisor – like you. You charge 50 bucks a month, right, for residents?

Jon: As of this recording, subject to change.

Trevor: I mean I think that’s a no-brainer to look at that and set yourself up. I’m sure I’ve said that before but you can make up for that by deciding whether you refinance or not, and if you choose refinance, instant return on your money for that. I mean, imagine if somebody takes your services and refies and gets 700 dollars and saves 20,000 to 40,000 dollars over the course of their loan over 10 years. I mean for 50 bucks a month, that’s pretty good.

Jon: You’re right, exactly. Real quickly, the break-even point comes real quick. That’s a lot of where the conversation starts with the residents and the young attendings that I’m working with. The main thing I want to talk about is these student loans and that’s been the same question ever since I’ve been in the industry and it has shifted to include refinancing back in the day 6-7 years ago when I started. It was, mainly, helped me with the student loans, whether that was refinancing or figuring out if PSLF was going to be a thing that had just started kind of coming around or just how do I pay these off properly, in the world where there was no private options because today’s interest rates make private loan refinancing a no-brainer, for sure.

Trevor: That’s a good one too.

Jon: Yeah, back when you could refinance for 5.5, it was like go from 6.8 to 5.5, that’s nice but that means I’m out of Public Service Loan Forgiveness eligibility. Is it worth it, this and that – so you better be sure you’re not going to be eligible for Public Service Loan Forgiveness at that rate. Over the last 10 years, the rates have dropped to where it’s absolutely a no-brainer because the federal rates haven’t really dropped. I think they have a little bit if you’re starting out right now in medical school but the residents that we talked to, they’re still around 6 or 6.8 percent. I just had a resident I was talking to today while she is in practice now but she’s refinancing. She’s got about 380,000 and she’s in Family Medicine and she could be eligible for Public Service Loan Forgiveness probably, but she has decided to go the private loan or private refinancing route because of a couple of reasons. That’s a lot to bank on and hope it works out in her mind and I think people have a hard time trusting the government and you know that they’re going to come through in their promises and just all that stuff so she decided to go private refinancing and she looked at Laurel Road, Earnest, and SoFi – and we’ll have links for these in the show notes – but incredible was the website that she went to to look at several different lenders at once so that helped and that’s what recommended SoFi.

Current Refinance Rates: Fixed Versus Variable [0:15:14]

I don’t think we ended up going with SoFi. She’s going to do one of the other ones; the rates were just simply better. She was looking at a 20-year which was 4.05 and a 15-year was 3.85, and then a 10-year was down to 3.4 or 3.5. Then we talked about, okay, here’s your different options, and these are for fixed. You can probably get lower on the variable but I don’t recommend the variable especially on these, and I don’t mind saying that to pretty much anybody and everybody that’s the case. Fixed because rates can’t go much lower. They’re only going to go higher over the course of their loan so the variable rate, you’re pretty much guaranteeing that thing is going to go higher.

Trevor: Right, yeah, because there’s two times right.

Jon: Yeah, before too long, it’s going to surpass what the fixed rate is you would have gotten so I just say, “You know what, just take the fixed rate. Sure it’s a few points higher but worth it.” I think she ended up setting on a 15, maybe a 20, because she had some other financial obligations that we had to also prioritize but typically, I find my attendings are getting a 10-year rate, probably 90 percent of the time, and then usually they’re making about a payment to be paid off in 7 years and so that’s typically what I find with the average physician. I know incomes are all over the board, but typically, we find we’re able to do that, still put money towards financial planning goals, retirement, kids’ college – all that kind of stuff – buy a house, have a decent lifestyle – 10 years seems to be pretty doable. I hope that continues to be the case as tuition and college costs are rising, but so far at this point it is.

How To Refinance Student Loans [0:17:25]

