Residency and Relocation Loans
Take advice from prior medical students – The Match process can be very expensive! You may need to consider an additional loan to cover miscellaneous costs such as airline travel, gas, hotels, dry cleaning, airport food, etc. These residency and relocation loans are considered private loans for students in their final year of medical school to help cover expenses associated with finding a residency position, including travel to interviews and relocation costs that are not covered by a federal student loan.
Many private lenders offer additional loans for residency interviewing and relocation costs. While minimizing your student loan debt is important, such loans are generally preferable to credit cards. These loans to not require certification of financial eligibility. If you have not exhausted all of your federal loan eligibility, it is recommended that you do so before borrowing with a residency and relocation loan.
Things to Know About Residency and Relocation Loans
- They are credit-based, meaning that they require clean credit. The higher your credit score, the lower your rate.
- They typically charge higher interest rates than Stafford loans. This is because Stafford programs have a fixed interest rate, whereas the interest rates for residency and relocation loans are influenced by your credit score.
- Their interest rates change quarterly, typically with high or no interest rate caps. Stafford loans have interest rate caps – so please note that these types of loans do not! Be sure to read the fine print on your loan program.
- They typically have higher origination and processing fees than federal loans. These fees vary from lender to lender, so be sure to check your fees.
- They accrue interest immediately, although payments can be delayed for 3-5 years after graduation. Just like an unsubsidized loan, these are always accruing interest.
Residency and Relocation Loan Program Options
| Lender | Loan Program | Phone Number | Minimum and Maximum Loan Amount |
|---|---|---|---|
| Sallie Mae | Medical Residency and Relocation Loan | 888-272-5543 | $1,000 – $20,000 |
| Wells Fargo | MedCAP – XTRA Loan | 800-378-5526 | $1,000 – $15,000 |
| Discover Student Loans | Discover Residency Loan | 800-788-3368 | $1,000 – $18,000 |
Things to Consider When Selecting a Loan Program
- Your budget and financial goals: Be sure to consider the full picture of your regular expenses, ongoing budget, and long-term financial goals before you consider loan options.
- Loan availability: How much are you eligible to borrow based on your budget?
- Interest index – PRIME or LIBOR rate: Consider the borrowing interest rate as you evaluate your options. This can make a big impact on what you owe.
- Length of deferment during residency: Consider how your salary after residency will affect payment, but be sure to allow for “buffer” time for adjustment to salary changes and the additional expenses that come with starting your career.
- Origination and supplemental fees: This is what you’re paying to be able to borrow. Be sure to check these fees.
- Whether you have a prior borrowing relationship with the lender: This can sometimes be beneficial in getting better terms and rates for your loan.
Additional Resources to Help You Evaluate Your Options
- Check your credit score at FreeCreditReport.com
- AAMC Guide to the Cost of Applying for a Medical Residency
- AAMC Guide to Easing Into Residency: Transition Tips
- AAMC Budgeting Basics: Managing Your Money During the Lean Years
Check out these pages for more information about loans: