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Finishing medical school and getting ready for your residency is a huge step. But chances are, you’re going to need some financial help — like residency loans — to cover your expenses while you complete your program.
Students typically spend between $1,000 and $11,580 on residency interview costs alone, according to the Association of American Medical Colleges. If you don’t have enough money in savings to pay for those expenses, you can use residency loans to pay for board examination fees, residency application fees, and travel costs.
Here’s what you need to know before taking out residency loans:
- What are residency loans?
- 2 loan options for medical residencies
- How to take out a residency relocation loan
- Using personal loans to cover medical residency expenses
- Frequently asked questions about residency loans
What are residency loans?
Before you can begin your residency, there are a number of costs you need to worry about to even secure your position. Residency loans are designed to help you cover these expenses.
Some fees that you should expect to pay include:
- Electronic Residency Application Service (ERAs) fees: The ERAS is a centralized application program you’ll use to apply to residency programs. You can apply to up to 10 programs for $99.
- National Resident Matching Program (NRMP) Standard Applicant Fee: This is what you’ll pay to join the NRMP system, which is necessary to get matched to a residency program. The standard fee is $85.
- United States Medical Licensing Examination transcript access: You must grant transcript access along with your applications. The cost is typically about $80.
In addition, you should account for travel, meals, and lodging expenses — all of which can mean you’ll need to take out more money in student loans.
Once you get a residency position, you might also have to move to a new location. This can mean you’ll need to come up with even more money before you start earning an income. A residency relocation loan could help you pay for your moving costs.
Learn More: How to Pay for Medical School
2 loan options for medical residencies
There are some private student loan lenders that offer loans specifically for residencies. Here are a couple of Credible’s partner lenders that offer residency loans:
|Loan amount||Loan terms||Eligibility||Grace period|
|$1,000 - $20,000|
($350,000 aggregate loan limit)
|5 or 10 years||Must have graduated from medical school within past 12 months or be enrolled at least half time in your second or later year of medical studies||Up to 4 years while you're in a residency program|
|$1,000 - $30,000||20 years||Must be enrolled at least half time in your final year of study at a participating school, or have graduated from one within the past 12 months||3 years after graduation or 9 months after leaving school|
your credit score. 100% free!
Citizens residency loans
Whether you need money to relocate or to cover the board exam review, a Citizens residency loan could help you with your expenses. Citizens also allows those in residency to extend their loan deferment for up to 48 months — longer than Sallie Mae’s deferment period.
Here are a few points to know about Citizens residency loans:
- Borrow up to $20,000 for an MD, DMD, DDS, OD, DO, PharmD, DPM, or DVM residency
- Available to international students with a creditworthy cosigner who is a U.S. citizen or permanent resident
- No application, origination, or late fees
- Immediate, in-school interest only, or deferred repayment options
Sallie Mae residency loans
Sallie Mae offers higher loan amounts than Citizens, which could make it a good option.
Here are some of the key points regarding Sallie Mae residency loans:
- Borrow up to $30,000 for allopathic, osteopathic, podiatric, or veterinary medicine
- No origination fee or prepayment penalty
- Cosigner release available after 12 consecutive, on-time monthly payments
- Defer payments until three years after graduation or nine months after you leave school or drop to less than half-time status
How to take out a residency relocation loan
To take out a residency relocation loan or personal loan, follow these three steps:
1. Review eligibility criteria
Before applying for a residency loan, make sure you can meet the lender’s requirements. While the requirements vary from lender to lender, you’ll generally have to meet the following criteria:
- You must have graduated from medical school within the past 12 months or be enrolled in your final year of study in a graduate health professions program. This requirement doesn’t apply to personal loans.
- Generally, you must be at least 18 years old, though some lenders allow younger students to apply.
- Typically, you must be a U.S. citizen or permanent resident. Some lenders, such as Citizens, allow international students to apply if you have a cosigner who is a U.S. citizen or permanent resident.
- You must pass a credit check.
Learn More: How to Get a $20,000 Personal Loan
2. Consider adding a cosigner
If your credit is less than stellar, you might not pass the credit check to be approved for a loan. But you have another option: You might be able to qualify for a residency loan by adding a cosigner to your application.
A cosigner is someone with good to excellent credit and reliable income who adds their name to your application. Having a cosigner could improve your odds of qualifying for a loan and might get you a lower interest rate. Also keep in mind that a cosigner is responsible for the loan if you fall behind on your payments.
3. Compare offers
Before applying for a loan, make sure to shop around and compare as many residency loan lenders as possible to find the right loan for you. Credible makes this easy — you can compare rates from multiple lenders in two minutes.
Using personal loans to cover medical residency expenses
As an alternative to residency loans, you could consider a personal loan. Personal loans don’t have the same restrictions as a residency loan, which means you might be able to borrow more money, depending on the lender.
If you’re approved, you can usually get the funds deposited into your account within five business days. This means a personal loan could be a good option if you need money quickly.
Keep in mind, though, that you’ll need decent credit as well as verifiable income to qualify for a personal loan. Also, because personal loans have shorter repayment terms than residency loans, your monthly payments might be higher in comparison.