When we’re looking at that, the first question you have to ask yourself is, “Do I want to plan on Public Service Loan Forgiveness?” If yes, then refinancing is off the table. If no, then we can look at the refinancing and we know almost beyond the shadow of doubt, if your credit’s decent and most lenders are looking at least 700, maybe 720 is what they want to see – typically 700 is the minimum that you got to have to look at refinancing – but if you got good credit, you have an employment contract in hand, sometimes even before that, you’re going to get rates that are for sure going to be in the 3.5 to 4.5 percent range. If you know you’re not going to do PSLF – and we’ve talked about this enough before, you can Google this if you need to find out more details – but you know you’re not going to do PSLF which means you’re not working for a non-profit or you don’t trust the government or any of those things, then you can start shopping around for your refinancing and the great thing about refinancing is all the companies that we’ve seen when you go to get your quote, they do a soft credit pull. It shouldn’t affect your credit score – just to check – and that means you can easily get 2, 3, or 4 different quotes so you know you’re making educated decision. We typically tell our physicians to get at least 3 refinancing quotes. We can do it all in one afternoon, probably all within an hour. It doesn’t affect your credit score and you’re only going to be better off by knowing 3 different options. And then we sit down, we have a conversation. We say, okay, because it will show you, here’s the 5-year, the 7-year, the 10-year, the 15, the 20, and each one has a different interest rate and a different payment. The shorter the term, the lower your interest rate’s going to be. It’s going to be more advantageous to get a shorter term, but you might not be able to afford that kind of payment either. So it’s finding that sweet spot, and honestly, that’s a budget conversation then because it’s like, okay, sure, we’d love to have this paid off in 5 years at a lower interest rate but that’s 8,000 dollars a month. You can’t afford that. Like I said, typically, we end up settling on a 10-year and putting a 7-year schedule on it. I love having that conversation because these rates are so good. People don’t know how good it is when you think about just the history of interest rates. That’s kind of my quick and dirty on how to refinance student loans.

Trevor: Yeah, and for the people who haven’t even looked at this at all, they just went through med school, did a great job, graduated AOA, and they’re like the smartest person in the class, but they just focused on med school. I mean there are two different types of loans in financing. Like you said, one is fixed and one is variable rate. Fixed means that it’s just the same rate. It’s like the loan you get from the government stays the same forever until you pay it all off. Variable, a bank will loan you the money at a lower rate but they reserve the right to continue to lower the rate if general interest rates go down or they can raise the rate over time. If it’s already at a low rate which is why Jon was saying it’s low now, why would you lock in a fixed unchanging for the length of the loan. You can lock in a fixed rate when it’s low and the variable rates are already low – pretty much rock bottom. They could go a little lower but it wouldn’t matter. If you go from 2 percent to 1 percent doesn’t really make a big difference, but if it goes from 3 percent and then the variable rate goes up to 5, 6, or 7 percent, it makes a huge difference. That was the logic there on that. Nobody, I guess, unless you take a private loan – I don’t think even private loans when you go to school. People can’t take out variable rates, can they?

Jon: I know they can take out private loans.

Trevor: But I wonder if those are allowed to be variable. I actually don’t know the answer to that. I don’t think so, but I don’t know for sure.

Jon: Maybe not. I’ve seen high rates which seems like those must have been variable at some point to get this high, but yeah, maybe not, because we were seeing sometimes loans from SunTrust Bank or something back in the day that were 8, 9, 10 percent on student loans but those could have been definitely been fixed. Once you pick which lender you want to go with and which term, or which option they call it, let’s say, you choose the 10-year with a 2800 dollar a month payment and this and that, then you kind of go through the full application process, and if everything goes well, I think it typically takes 2 to 6 weeks. They basically pay off your federal loan and then now you owe them that same amount whether it’s SoFi or Common Bond or Earnest or Laurel Road or whatever. There’s so many out there and I’m also going to try to put a link in the show notes. It’s going to be either through the White Coat Investor or different credible or something like that. They’ll have a list of the top 10 or top 20 student loan refinancing companies. There seemed to be more that pop up every now and then.

Trevor: NerdWallet can be decent too for comparing.

Jon: NerdWallet is a good one. Bankrate is a good website for looking at student loans but those are the kind of websites where you’ll find mortgage rates and savings account rates and credit card rankings and stuff like that. I still use that for a lot of our stuffs. When I have credit card conversations with clients, that’s where I typically send them, this NerdWallet or Bankrate to say, hey; or savings accounts. If we want to try to eke out some kind of interest near 1 percent, we might go to try to find some high-yield online bank savings account through NerdWallet or Bankrate or something. That’s a place to go, and the other thing people ask, you can refinance as many times as you want typically.

Trevor: Yeah, I’ve done that. I’ve done two. I did Link Capital and then SoFi.

Jon: Right.

Trevor: Yup, and I got paid on both of them.

Jon: Yeah, and it didn’t cost you anything.

