Splash Financial - Making a Splash in Medical School Debt

 
 

It's been some time since I last wrote about student loan refinancing. One reason is there hasn't been a lot of changes in student loan management strategies. The threats to PSLF by the Trump administration has yet to materialize so I continue to recommend to all medical graduates to strongly consider PSLF to help repay their student debt. Another reason is there hasn't been a lot of changes to the student loan refinancing industry. Many of the names are entrenched - SoFi, CommonBond, Earnest etc. and only one (Laurel Road) specifically targeted medical student loans. Today I want to introduce a newcomer to the medical student loan refi industry - Splash Financial.

Who is Splash Financial?

Originally conceived as a college savings platform named "LendULink", the Cleveland based startup struggled to gain traction. in 2015 the company pivoted to focus on medical student debt refinancing and Splash Financial was born. Splash Financial officially launched to the public in April of 2017 and is, to my knowledge, the newest player in the student loan refi space.

The Proposal

The financial hardship facing majority of medical residents is easy to summarize: large student debt burden (median of $192,000 as of this writing) and a meager PGY income (median PGY-1 stipend of $54,600) can combine to cause a lot of financial headaches. The proliferation of Income Driven Repayment (IDR) plans has offered significant relief to our fellow medical trainees in recent years, but what if the required payment (10-15% of your monthly disposable income) under IBR, PAYE or REPAYE is really squeezing your monthly budget? Here is where Splash has to offer:

  • Refinance your student debt to a fixed 10-year term with a fixed interest rate.
  • Pay $1/month during residency and fellowship (Up to 7 years).

Important details

  • Your 10-year repayment period starts following your residency & fellowship training.
  • The fixed interest rate as of this writing ranges from 5.29-5.44% including a 0.25% autopay discount. 
  • If you choose to pay $1/month, your loans will continue to accrue interest and that interest will be capitalized (added to your principal) at the end of each month.
  • The maximum amount of time you can pay $1/month is 84 months (7 years).
  • To qualify, you must be currently in or have completed a medical residency and/or fellowship.
  • The maximum loan amount is $346,000 and the minimum loan amount is $25,001.

Cons

  1. Although Splash Financial's website is quite modern, their online application is managed by another company CampusDoor - whose UI is decidedly stuck in the 2000s. See application walkthrough below. It gets the job done, but is in desperate need of a redesign.
  2. If you choose to make $1/month payments, your unpaid interest gets capitalized at the end of each month. This can increase your loan balance over the course of residency/fellowship. In comparison, federal student loan interest only capitalize in 6 specific triggering circumstances.
  3. Refinancing your federal student loans through any third party lender will lead to the loss of certain benefits such as income driven repayment and PSLF. Splash is no different here.

PROS

  1. Reasonable interest rates - for example, Laurel Road's current 10 year fixed rates range 5.05-6.75%.
  2. Simple product offering - single refinance option takes away the complexity of analyzing and comparing different repayment terms.
  3. $1/month payment - the biggest attraction of Splash Financial over other student loan refinancers. This dramatically increases your cash-on-hand during the "lean years" of residency and fellowship.
  4. No origination fees or prepayment penalty.
  5. While Splash may be a fintech startup, your refinance loans are originated and funded by Bank of Lake Mills - a Wisconsin based community bank who is a member of FDIC.

Splash Financial Application Walkthrough


Bottom Line

Splash Financial may be the newest kid on the block, but they are ready to make a splash (see what I did there?) in the medical education debt ReFi space. While all student loan refinancers should pay attention, Laurel Road in particular should be on notice. Splash's $1/month offer represents an attraction alternative to their $100/month resident & fellow student debt refinancing option.  As usual, before you decide to refinance your student debt, I encourage you to read my previous post - To Be, or Not to Be...Consolidated/Refinanced...On Your Student Loans... If you decide that refinancing is the way to go, I encourage you to visit the Future Proof ReFi Central to compare the best offers among FPMD partner lenders.


FPMD Readers -  apply for your Splash Financial ReFi loan thru this link and receive a bonus upon loan closing.  

  • Refinance over $200,000 and receive $1,000.
  • Refinance over $100,000 and receive $500.
  • Refinance less than $100,000 and receive $250.

Full Disclosure: Future Proof, MD is an affiliate of Splash Financial which means if you apply through the link provided above, FPMD may receive a referral fee payment.  For details on FPMD's advertising policy see Advertising Disclosures.


Future Proof, MD

Dr. Bo Liu is an aspiring radiologist-in-training and the founder and editor of the White Coat Money Blog.  He has an interest in interventional radiology and helping his medical colleagues get ahead in this mad world of medicine and money.  When he's not crushing the list at the PACS station or typing up your next favorite blog post, you can usually find him at the local badminton club, movie theater or the most recently opened restaurant.