Residency and Relocation Loans

December 26, 2023

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Fourth-year medical students may encounter expenses not included in the standard student budget and may find it necessary to borrow additional funds through a residency and relocation loan. If you are considering a residency and relocation loan to cover some of your additional expenses associated with the residency match (traveling for interviews, related meals, lodging) or relocation costs, it’s important to understand how these private loans differ from federal loans.

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Itemize Anticipated Expenses 

Medical school may be coming to an end, but there are still many additional expenses that pop up in your last year that are necessary, even required, to help you get ready for residency.

Although you may have anticipated these additional expenses, do you have adequate funds to cover them?  Do you find yourself needing some extra money to help you get through your last year as you prepare for interviewing and relocating? It’s helpful to itemize your anticipated expenses to determine if your need for this loan is legitimate or if it’s just a nice cushion to have. One of the costliest mistakes medical students make is to borrow funds they don’t truly need.

Before borrowing a Residency and Relocation Loan, talk to the financial aid staff at your medical school. You may have other options available that you haven’t considered. The financial aid staff can help you evaluate your options so that you make the best decision for your borrowing needs.

Residency and Relocation Loans are Private Loans

Borrowing this type of loan is strictly between you and the lender. Typically, the medical school’s financial aid staff do not certify your eligibility for this loan; however, they may be asked to confirm your enrollment status.

The fees and interest rate you pay will be based on your creditworthiness, and/or the creditworthiness of you and your co-signer.

Be discriminating if you choose to borrow this type of loan. Compare the loan’s features, benefits, terms, and repayment options before making a final decision to borrow. It’s important to know what you’re getting into; this loan you will have to pay back, and typically private loans may cost you more than other loans.

For more information about how private loans may differ from federal loans, review the Federal vs. Private Education Loans fact sheet.

Is a Residency and Relocation Loan Right for You?

Review the following details to decide if this is the best product for your needs:  

  • Interest rates.
  • Maximum loan amount.
  • Processing time.
  • Disbursement dates.
  • Options to postpone payment.
  • Loan repayment terms.
  • Other loan requirements or conditions.
Some Questions to Ask Before Borrowing

Interest Rates, Fees, and Terms
  • How is the interest rate calculated?
  • Is it a fixed or variable rate loan?
  • What are the terms of the loan?
  • Can the financial aid staff provide any additional information about the loan?
Loan Application Process
  • Is it an online application?
  • Is instant loan approval offered?
  • Is a co-signer required?
  • If a co-signer is needed, can the co-signer be released from the loan and, if so, what does that process entail?
Repaying Your Loan
  • When does repayment start?
  • Are deferment and forbearance options offered after graduation and during residency?
  • Are there incentives for on-time or electronic payments?
  • Are there any pre-payment penalties?
Customer Service
  • Can you talk with a customer service representative if you have any questions?
  • Is customer service available during convenient hours?
  • Can you access your loan account online?

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