Trevor: So that’s cool. They didn’t cost me anything. That’s the other thing. I don’t think we think said this. I was like, “Oh, will there be a closing cost?” Like buying a house.

Jon: Yeah, for sure you’d think so.

Getting A Loan Will Not Cost You Anything [0:24:29]

Trevor: I knew just from my parents buying a house that there were cost money to get a loan. I was like, “Oh, it’s going to cost money.” It doesn’t cost anything. The other thing is like you and I, other than that referral fee or bonus, when you click a ref link from somebody, usually they’re getting paid a little something like 2 or 3 dollars. It’s usually about the same for these loans, but there’s no commission. It’s not like you make money off of them refinancing. It’s just like a win – it’s not a win-win. It’s just like a win for you.

Jon: Yes.

Trevor: Yes, a single win, and it’s only you that wins.

Jon: Yup.

Trevor: Normally, you’re going for win-wins, but this is just like, “Hey, if it’s a win for you, it doesn’t matter.”

Jon: It’s okay to be selfish here, yup.

Trevor: Yeah, and that’s a cool thing. I mean it doesn’t cost you anything. Again, like I said, it seems too good to be true. It makes you wonder, “Why did the government charge me so much for this loan?” Because they can.

Jon: That is a great question. Because they can, right.

Trevor: It should make you mad.

Jon: Yeah, it does. I’m mad for my doctors because in my mind, the physicians are kind of propping up the student loan academy.

Trevor: A hundred percent. True.

Jon: They’re paying the same interest rate as these bad credit low-income Joe Schmo that is not going to make his payment, isn’t making his payment, is still at 6.8 percent because the government doesn’t check that stuff. They just feel like everything should be fair so everybody should be paying the same rate.

Trevor: Everyone should get to go to college.

Jon: Yeah, so you going to medical school for 6.8 percent is a travesty and let alone the fact, everybody should be paying less rate, I think, especially the larger borrowers – people with jobs that are more secure – and physicians have as good a job security as anybody and yet you’re still paying the same rate again as those that graduated from college and can’t find a job with a bachelor’s degree. Even over the years as interest rates have dropped, and they’re still getting 6.8 percent. That’s the part that it’s like, what the hell?

Trevor: That’s pretty messed up. I mean, I like to think about what’s the best argument like if you’re going to try to prove somebody else wrong or really discuss the topic well, the pros and cons, you try to put up the best argument for the other party.

Jon: Sure, kind of play Devil’s Advocate and think well.

Trevor: Yeah. I want to be able to articulate the argument better than them and then still defeat it. In this case, I literally can’t think of anything like what would be the reason that they can justify charging a higher percentage than the free market. It’s not cool. It’s definitely not cool and I’m sure everybody agrees so I’m sure we don’t belabor the point. It’s very weird. You’d think there’d be a justification.

Jon: No, there’s somebody in the government who will consider this and be impacted by our rant.

Trevor: Right, yeah. I’m sure there is a really gentle soul out there who just got their hand on the key and they can just turn this, no problem, change it.

Jon: It’s that easy.

Trevor: I was going to say – and you could pull this for a different podcast or whatever. It is a nice thing. People are always looking for high-yield savings accounts. You can tell because I read the Ramit Sethi book – you know I love this book, this guy – the I Will Teach You To Be Rich book. It’s got the whole how-tos and a lot of things and gave me a good framework, but he’s got a thing on automating your finances and he talks about specific banks – Ally Bank – where you get paid; automatically, it goes in your checking with direct deposit, and then monthly, the Ally Bank savings account can pull the money, and then within that account, they have different tiers of savings like buckets so like emergency fund.

Jon: Okay, like different interest rates.

Different Tiers of Saving (Buckets) the Ramit Sethi Way [0:28:44]

Trevor: No, it’s one account. It’s one savings account. It was one percent which is kind of the highest around APY so annual yield of one percent, which is still insanely low. We’re talking about our student loans way higher, but if you’re holding an emergency fund, you need some cash in case your car dies or you lose your job and you have to pay your student loans still and you want to hold some money there. This can automatically deduct a certain amount per month like if I’m saving for a house, it can throw 2,000 in the house bucket and 5,000 in the marriage bucket if saving up for a wedding, and then 15,000 in the emergency fund bucket. You don’t have to have all that money. You can distribute that evenly. You can take 2,000 dollars from your monthly check and it will automatically distribute it to whatever percentages you want for each one of those things. It’s a pretty cool tool. So you think I’m just saying, “Oh, this is the coolest thing I’ve ever found.” Feature-wise, it’s awesome, but since March – it’s January 2021 right now – since March of last year, every two months, it dropped by 0.1 percent or so. It’s like 0.6, I think, now. That’s brutal. I mean, that’s typical high-yield savings account but it’s brutal. I don’t care what anybody says. The reason I brought it up is because you know how I’m into the whole cryptocurrency kind of stuff.

