medical residency relocation loan

What is a Medical Residency Relocation Loan?

For most aspiring physicians, medical school is a grand adventure that also carries with it major sleep deprivation, intense licensing exams, and what feels like crushing student loan debt. Unfortunately, you’re not out of the woods after graduation- even when it comes to spending money. You’re still looking at spending thousands just to make it to residency. The medical training process isn’t cheap but fear not, this is where medical residency relocation loans come in. 

Expected Residency Costs

Securing a residency position means signing up (and paying for) ERAS, The Match, USMLE transcription access, plus the cost of interviews. Prior to 2020, interviews involved lots of travel, hotel stays and delicious, albeit unhealthy food. Luckily, many programs have now moved to virtual interviews which greatly reduces the previously high cost of interview season. 

The AMA estimates that doctors in training spend $1,000 to $13,000 during the residency interview process alone. (And that’s before shelling out up to $4,000 on board certification exams.) Since residency is no longer considered “schooling” but instead “training”, additional student loans will not cover these costs. So, how does one pay for all of the costs of residency? For many, the answer is a medical residency and relocation loan. 

What are Medical Residency Relocation Loans?

Medical residency relocation loans are specialized loans offered to current and future medical residents. They’re designed to cover expenses incurred securing a residency position, including application fees, travel, food, and moving expenses. Thankfully, you can usually use the funds for any expenses incurred during the process. 

To qualify for a residency and relocation loan, you’ll need proof of residency (such as a MATCH letter) or evidence of enrollment in a medical program. Lenders often cap these loans around $20,000, though some lend up to $45,000 per loan. (By contrast, personal loans can carry limits up to $100,000 or more.) 

Because of their strict eligibility criteria, residency loans often have lower interest rates and longer terms than personal loans. Additionally, you may qualify for interest-only payments or even deferred payments while you’re in residency. 

Taking Out a Residency and Relocation Loan

Taking out a residency relocation loan works similarly to other types of loans; however, you’ll have a smaller lender pool to choose from. Here are some things to consider:  

Finding the Right Lender

The first step to getting a residency loan is to find a lender. There are only a handful of designated medical residency relocation loan programs in the United States, including:

  • The Sallie Mae Medical Residency and Relocation Loan program (maximum loan: $30,000)
  • PNC Solution Loan for Health Professions Residency (maximum loan: $15,000)
  • Discover Residency Loans (maximum loan: $5,000 to $18,000 based on your profession) 
  • Citizens Bank Medical Residency Loan (maximum loan: $20,000)

Several institutions also offer personal loans to medical residents; however, they tend to come with shorter repayment terms (7 years or less) and may not offer deferrals. By contrast, residency relocation loans may have repayment terms spanning 10 to 20 years. 

Understanding the Eligibility Criteria

Residency loan lenders set slightly different eligibility criteria. That said, you generally must:

  • Be enrolled at least half-time in your 4th year of medical school or have graduated in the last 12 months
  • Be at least 18 years old
  • Claim U.S. citizen or permanent resident status
    • Some lenders permit international students if a U.S. citizen or permanent resident cosigns
    • Some lenders may require permanent residents to have lived in the U.S. for at least 2 years
  • Meet lender-specific credit and debt-to-income requirements
  • Pass a credit check

Considering a Cosigner

With a good credit score, you may not need a cosigner to qualify for a residency and relocation loan. However, if you have poor credit or aren’t a U.S. citizen, bringing on a cosigner may be a smart move. Not only can you boost your approval odds, but you may qualify for a lower interest rate, too. 

Comparing Your Offers

If you want a “true” residency loan, then you have a limited option pool to choose from. Still, shopping around can help you get the best terms for your financial situation.  

Considerations Before Taking On Debt

Before taking on any kind of residency or personal loan, consider:

  • Your current and future budget and goals
  • Whether you qualify for a fixed or variable interest rate
  • Your loan terms and monthly payments
  • If and how long your payments will defer during residency
  • Any additional fees to procure the loan

Should You Take Out a Medical Residency Relocation Loan?

Thanks to the high costs of securing a residency and license to practice medicine, your educational and career expenses don’t end after graduation. If you don’t have the savings or income to cover these costs upfront, a medical residency relocation loan can be cheaper than using your credit card. 

Since these funds don’t come with the same spending and disbursement restrictions as some federal or private student loans, it’s crucial to discipline yourself in your spending. If you don’t need to go into debt to get into a good residency program, it’s best to avoid it altogether. 

  • Elizabeth is a Physician family advocate, Certified Life Coach for Physician Wives, EM wife of 20+ years, mother, and founder of The MedCommons – a marriage between her tech/business dev background and passion for helping physician families.

Share this article:

Newsletter Subscribe

The MedCommons Monthly

Friendly tips and expert advice delivered right to your inbox.  

Connect With People Who Understand

Medical moves without friends, family and a sense of community can be lonely and isolating. It shouldn’t feel that way. We’re here to help. We’ve built a way for you to connect with a community of physician spouses who know from experience that ​​residencies and fellowships are emotional and exhausting times. Quickly develop much-needed friendships to provide the comprehensive support you need.