Here are a few things to know about personal loans:
- Borrow up to $100,000, depending on the lender
- Many lenders have no prepayment penalties, but some do have origination fees
- Fixed interest rates only
- Repayment terms of one to seven years, depending on the lender
- Immediate repayment
If you decide to take out a personal loan, be sure to shop around and consider as many lenders as possible. You can compare rates from multiple lenders in two minutes with Credible. Here are our partner lenders that offer personal loans:
|Lender||Fixed rates||Loan amounts|
|9.95% - 35.99% APR||$2,000 to $35,000**|
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.
**Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33.
|6.49% - 29.99% APR||$5,000 to $35,000|
|5.99% - 29.99% APR||$5,000 to $50,000|
|6.99% - 24.99% APR||$2,500 to $35,000|
|7.99% - 29.99% APR||$7,500 to $50,000|
|10.68% - 35.89% APR||$1,000 to $40,000|
†Based on a majority of borrowers from LendingClub's marketing partners who were issued loans between 1/1/19-12/13/19. The time it takes for your loan to be funded may vary.
|15.49% - 35.99% APR||$2,000 to $25,000|
|3.99% - 19.99% APR||$5,000 to $100,000|
|6.99% - 19.99% APR1||$3,500 to $40,0002|
1Rate reduction of 0.25% when enrolled in autopay.
2You may be required to have some of your funds sent directly to pay off outstanding unsecured debt.
3After making 12 or more consecutive monthly payments, you can defer one payment as long as you have made all your prior payments in full and on time. Marcus will waive any interest incurred during the deferral and extend your loan by one month (you will pay interest during this extra month). Your payments resume as usual after your deferral. Advance notice is required. See loan agreement for details.
4Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans).Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.
|18.00% - 35.99% APR||$1,500 to $20,000|
|5.99% - 24.99% APR||$5,000 to $40,000|
|5.99% - 17.99% APR||$600 to $20,000
(depending on loan term)
|6.95% - 35.99% APR||$2,000 to $40,000|
|5.99% - 18.83% APR||$5,000 to $100,000|
|10.97% - 35.93% APR7||$1,000 to $20,000|
7Personal loans made through Universal Credit feature APRs of 10.97%-35.93%. All personal loans have a 4.25% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Information on Universal Credit’s lending partners can be found at https://www.universal-.credit.com/landing/lendingpartners
9Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds sent directly to you should be available within four (4) business days. Funds sent directly to pay off your creditors may take up to two (2) weeks to clear, depending on the creditor.
|5.94% - 35.97% APR||$1,000 to $50,000|
|8.27% - 35.99% APR4||$1,000 to $50,0005|
4The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 25.79% and 36 monthly payments of $37 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
5This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website.
Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.
6If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.
Frequently asked questions about residency loans
When should you apply for a residency loan?
Unlike other private student loans or federal student loans, which can take several weeks or even months to process, residency loans and personal loans are processed much more quickly. This is because the amounts don’t have to be certified by your school.
You can apply for a residency loan, get approved, and usually receive your money within just a few days.
Can you use federal loans for your residency relocation expenses?
Your residency-related expenses aren’t typically certified by your school, which means they aren’t eligible for financial aid like federal student loans. If you need help covering the cost, you’ll have to find alternative financing through private residency loans or personal loans.
What degrees do you need to take out a residency loan?
Before you enter residency, you’ll complete your undergraduate degree and medical school. During your final year of medical school, you’ll choose what area of medicine you want to practice and can be matched to a preferred residency program.
Once you know where you’ll begin your residency training, you can plan for relocation and apply for a residency loan. Generally, you’ll need to have graduated from your medical program or be in your final year of medical school to take out a residency loan.
What’s the difference between a residency relocation loan and a personal loan?
While residency relocation loans and personal loans can be used for the same expenses, they differ in several ways:
- Residency loans: These are designed specifically for students completing their medical residency and have similar features to medical school loans. You can choose to defer your payments until after you graduate and start your residency, and you’ll typically have up to 20 years to repay your loan.
- Personal loans: Unlike residency loans, you can’t defer personal loan payments. Repayment terms tend to be much shorter, too — usually seven years or less, depending on the lender. The time to fund a personal loan is usually less than a week.
How much should you take out?
With residency relocation loans, you might be able to borrow up to $30,000 to cover the cost of board examination fees, travel, and moving expenses related to your residency. But that doesn’t mean you should borrow the maximum amount you’re allowed.
Be sure to borrow responsibly by taking out only what you absolutely need to complete your residency. This way, you’ll minimize interest charges and how much you have to pay off in the future.
When do you start making payments on your residency loan?
When you start making payments depends on your loan type and repayment plan. Here are some of the common payment options:
- Immediate repayment: You’ll start paying the principal and interest right away.
- Interest-only payment: You’ll pay only the interest that accrues on the loan during school.
- Fixed-payments: You’ll make fixed payments during school. For example, you might pay $25 per month until you graduate and during a post-graduation grace period and then make full payments.
- Deferred payments: If you’re eligible for deferred payments, you won’t make any payments at all until after you graduate and start your residency or until your enrollment status drops below half time.