Cover the costs of post-medical school exams, residency application fees, moving expenses and more.
Doctors might have impressive salaries, but most won’t see that money until after years of medical school, internships and residencies. If the cost of moving to complete that last step in your medical education is too much, consider looking into residency relocation loans.
What’s a residency relocation loan?
A residency relocation loan is a type of private student loan to cover costs related to becoming a doctor that are outside of school. These include:
- Board exam review courses and fees
- Textbooks and study guides
- Interview travel expenses
- Residency application fees
- Medical instruments
- Moving and shipping costs
- Internship expenses
Residency relocation loans became a necessity because most student loan providers don’t allow you to borrow more than your school-certified costs. Flying across the country for an interview, moving and covering living expenses while you’re still a student are often prohibitively expensive. Residency relocation loans were created to open more doors for recent med school graduates looking to land a prestigious position in the future.
Top 4 residency relocation loans
|Lender||Loan amount||Variable APR||Fixed APR||Max. term||Grace period|
|Discover||$1,000– $18,000||5.89%–9.49%||6.99%–10.49%||20 years||9 months after you graduate or drop below half-time.||Learn more|
|Wells Fargo||$1,000– $15,000||9.53%–9.76% with autopay discount||9.76%–9.99% with autopay discount||7 years||6 months after you leave school, or 36 months for allopathic and osteopathic students.||Learn more|
|Sallie Mae||$1,000– $20,000||5.51%–11.78%||None||20 years||36 months after you graduate, or 9 months if you drop below half-time without graduating||Learn more|
|PNC Bank||$1,000–$15,000||4.94%–11.10% with autopay discount||5.59%–11.79% with autopay discount||15 years||6 months after you leave your residency or internship||Learn more|
Rates and terms as of February 2019
Discover Residency Loans
Discover offers a no-fee residency relocation loan that you can use for residencies, internships and board exams. How much you’re eligible to borrow depends on your profession:
- Up to $18,000: Allopathy, optometry, dentistry, osteopathy, podiatry, pharmacy and veterinary medicine.
- Up to $5,000: Nursing, physical therapy, occupational therapy and physician assistant.
You can defer your loan while you’re in school at least half-time, working at a public service organization, on active military duty or during a residency.
You’re eligible if you …
- Graduated in the last 12 months or are in the final year of your program.
- Are a US citizen, permanent resident or international student with a cosigner.
- Have strong personal credit or a creditworthy cosigner.
Wells Fargo MedCap-Xtra Loans
Wells Fargo’s MedCap-Xtra Loans come in lower amounts, higher rates and shorter terms than your typical residency relocation loan. However, it offers rate discounts of up to 0.5%: A 0.25% discount for signing up for autopay and an extra 0.25% to Wells Fargo customers.
How much you can borrow depends on how you use the loan. If you need funds to help cover the cost of preparing for and taking medical board and clinical exams, you can borrow up to $12,500. Students who need help applying for and relocating for a residency can qualify for up to $15,000. You can only borrow up to $5,000 to pay for an internship.
You’re eligible if you …
- Are a US citizen, national or permanent resident.
- Are in the final year of an approved school for residency and internship loans.
- Are in at least the second year of an allopathic, osteopathic, dentistry, or podiatry program for exam loans.
- Are making satisfactory academic progress as defined by your school.
Sallie Mae Medical Residency and Relocation Loan
Sallie Mae’s Medical Residency and Relocation Loans currently come with some of the lowest starting rates and longest terms. However, you can only get a variable rate, which can fluctuate over the life of your loan, making repayments difficult to predict.
Sallie Mae might be a good choice for students looking for a long grace period. Repayments don’t begin until three years after you graduate or nine months after you leave school. You can also make interest-only repayments for the first two or four years of paying back your loan.
You’re eligible if you …
- Are enrolled at least half-time at an allopathic, osteopathic, veterinary or podiatric school.
- Are in the last year of your program or graduated within the last 12 months.
- Earned or expect to earn an MD, DO, DVM, VMD or DPM degree during the academic year you applied for financing.
- Are a US citizen, permanent resident or international student with a qualified cosigner.
- Have strong credit or a creditworthy cosigner.
PNC Bank Solution Loan for Health Professions Residency
PNC Bank’s residency loan is for MD, DVM, DDS, and DO residents only, so you’ll want to skip this one if you want to finance an internship or exam-related costs. You can prequalify online in a few minutes and potentially get up to 0.5% knocked off your interest rate if you sign up for autopay.
During your residency, you have the option of deferring repayments for up to four years. The grace period lasts for six months after your residency ends.
You’re eligible if you …
- Participate in or plan to participate in an eligible residency program in the next year.
- Are a US citizen or permanent resident.
- Have lived in the US for the past two years.
- Have strong personal credit.
- Have a low debt-to-income ratio
How do residency relocation loans work?
Residency relocation loans work by giving you funds to pay for post-medical school costs. Most lenders allow you to apply for a loan up to a year before you’re set to graduate, though you’ll often need to still be enrolled to qualify.
Like with most private student loans, residency relocation loans typically don’t come with any application, origination or prepayment fees. Interest rates start slightly higher than undergraduate student loans, but they tend to have a tighter range. Most lenders offer both fixed and variable rates. Fixed rates stay the same during the life of your loan, while variable rates fluctuate depending on the lending market.
Expect to pay a variable APR between 5% and 12% or a fixed APR between 6.5% and 13%.
How much you can borrow varies depending on your specialization. For example, allopathic and osteopathic students are often eligible for larger amounts than nursing and physical therapy students. How you use your funds can affect what loan amounts you’re eligible for.
Typically, you can borrow between $1,000 and $20,000.
Grace period and deferment
Almost all residency loans allow you to defer repayments until you leave school and come with a grace period. Some lenders begin the grace period when you graduate or drop below half-time enrollment. Others allow you to wait until after you finish your residency or internship. Either way, most let you defer your loan while you’re participating in a residency.
Grace periods generally last between six and nine months.
Repayment and terms
Since residency relocation loans are private student loans, you don’t have as many repayment options as you would with federal student loans. Typically, borrowers can choose to make interest-only or small fixed repayments during the grace period — or hold off on repayments completely. After that you’re expected to make full repayments until the loan term is up.
Loan terms often range from 15 to 20 years, though you can usually pay off your loan earlier to save on interest.
Compare more private student loan lenders
Alternatives to a medical residency loan
With the average student debt load nearing $180,000 for medical students at graduation, there’s a chance you’ll want to avoid taking on even more debt. If you’re unable to pay for your post-medical school costs, check out these alternatives.
Scholarships and grants
If you’re unable to afford your residency, you might qualify for a grant or scholarship to help cover the costs. They’re usually smaller than a residency relocation loan — typically around $1,000 — so apply for a few.
Start your search by looking for scholarships in your field. Women, minorities and residents in economically disadvantaged areas can also often find scholarships specific to them.
While personal loans might not let you use the funds to pay for school, you can often use them to cover postgraduate expenses. If you don’t have the credit or income to qualify on your own, you might want to look for lenders that allow you to apply with a cosigner.
You can usually borrow up to $50,000 from a personal loan provider, though you typically only have up to seven years to pay it back. And repayments start immediately. But if you have a friend or family member willing to cover the payments while you’re in school, it could be a good choice.
Friends and family
You family might have already helped you out when you were in medical school. But if your parents are dying to have a doctor in the family, they might be willing to help you pass around the hat to raise money for these final expenses.
If you’re not comfortable taking money from your family, you can also turn it into a loan with rates and terms that make sense for you using a service like LoanWell.
Medical students who have a strong social media presence might also be able to raise money from their peers by setting up a crowdfunding campaign. Bonus points if you can make a case for yourself with a fun video. Keep in mind that most platforms charge a fee for each donation and many won’t let you access your funds unless you reach your fundraising goal, so keep it realistic.
Residency relocation loans are one of the few ways to cover the postgraduate costs involved with becoming a doctor. If you don’t have friends or family to support you, it might be a necessity. You can learn more about how student loans work and compare more lenders by visiting our guide to student loans.
Frequently asked questions
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