As you explore your options to help you pay for your stint in a medical residency, you may quickly realize that traditional education loans won't be much help to you.
While completing a residency is required to become a medical doctor, it's not technically considered an education expense. So fourth-year medical students may need to look for medical residency and relocation loans that are designed to help fund this chapter of their training.
The good news is that you’ll find many options for medical residency and relocation loans. But where should you start your search to ensure you get a good deal? In the article below, we take a closer look.
What Is A Medical Residency And Relocation Loan?
First, let’s define what medical residency and relocation loans are. This is a unique type of private student loan that helps you cover the costs of becoming a doctor beyond your classroom expenses.
You can use the funds you obtain through a medical residency and relocation loan to cover the following costs:
- Residency application fees
- Interview travel expenses
- Moving and shipping costs
- Internship expenses
- Textbooks and study guides
- Board exam review courses and fees
Most student loan providers will not allow you to borrow money beyond the cost of your traditional schooling. However, it is easy to see how the costs beyond the classroom can add up quickly on your path to becoming a doctor.
Suppose you are looking at the upcoming expenses you face as you pursue a residency and wonder how on earth you will pay for it all. In that case, a medical residency and relocation loan could be the answer. After all, most medical students don’t have thousands of dollars to cover travel and moving expenses as they start the next chapter.
Instead of letting your minimal resources hold you back at this critical juncture in your career, a medical residency and relocation loan can help you move forward confidently.
Where To Find Medical Residency And Relocation Loans
Convinced that medical residency and relocation loans are worth looking into? Here are the top options to help you find a competitive loan that meets your needs.
Sallie Mae Medical Residency And Relocation Loans
Sallie Mae is a recognizable name in the private student loan space. So it's not surprising that they would offer medical residency and relocation loans.
Through Sallie Mae, you can borrow up to $30,000. The funds can be used to cover many expenses related to your medical residency, including moving costs, travel costs, and board examination fees.
These loans can be used for three different types of residencies - medical, podiatry, and veterinary. With that, many students can find the resources they need through this loan.
Sallie Mae offers competitive rates. If you go with this loan, you’ll enjoy a deferred repayment. You won’t have to make any payments while you are in school if you are enrolled at least half time. Plus, there is a grace period of three years after you graduate or nine months if you leave school or drop into a less than half-time status.
Read our full Sallie Mae review here.
Discover Residency Loans
Discover residency loans offer students an option with zero fees, which means no application, origination, or late fees will come your way.
You can borrow up to $18,000 through this option for several residency types including allopathy, dentistry, optometry, osteopathy pharmacy, podiatry, and veterinary medicine. Other students in their residency periods in the field of nursing, occupational therapy, physical therapy, or physician assistants can borrow up to $5,000.
In order to apply, you must be currently enrolled in your senior year of a graduate health professionals program or have graduated from medical school in the past 12 months. Once you take out the loan, you can use it to cover your residency, internship, relocation expenses, and board exam fees.
You won’t have to make payments until nine months after you graduate. And the standard repayment term is 20 years.
Check our out full Discover student loans review here.
Citizens Medical Residency Loans
Citizens Bank allows students enrolled half-time in their second or later year of medical school to take out medical residency loans. You will also qualify if you graduated within the last 12 months. However, you must plan to participate in a residency after graduation.
The residencies allowed include medical, dentistry, podiatry, veterinary, osteopathy, or optometry. You’ll be able to borrow up to $20,000 to cover your residency-related expenses.
If you take out this loan, you can defer repayment while you're in school. Additionally, you can request an extension on the deferment period for up to 48 months while completing your residency program.
Check out our full Citizens Bank review here.
Laurel Road Personal Loans For Residents And Fellows
Laurel Road offers a unique spin to residency loans. If you are a physician or dentist within 12 months of completing your training with a signed contract to practice upon completion, then you can borrow up to $80,000.
If you don’t have a signed contract while you are still in training, then you can only borrow between $30,000 and $45,000 based on the training year you are completing. For example, if you're a fellow, you can borrow up to $45,000. If you are in your first year of training, then you can only borrow up to $30,000.
When you take out this personal loan as a resident or fellow, you can use the funds for almost anything. As a personal loan, you won’t have to use the funds exclusively for your residency expenses. Instead, the funds can also be used for making home improvements or funding a major expense.
The repayment terms for these loans range from 5 to 7 years. And the payments can be as low as $25 per month. The low monthly payment is a nod to the investment you're making in your financial future.
Check out our full Laurel Road student loans review here.
Should You Apply?
As you approach the final stretch of your medical education, you may see expenses looming on the horizon. If you can't cover those expenses out-of-pocket, you may have to consider medical residency and relocation loans as an option.
Of course, you should do everything in your power to avoid taking on more debt. But it might be unavoidable in some cases.
If you do decide to apply for a residency and relocation loan, don’t ask for more than you really need. Take some time to tally up the projected costs of your residency and relocation before deciding on a loan amount. You won’t want to be stuck taking out a larger loan than you need to.
Medical residency and relocation loans can help medical school grads cover the costs of an important point in their educational journeys. If you decide that taking out one of these loans is right for you, take the time to shop around for the best rates and terms before signing on the dotted line.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.