Jon: Yes, I kind of knew this was going that way.

What Are Stable Coins? [0:30:25]

Trevor: You’re right. Again, not a financial advice, I’m not a financial advisor. Talk to Jon. But it is important to note that there’s a lot of disruption occurring in the finance space because of this and there’s something called stable coins which are kind of cool. Coin-based is one of the ones that’s regulated in the U.S. and you can transfer with an ACH transfer – that’s just like a bank-to-bank transfer. It takes 3 to 5 days. Everyone’s probably used one. You can transfer your money over to coin-based and they’ll kind of credit you a little bit ahead of time if you established some proof that your bank has money in it and if you’re a customer for a while. Otherwise, 3 to 5 days later, you put in, let’s say, 2,000 dollars, you transferred over and that’s to be getting your baby emergency fund or if your car dies or your basement floods or something and you can convert that over for a teeny tiny fee like a couple of dollars to a stable coin which is called the USDC. It’s a currency. It’s the U.S. dollar equivalent and it stays pegged to the U.S. dollar. So this is not like Bitcoin – the price goes up and down – which I’m still loving, not hating on the Bitcoin, but this is designed to stay on the same price.

Jon: Hence, the name stable coin.

Trevor: Stable coin, exactly, yeah. Just like a digital dollar, and the government’s maybe talking about doing some like this. China already did it or they’re testing it. It’s going to be crazy. A lot of the stuff is going happen pretty fast. Anyways, you can already do this. Coin-based, I think, is 2 percent or 4 percent return automatically just right there. You can convert it over or you keep your dollar just sitting there. They’ll give you a return on your money right there. I mean that’s like 4 times what you get on the Ally, okay. They don’t have the buckets. They don’t have that kind of savings feature and then it’s sitting right there just trying to get you to buy some Bitcoin, you know what I mean. They’re making it convenient and enticing to keep it on the network for multiple reasons for your benefit but also because if it sits there for a while and you’re watching everything else go up 20 percent every few days, you’re going to want to dive in to one of these random cryptocurrencies which certainly people always say do your own research. I can’t advice anything but they’re volatile and you can lose a lot of money so people should be careful. I do encourage people to read about Bitcoin and all the cool features and stuff it has. It’s a really disruptive technology.

Regardless, there’s a third-tier step to that where there’s companies now that will lend out stable coins and cryptocurrencies so you can take the USDC and it’s all U.S. regulated. It’s all KYC which means know your customer information so you’re saying this is my bank account. It takes your Social Security number, but there’s another company where you can transfer USDC over to them and then it just sit there. It looks like it’s your bank account just like it would at and they’ll give you a return of between 11 and 12 percent. They do that because people will buy it on leverage.

Jon: Sure. They’ll call you to do that in stocks too.

Trevor: This is where you have a stable coin. It’s just sitting there in a savings account. It never looks like it leaves but all the money that’s sitting there, they’re doing the same thing that your bank is doing, Chase, which is giving you zero percent. It’s essentially like fractional reserve banking. It can take up to a certain percentage of it safely, lend it out to people who will make money with it, and return it with interest and they share that interest with you. If you’ve ever wondered how much Chase Bank is making off of the money that’s sitting in your checking account, you can make 12 percent off of a stable coin that’s sitting in the equivalent. It’s crazy. I mean it’s like skipping the bank. It’s all digital so they can just contract digitally with hard digital assets and borrow this extra money to leverage. Anyways, it makes it hard to want to hold my entire emergency fund in 0.5 percent Ally Bank APY.

Jon: Yes, I hear you. As long as it’s liquid that’s why what’s important about in an emergency fund is you need to be able to get to it and it’s got to be stable so the value can’t be up and down every day.

Trevor: That’s the thing, yup.

Jon: Those are main pieces, so other than that, have it in whatever you want as long as it’s stable and it’s liquid.

Trevor: Yup, and I think they have a delay on withdrawals so you have a few days. You can’t just withdraw it immediately. That’s not uncommon. In ACH transfers, it’s already 3 to 5 days, so it’s not really a big deal. This isn’t instant transfer once it appears. Anyways, just a little fun thing that I learned about, maybe, 2 months ago.

Jon: Yeah, that’s interesting because that’s stuff that most people don’t know about by far.

Trevor: Yeah, it’s going to be game-changing. It’s going to be a wild world out there, and I still like Bitcoin even though it went down 25 percent today.

Jon: Oh no, it didn’t. Do you know why? Does anybody know why?

Trevor: That’s just natural market corrections; just what happens when you go crazy for 5 months straight. It’s one of the longest runs it’s ever had. Again, not a financial advisor; I’m repeating what I’ve read. It’s just typical. I mean this is what happens. It’s got a lot of volatility to it. There’s tons of indexes and stocks and things you can trade that are more volatile than it. Penny stocks, right?

Jon: Yup. Oh, for sure.

Trevor: But this is a global financial infrastructure. I’d rather own that than the penny stock.

Jon: Yeah, penny stock can go to zero.

Trevor: Yeah.

Jon: Cool, all right.

Trevor: We lost topic.

Final Thoughts on Refinancing [0:36:53]

Jon: Yeah, that’s right; still interesting though. That’s the Financial MD Show. Any final thoughts on refinancing or anything? Is anything else for that matter?

Trevor: Final thoughts – for me, it was a realization that I had to find a reason not to refinance given that I wasn’t doing Public Service Loan Forgiveness. I was just like, okay, this is how it works. It’s safe. No one’s making a killing on me. No one’s ripping me off. It was my first step into the financial world and I had to make sure that I wasn’t doing something stupid. And once I realized I wasn’t doing something dumb, I was doing a consensus decision that people make along the way. I mean lowering how much I was going to pay in interests. I already bought the school that I went through. Why would I want to pay more for it? They were going to let me pay less so I want to pay less. That’s what I chose to do.

Jon: Yeah, I think that goes along with the age-old Dr. Smith advice that we always like to refer back to of make easily reversible decisions or something like that or what would you say?

Trevor: Yes, although this is not a reversible decision.

Jon: It’s not reversible, no, but it’s something that could be refinanced again. You’re not locked into it.

Trevor: That’s true.

Jon: Think it through and think, okay, what are the downsides, and if you’re okay with the downsides, then you move forward. That’s kind of how we approach it – whenever we’re making decision, think through what’s the worst case scenario, and if you feel like, yeah, I could stomach that or I think it still makes it worth it, then that’s it.

All right, I think that’s enough info on refinancing. It was kind of the main things that you need to know. We will include in the show notes for everyone listening to this a lot of the links that we talked about from the books and some other websites and things, but also, the ability to download the refinancing recipe from Financial MD. So head there in or look in our show notes on whatever device you’re listening to here; that will take you there. Be sure to visit the website for updated blog posts and info on what we’re talking about today. We keep a list of refinancing lenders. We like to keep you pointed to the right direction and then we’ve always got the conversation going on the Financial MD community – a Facebook group. Be sure you’re there. This is Jon Solitro, Dr. Trevor Smith, with the Financial MD Show. Thanks guys for listening.

Trevor: Thanks Jon.

Thanks for joining us for another Financial MD Show. Be sure to head over to to get more in-depth resources on financial tips for physicians and don’t forget to join the Financial MD community group on Facebook, where physicians at all stages of their career gather to share tips and get ideas on achieving true financial success. We’ll see you next time.

The Financial MD Show is for informational purposes only and is not an offer to invest. It is not financial, tax, or legal advice. Be sure to seek financial, legal, or tax professionals when making any financial decisions. Before investing, you should make sure that any investment strategy or investment meets your individual investment needs, goals, and objectives. Financial MD makes no claims or guarantees to individual investment performance. All investing involves the risk of loss as well as the potential for gain.

Resources and Links:

  1. White Coat Investor website –

  2. Link Capital Partners –

  3. Darien Rowayton Bank –

  4. SunTrust Bank: Personal, Mortgage, And Small Business –

  5. NerdWallet: Make All The Right Money Moves –

  6. Bankrate: Guiding You Through Life’s Financial Journey –

  7. I Will Teach You To Be Rich by Ramit Sethi –

  8. Financial MD website –

  9. Financial MD Facebook community –

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