What Are Your Residency Relocation Loan Options?

Lauren WardUpdated March 12, 2023

Share this article:

Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

If you’re graduating from medical school and getting ready for your residency, you may have discovered that there are many costs involved in the process. You might need financial help to cover the expense, and fortunately there are options specifically for residents. What is a residency loan? A residency relocation loan lets you borrow money to help with residency relocation costs, which typically include travel expenses, exam fees, and residency application fees. Read on to learn about options to finance your residency relocation.

Cost of Relocating for a Medical Residency

The cost of a medical residency largely revolves around your medical specialty and desired location. The biggest expense is likely to be interviewing for a residency. You may need to do a number of interviews, depending on your specialty, and you’ll incur traveling costs associated with those interviews. While the cost of interviewing will be different for each individual, prospective residents typically spend anywhere from $1,000 to $13,225, according to the Association of American Medical Colleges. The average cost is around $4,000. In addition, there are fees for applying for a residency. These include:

Electronic Residency Application Service Fees: You can apply for as many as 10 programs for $99
National Resident Matching Program Standard Applicant Fee: $85
United States Medical Licensing Examination Transcript Access Fee: $70 for 5 transcripts plus $5 for each additional transcript ordered at the same time

Also, once you secure a residency, you’ll need to think about paying for moving expenses. To cover these costs and all the expenses above, many residents choose to take out a medical residency relocation loan.

What Is a Residency Relocation Loan?

Residency relocation loans are used to cover the costs of securing a medical residency, including exam and application fees and travel costs, as well as the expenses involved with relocating. Much like a personal loan, a residency relocation loan requires monthly payments until the loan has been paid off. Depending on which option you choose, repayment may be deferred during your residency.

Options for Residency Relocation Loans

Borrowers have several choices when it comes to residency relocation loans. For instance, you can apply for a personal loan, consider taking out a private loan, or use your credit card to pay for the expense. Here is more information about each option.

Private Student Loans

There are private student loans available for residency relocation. For instance, you can get a residency relocation loan through Sallie Mae, a company that provides private education loans. With this loan, you can borrow up to $30,000 and defer payments while you’re enrolled at least half-time and for up to three years after you’ve graduated. After your residency, you can request to make interest-only payments for the first two or four years of your loan’s repayment period.Private residency relocation loans have strict eligibility requirements. You’ll need to prove that you’re in your final year of medical school or that you’ve graduated within the last 12 months. Typically you must also be a U.S. citizen or a permanent resident.

Personal Loans

Personal loans are flexible and can be used for almost any purpose, including for residency relocation. You don’t have to provide proof that you’re in medical school; anyone can apply for a personal loan. Common reasons for applying for personal loans include such things as covering large expenses and moving across the country.With a personal loan, a bank, online lender, or credit union lends you a lump sum that you repay with interest in installments over time. In general, the higher your credit score, the lower the interest rate you may get. Once you’re approved for a personal loan, you may receive funds quickly, typically within one to five days. Personal loans tend to have fewer restrictions than private residency relocation loans. Plus, there are personal loans for borrowers of all credit types. To learn more about successfully applying for a personal loan, you can check out these tips for personal loan approval.Personal loans also generally allow you to borrow higher sums than private residency relocation loans. This can be one reason to consider using a personal loan for moving as well as other expenses related to your residency. Those are just some of the common ways to use a personal loan.However, personal loans don’t offer the same kind of deferred payment options that some private residency relocation loans might.

Credit Cards

Credit cards can be an easy and convenient way to finance your residency relocation expenses. If you use a rewards credit card, you could accumulate a lot of points or miles as you travel to different residency interviews. Another option is to apply for a card with an introductory 0% APR (annual percentage rate). During the introductory period, which could be up to 12 months or longer, you won’t owe interest. Just keep in mind that when the introductory period is over and the interest kicks in, it can add up. Credit cards tend to have higher interest rates than personal loans, so you’ll likely pay more in interest over the long run.Recommended: Best Credit Cards

How Can You Get a Residency Relocation Loan?

Here are the steps to take to get a residency relocation loan:

If you decide to apply for a private residency and relocation loan, you’ll need to prove that you’re in your final year of medical school or that you’ve graduated in the last 12 months. Typically you must also be a U.S. citizen or a permanent resident.
Whether you’re applying for a personal loan or a private residency relocation loan, you will need to meet the lender’s specific requirements. Check the eligibility requirements of any loan you’re considering to make sure you qualify.
For any loan you apply for, lenders will do a hard pull on your credit. So beforehand, review your credit report and check for errors. Report any mistakes you find to the credit bureaus.
If your credit is not strong, you might want to consider adding a cosigner to your application. A cosigner is a creditworthy person who will assume responsibility for the loan if you fail to make the payments. Having a cosigner could help you qualify and get better interest rates on a loan.
Shop around for the best loan rates and terms.

Residency Relocation Loan Payments

Some private residency relocation loans offer deferred payment options with a grace period before you need to begin repaying the loan. Repayment terms for many medical residency loans are 10 years or more. With personal loans, repayment begins immediately. Repayment terms typically range from one to seven years. However, you may be able to borrow more money with a personal loan because these loans have fewer restrictions than private residency relocation loans do.

Pros of Residency Relocation Loans

Provides funds for securing a medical residency
Pays traveling and application expenses
May give you access to quick funding
Personal loans typically have higher borrowing limits and lower interest rates than credit cards
Some private residency relocation loans offered deferred payment options

Cons of Residency Relocation Loans

Increases the amount of debt a borrower has
May require a cosigner
Monthly payments may be hard to manage, especially if there is no deferment period
There may be fees on the loan, such as an origination fee

Personal Loans With Lantern

There are several ways to cover the costs of a medical residency, including private residency relocation loans and personal loans. With personal loans, the eligibility requirements are not usually as strict as they are with residency relocation loans, and the loan amounts are typically higher.If you’re interested in exploring personal loan options to help pay for residency expenses, Lantern by SoFi can help make the process easier. By filling out one simple application, you can quickly compare rates and terms from multiple lenders to find the best loan for your needs. Prepare for your medical residency by comparing personal loan options with Lantern.

Frequently Asked Questions

What are residency relocation loans?

Can you use a personal loan for residency relocation?

What are your options for financing residency relocation?

iStock/FatCamera

LCPL0822010

About the Author

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.

Share this article: