Refinance vs enter REPAYE - unique situation

[RomeoENT]

Hello all - please some help for finding the correct financial solution.

I am trying to figure out what my best financial option is: REPAYE vs refinance vs possibly a mix of both??
I am currently a 3rd year resident of a 5 year program. I recently commissioned Army Reserve and as part of my incentive package I will eligible for $40,000/year loan repayment (taxable of course) during my remaining 3 years of residency, payable at the end of each academic year. I currently stand at $360k for loans + accrued interest w/ average APR of 6.7%.
My total annual income for residency + military is $91K. I am married w/ 2 kids and my wife currently works full time as a stay-at-home mom
If my Army $40k (minus taxes) payment goes to federal loans in July/August of next year then am I correct that it will likely pay all my annual interest and thus negate any benefit of the REPAYE plan? Or, does the REPAYE plan forgive any interest on a monthly basis?
Currently I have an offer from Laurel Road Bank (formerly DRB) for 5.15% 7 year fixed student loan refinance with $100/month payment during residency.

I am trying to figure out what my best financial option is: REPAYE vs refinance vs possibly a mix of both??
thanks in advance for any help and other details I may be missing.

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[dpmd]

Hello all - please some help for finding the correct financial solution.

I am trying to figure out what my best financial option is: REPAYE vs refinance vs possibly a mix of both??
I am currently a 3rd year resident of a 5 year program. I recently commissioned Army Reserve and as part of my incentive package I will eligible for $40,000/year loan repayment (taxable of course) during my remaining 3 years of residency, payable at the end of each academic year. I currently stand at $360k for loans + accrued interest w/ average APR of 6.7%.
My total annual income for residency + military is $91K. I am married w/ 2 kids and my wife currently works full time as a stay-at-home mom
If my Army $40k (minus taxes) payment goes to federal loans in July/August of next year then am I correct that it will likely pay all my annual interest and thus negate any benefit of the REPAYE plan? Or, does the REPAYE plan forgive any interest on a monthly basis?
Currently I have an offer from Laurel Road Bank (formerly DRB) for 5.15% 7 year fixed student loan refinance with $100/month payment during residency.

I am trying to figure out what my best financial option is: REPAYE vs refinance vs possibly a mix of both??
thanks in advance for any help and other details I may be missing.

Would your loan repayment work with the refinanced loan option. Even if it is taxable it is still worth using.

 

[RomeoENT]

Would your loan repayment work with the refinanced loan option. Even if it is taxable it is still worth using.

Yes, the loan repayment is eligible for refinanced school loans.

I think I’ve decided to go for the refinance and pay $100 per month during residency and have a lower interest rate and therefore more of the annual repayment will go toward principle. If anyone has more thoughts or suggestions let me know.

 

[dpmd]

Sounds like a decent plan. You could even calculate the interest difference with the new rate and see if the repayment or not of accrued interest under repaye would even make a difference (if it was calculated monthly instead of yearly so you got the benefit of it and the 40k would pay down some prinicipal).