Medical Residency and Relocation Loans

By Edvisors Network

Updated on October 17, 2022

Medical Residency Loans

Once you’ve graduated medical school, you will need to complete your internship and residency. Chances are, you may be low on funds to cover expenses like relocation, housing, and other living expenses. There are no federal student loans available to cover expenses related to medical residency and relocation, however, many private lenders offer medical residency and relocation loans specifically for this purpose.

What Is a Residency and Relocation Loan

According to the Association of American Medical Colleges, students spend between $1,000 and $11,580 on residency interview costs alone, with a median spend of $4,000.

A residency and relocation loan can help cover these costs in addition to costs associated with exam prep, relocating, and living expenses such as housing, transportation, groceries and more.

Best Private Student Loans for Medical School

Cosigner Recommended

Recommendation

Best for Private Loans

Repayment Terms

10-15 Years⁶

(undergraduate)

Interest Rates

Variable Rates: 5.99% APR - 16.33% APR¹

Fixed Rates: 4.50% APR - 14.83% APR¹

Apply Now More Info

Variable Rates: 5.99% APR - 16.33% APR. Fixed Rates: 4.50% APR - 14.83% APR. Lowest rates shown include 0.25% interest rate discount with auto debit payments.¹
Apply online in minutes and receive an instant credit result²
Multiple repayment options from in-school payments to deferred.¹ No origination fee or prepayment penalty³
Last year, students were 3x more likely to be approved with a cosigner⁴ and it may help you get a better rate.
Borrow up to 100% of school-certified expenses, whether you're online or on campus⁵

Borrow Responsibly

We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Students and families should evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.

Loans for Undergraduate & Career Training Students are not intended for graduate students and are subject to credit approval, identity verification, signed loan documents, and school certification. Student must attend a participating school. Student or cosigner must meet the age of majority in their state of residence. Students who are not U.S. citizens or U.S. permanent residents must reside in the U.S., attend school in the U.S., apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident), and provide an unexpired government-issued photo ID. Requested loan amount must be at least $1,000.

¹Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment.

²In 2022, instant credit decisions were provided to 97.8% of applicants. Other applications typically received credit decisions in 3 to 5 business days.

³Although we do not charge a penalty or fee if you prepay your loan, any prepayment will be applied as outlined in your promissory note-first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.

⁴Based on the percentage of borrowers who were approved for an undergraduate loan with a cosigner compared to the percentage of borrowers who were approved for an undergraduate loan without a cosigner from October 1, 2021 through September 30, 2022.

⁵ For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website may be subjected to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time.

⁶ Examples of typical costs for a $10,000 Smart Option Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment may receive a loan term that is less than 10 years.

Information advertised valid as of 05/25/2023.

SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SALLIEMAE.COM FOR THE MOST UP-TO-DATE PRODUCT INFORMATION.

Smart Option Student Loans® are made by Sallie Mae Bank. Sallie Mae, the Sallie Mae logo, and other Sallie Mae names and logos are service marks or registered service marks of Sallie Mae Bank. All other names and logos used are the trademarks or service marks of their respective owners.

Edvisors is not the creditor for these loans and is compensated by Sallie Mae for the referral of Sallie Mae loan customers.

Best Residency Relocation Loan

Each lender has their own terms and conditions when it comes to their residency and relocation loans, but here are some common features:

Borrow up to $30,000, depending on the lender
Cover expenses related to medical residency, relocation, board exam prep, transportation, living expenses, groceries and more.
Up to a 15 or 20-year repayment term, with no prepayment penalties
Payments may be deferred for up to 7 years during the residency
Cosigner release option may be available after 12 to 48 consecutive, on-time payments
Fixed or variable interest rates are available

Sallie Mae^® Medical Residency and Relocation Loan

Sallie Mae allows you to borrow up to $30,000 with their Medical Residency and Relocation Loan. These funds can be used to help you pay for your board exam fees, transportation, and living expenses. Fixed and variable rate options are available, and repayment terms can be flexible. If needed, you do have the option to apply with a cosigner.

Eligibility Requirements for Medical Residency Relocation Loans

Medical residency and relocation loans are available to medical students who meet the following criteria:

In their final year of medical school
Have graduated within the last 12 months

Since residency and relocation loans are private student loans, they have the same eligibility requirements as most other private student loans:

You must be a U.S. citizen or permanent resident, or a creditworthy cosigner who is a U.S. citizen or permanent resident will be required.
If you are the sole applicant, you must have reached the age of majority in your state of residence. If you do not meet the age of majority requirements in your state, a creditworthy cosigner will be required.
You must satisfy the credit criteria as required by your potential lender. If you cannot meet the credit criteria, you will need a creditworthy cosigner.

Medical Residency and Relocation Loan FAQ

Can a federal student loan be used to help cover residency or relocation costs?

Unfortunately, there are no federal student loan options available to cover residency or relocation costs, meaning you may not borrow any new federal loans to cover these expenses. However, if you have any unused federal student loan funds you can use those funds towards residency relocation.

How much should I borrow in medical residency relocation funds?

You may be able to borrow up to $30,000. But you may not need this much. Anytime you are using loan funds to help you fund your education, you should borrow only what you need. You don’t want to end up with an unmanageable amount of debt.

Before you borrow funds, make sure you create a budget and outline how you will manage the funds you receive. Many lenders don’t charge prepayment penalties, but make sure you double-check the terms and conditions of your loans.

When should I apply for a residency loan?

You can apply for a residency loan within your last year of medical school, or within 12 months of graduation. You should apply as soon as you realize you will need additional help to cover the costs.

What is my interest rate going to be?

Your interest rate will be determined by your creditworthiness; either yours alone or with a cosigner (if applicable). Once you have selected a lender, they can give you additional insights on your projected rates.

The interest rate may be fixed or variable. A fixed rate remains unchanged for the life of the loan. A variable rate changes periodically, typically on a monthly or quarterly basis.

When a variable rate changes, your monthly payments may increase or decrease.

Can I borrow a residency location loan with bad credit?

If you can find a strong creditworthy cosigner, you may still be eligible to borrow a residency relocation loan. If you need a cosigner to qualify, you may want to find a medical residency relocation loan which has a cosigner release option.

What is the difference between a residency relocation loan and a personal loan?

While these are both unsecured debts, they are a bit different in their purpose.

Medical residency loans are specifically for students in their residency with features and eligibility requirements that are similar to medical school loans.
Personal loans can be borrowed for a variety of reasons, and they don’t offer the same type of deferment opportunities as medical residency loans.

Medical School Loan Repayment During Residency

Your medical school loans will enter repayment six months after your graduation from medical school. You may have an option to postpone making payments during your residency, but these loans will continue to accrue interest during that time. We recommend making payments during residency to prevent interest from accumulating. If you have federal student loans, you may be eligible for payment postponement using a forbearance. Contact your loan servicer to determine your options.

Medical School Loan Refinance

Another option is medical school loan refinance. Some student loan refinance lenders offer the ability to refinance your student loans while you’re still in residency. Student loan refinancing may make your loans more manageable. Refinancing allows you to potentially achieve the following: