Residency Relocation Loans: What They Are and Where You Can Borrow

Residency relocation loan funding can be used to pay for miscellaneous expenses as medical students match to their residency programs. Since expenses related to exploring residency programs aren’t included in standard financial aid packages, fourth-year medical students may need to find funding through private lenders.

There are options when shopping for a medical residency and relocation loan, however, so it’s important to know where to find a competitive offer.

What is a residency relocation loan? Where to borrow a residency relocation loan Using a personal loan to pay for residency relocation costs Residency relocation loan FAQ

What is a residency relocation loan?

Relocation loans for medical students nearing residency mainly take two forms: private student loans or personal loans. Costs, such as application fees, flights, transportation, accommodations, meals during program visits and moving expenses, may be paid through a residence relocation loan if needed.

According to the Association of American Medical Colleges, these were some of the average costs associated with applying for residency programs as of 2019:

Electronic Residency Application Service (ERAS) fees: $860 National Resident Matching Program (NRMP) fees: $85 Interview costs (including travel, lodging, food, etc.): $3,700

Medical students looking to be matched with a residency program spend an average of about $4,645. It’s important to note that the total amount of money that students spend on residence relocation may be more or less, depending on factors such as the number of programs to which they apply and seasonal travel rates.

Considering that thousands of dollars can be spent during the residency search — not including medical school costs — students may choose to take out a residency relocation loan to fund the expense.

Where to borrow a residency relocation loan

Sallie Mae Medical Residency and Relocation Loan

The Sallie Mae residency relocation loan offers students from $1,000 to $30,000 for residency-related costs.

You can choose from a variable or fixed interest rate, as well as defer payments as long as you’re enrolled at least half-time. The loan also offers deferment during your grace period, which is the first three years after graduating. If you leave school or drop below half-time, your grace period is shortened to nine months.

By enrolling in automatic payments, you lower your interest rate by 0.25 percentage points. The Sallie Mae residency relocation loan doesn’t charge origination fees or early prepayment penalties.

Eligibility

Borrowers must:

Be pursuing or have the following degrees: Doctor of medicine (M.D.) Doctor of osteopathy (D.O.) Doctor of podiatric medicine (D.P.M.) Doctor of veterinary medicine (D.V.M. or V.M.D.) Be enrolled in an accredited institution at least half-time or have graduated from a participating school within the past 12 months Be U.S. citizens or U.S. permanent residents

A cosigner who is either a U.S. citizen or U.S. permanent resident may be included in the loan application if the borrower doesn’t meet citizenship or credit criteria. After you make a minimum of 12 on-time principal and interest payments, you may request to have your cosigner released from the loan if you meet credit history and income requirements.

PNC Solution Loan for Health Professions Residency

PNC Bank offers relocation loans for medical students of $1,000 to $15,000 with no application or origination fees. Additionally, borrowers can choose among three repayment terms: 5, 10 or 15 years.

For added savings on loan interest, you’ll receive a 0.50 percentage point interest rate discount when you enroll in automatic payments from your checking or savings account. This is 0.25 percentage points more than the autopay discount offered by our other featured lenders.

Payments can be deferred while you’re in residency for up to four years, with a six-month grace period. PNC Bank allows cosigners, offering cosigner release after at least 48 consecutive, on-time payments. You’ll also need to demonstrate the ability to repay your loan payments and meet credit criteria to remove your cosigner from the loan.

Eligibility

Borrowers (including students and possible cosigners) must:

Be in the process or planning to enroll in an approved medical residency program. Approved programs include doctor of dental surgery (D.D.S.), M.D., D.O. and D.V.M. Be U.S. citizens or U.S. permanent residents and have lived in the U.S. for the past 2 years Be able to meet credit qualifications and debt-to-income requirements Using a personal loan to pay for residency relocation costs

In addition to private student loans, personal loans are another option to pay for the cost of residency relocation. Although these two loan types may seem similar, they are different in a few key ways.

For example, private student loans may offer lower interest rates and require you to use the funds toward a specific expense. Personal loans, however, are disbursed directly to you rather than your school’s financial aid office and are more easily dischargeable during a bankruptcy.

Where to borrow a personal loan for residency relocation

Laurel Road Personal Loan for Medical Residents

Students in training or who have a residency match letter may apply for a loan. The online lender offers up to $15,000 toward residency relocation costs with repayment term options of five or seven years.

When you sign up for automatic electronic funds transfer, you’ll receive a 0.25 percentage point interest rate discount. Additionally, if you have another Laurel Road lending account, you may be eligible for a relationship discount.

Eligibility

Borrowers must:

Be U.S. citizen or permanent residents (if a permanent resident, the borrower must show proof that they have a valid I-551 card with at least 10 years between the issue and expiration dates) Meet qualifications on credit history SunTrust Physician Loan

SunTrust Physician Loans are available to fourth-year medical students who’ve received a residency match. You may apply for up to $50,000 toward personal expenses related to residency relocation. There are no application or origination fees or early payment penalties for this residence relocation loan.

The lender offers repayment terms of up to 10 years. Eligible students may receive the option to make interest-only payments up to the first 48 months after disbursement. After this time, you may be able to renew this option for your second year.

Eligibility

Borrowers must:

Be matched with a residency program Be pursuing doctor of dental medicine (D.M.D.), D.D.S., M.D. D.O. or D.P.M. degrees Have qualifying income and credit Residency relocation loan FAQ

Can a federal student loan cover residency relocation costs? Yes. If you have unused federal student loans, those extra funds can be used toward resident relocation.

How much should I borrow? To reduce the overall medical school debt you’ll owe, maximize the amount of federal student loan funds you’re eligible for and only borrow alternative loans up to the amount you need.

Can I borrow a residency relocation loan with bad credit? Yes. However, you’ll need to find a cosigner with strong credit and a lender that accepts applications with a cosigner. If you decide to apply for a residency relocation loan with a cosigner, try to find a lender that offers cosigner release if possible.

Should I consider a cosigner for a residency relocation loan? If you don’t meet credit requirements or aren’t a U.S. citizen or permanent resident, you may need a cosigner for a residence relocation loan.

How do I find the best residency relocation loan for me? To find your best residency relocation loan, estimate your realistic residency relocation expenses and compare offers across multiple lenders. Make sure you’re comfortable with the borrowing amount and terms (interest rate, deferment and grace periods, repayment terms and cosigner requirements) before applying.

Paul Sisolak contributed to this report.

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