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Whether you’re a recent medical school graduate or are still wrapping up your coursework, a residency relocation loan can help.
You can expect to spend around $3,700 just interviewing for residencies on expenses like travel, lodging, and meals. Factor in review courses and fees for your medical board exam, textbooks and study guides, and moving and relocation costs when you land a residency — and you could quickly find your finances taxed to the limit.
But before you get discouraged, here’s how to finance all of that.
In this post:
- Best residency relocation loans
- How medical residency relocation loans work
- Frequently asked questions
Best residency relocation loans
Fortunately, medical residency relocation loans can cover expenses not included in your school’s cost of attendance. Just keep in mind that although you’ll often be able to postpone repayment until you’ve completed your residency, you’ll want to compare lenders to find the best rates on residency relocation loans.
|Loan amounts||Repayment terms||Grace period|
|Discover residency loans||20 years||9 months: No payments required while enrolled in school or during medical residency.|
|Sallie Mae residency loans||$1,000 up to $20,000||Check with lender||Three years after you graduate, or 9 months if you leave school or drop below half-time|
|Personal loans||$1,000 up to $100,000||2 to 7 years||None|
Discover residency loans
Discover Residency loans of up to $18,000 are available not only to doctors, but dentists, optometrists, pharmacists, osteopaths, allopaths, podiatrists, and veterinarians.
Discover also offers smaller residency loans of up to $5,000 to nurses, occupational therapists, physical therapists, and physician assistants launching their careers.
Discover Residency loans offer the following benefits:
- Three repayment plans during grace period: Interest-only, $25 fixed, or deferred
- Choice of fixed or variable interest rate
- 0.25% autopay discount
- 0.35% interest rate discount for interest-only payments during school
- No origination fees or prepayment penalties
Sallie Mae residency loans
Sallie Mae offers residency loans not only to recent graduates and students taking their last year of classes at an accredited medical school, but also to aspiring podiatrists and veterinarians.
With Sallie Mae residency relocation loans, you can borrow from $1,000 up to $20,000. You can make interest-only payments for the first 2 or 4 years of your residency loan, or defer payments altogether for either 36 months after graduation or nine months after withdrawing from school.
Unlike the company’s other student loans, Sallie Mae residency relocation loans are only available with a variable rate. That means your interest rate and monthly payment can go up or down after you take out your loan.
Sallie Mae residency relocation loans offer the following benefits:
- Two repayment plans during grace period: Interest-only or full deferment
- No origination fees or prepayment penalties
- 0.25% autopay discount
- Apply for cosigner release after 12 months of payments
With repayment terms of up to 20 years and the option to defer payments during your grace period, residency relocation loans are tailored for recent medical school graduates. But if you’ve got sufficient income and credit, a personal loan could also be a good choice for financing your residency expenses.
With a personal loan, you may qualify to borrow up to $100,000 — if your income can support that kind of debt. But the shorter repayment terms available on personal loans (2 to 7 years) can translate into higher monthly payments. And there’s no grace period, so you’ll have to start paying a personal loan back as soon as you take it out.
There’s a wide selection of lenders who offer personal loans, so it’s a good idea to request rates from several lenders. Keep an eye out for origination fees and prepayment penalties, which can add to your borrowing costs.
Personal loans offer the following benefits:
- Borrow as little as $1,000 or as much as $100,000
- Wide selection of lenders
- Fixed interest rates available from most lenders
How medical residency relocation loans work
Residency loans are private student loans and are intended to cover expenses that you’re not supposed to pay for with federal student loans. Your medical school’s financial aid may be asked to confirm that you’re a student but does not certify your eligibility for a residency loan.
Be choosy when shopping for a medical residency relocation loan: compare rates, loan features, and repayment plans. If you can qualify, many personal loans can also be used to pay for residency relocation expenses.
Grace period and deferment
As is the case with any loans you took out during medical school, interest charges on residency loans start racking up as soon as you take them out. You’ll usually have the option to defer payments altogether while you’re still enrolled in school or completing your residency.
But if you can afford to make small monthly payments that cover some or all of your interest while you’re in your grace period, that can save you a lot in the end.
Once you’ve completed your residency, your repayment term will typically be up to 20 years. That’s a long repayment term for loans that typically don’t exceed $20,000. But the repayment term takes into account that most medical school graduates already have six-figure student loan debt when they graduate.
Frequently asked questions
- Who are residency relocation loans best for?
- How much should I borrow?
- Should I use a cosigner?
- How can I apply?
Who are residency relocation loans best for?
Residency relocation loans are best for recent graduates of accredited medical schools or students who are in their last year of medical school and have a high level of confidence that they will work in medicine.
How much should I borrow?
Although you can typically borrow up to $20,000 for residency relocation, only borrow what you need. The 20-year repayment term on residency loans could translate into thousands of dollars in additional repayment costs. On the plus side, Discover and Sallie Mae don’t charge prepayment penalties if you’re able to pay your loan off ahead of schedule.
Should I use a cosigner?
Private lenders base your eligibility on your creditworthiness, and the interest rate you’re offered will depend on your credit score. If you don’t have a history of earnings and credit you may need a cosigner to obtain a residency loan. A cosigner can be a parent, relative, friend, or anyone who’s willing to help you take the next step on your path to becoming a medical professional.
Although being a cosigner is a big responsibility, you can often apply to have your cosigner released from their obligation once you’ve made a minimum number of monthly payments and can demonstrate you’re able to repay the rest of your loan.
How can I apply?
Many lenders who offer medical residency loans have an online application process. To find out what rates you actually qualify for, you may have to authorize a hard credit check. If instead you just want to pursue loans that aren’t specific to residency, Credible makes it easy to quickly compare interest rates on the best private student loans without affecting your credit score at all.