Using a Personal Loan for Residency Relocation Costs

January 23, 2019 · 6 minute read

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Using a Personal Loan for Residency Relocation Costs

You’ve survived four years, met the requirements, lost countless nights of sleep, and finally, you get to find out where you’ll start your career as a full-fledged doctor. You rank your top choices for a residency program, go on interviews, and cross your fingers. And then finally, you learn where you matched.

Once the excitement of the initial match wears off, however, reality starts to set in. Because residencies are spread throughout the country, there’s a high likelihood that not only will you be starting a stressful new job; you will also be moving and starting over in a new city.

Moving is stressful enough on its own, but moving at the very end of medical school can feel impossible. After all, new doctors have an average of $183,000 in debt from medical school, and may not have an income until their residency begins. Fortunately, there are solutions to help you move, get settled, and start your residency off strong—without worrying about money.

Residency Relocation Costs

There’s no way around it: Moving is expensive and stressful residency relocation costs can add up. Even if you’re moving to a new house in the same city to be closer to your work, you may need to hire movers or rent a truck, buy boxes, and replace little things like shower curtains and cleaning products that seem to always get lost in the move.

The average move to a new house in the same state costs about costs about $2,300 , and that is not even including the takeout you’ll have to buy your friends as a bribe to help you pack.

If you’re moving out of state, the costs can get even higher, and the logistics more complicated. You may want to hire a moving company to move you to your new state, or rent your own truck and make the long trip yourself. If you’re driving, you’ll need to pay for gas, hotel stays, and meals on the road.

Overall, the average cost of moving out of state is a whopping $4,300 .

But those costs only account for the move itself. The expense of settling into a new city can be even higher. You might need to update your furniture so it fits your new apartment, and you may have to replace all the little things that you need in your first few days in a new place like trash cans, towels, and cooking supplies.

Not to mention the costs of exploring a new city and eating out while you set up your kitchen. And don’t forget any costs you may have to incur for your new job, like clothes, or potentially even transportation costs. Those little expenses can add up to a major headache if you’re not prepared.

If you’re feeling the pinch, there are a few loans specially designed for medical residents that may be worth considering. They could help make your transition a lot smoother.

Home Loans for Medical Residents

As a medical resident, you might qualify for a home loan designed specifically for doctors. These loans can have some big benefits, like low down payments, no requirement for private mortgage insurance, and no rate increases on “jumbo loans.” It’s important to do some research to see how you can qualify for these loans.

Of course, there are things to consider before buying a home during your residency. Even if you qualify for a home loan for medical residents, you might not be ready to buy a home just yet. This is especially true if you’re moving to a new city or state and you want to settle in, find your favorite neighborhood, and make sure you really like the city before deciding to buy a home.

If you do decide to start the home buying process, it’s probably a good idea to check out both traditional mortgages and loans designed specifically for doctors. You won’t know which one is right for you until you compare the benefits of each.

Medical Residency Relocation Loans

One loan new doctors may choose to take out is a medical residency relocation loan. You can take out a residency loan from a private lender—for example, Sallie Mae offers medical residency loans .

Or it could be as simple as taking out a personal loan. Some private lenders may offer student loan-type benefits for their medical residency relocation loans—such as forbearance or a longer loan payoff term. On the other hand, a personal loan may allow you to borrow money, and the application process could be expedited if you’re using a reputable online lender.

Residency loans are specifically geared toward new doctors who are beginning their residencies and need to pay for essentials while settling into a new job and a new city. These loans can allow medical residents to fill the financial gap between graduation and your first residency paycheck.

They can help new residents cover the cost of moving and getting settled in a new city, including providing for your family while you adjust to a new job. Overall, medical residency relocation loans can be a lifesaver for doctors who are stressed about the financial realities of transitioning out of school and into residency.

The loans can be especially beneficial for residents who are married or have a family. If you’re making a move for residency and bringing your family along, it is likely that your spouse will also need to look for a job in your new city—which means that they may be giving up a paycheck temporarily as well.

When both partners transition to new jobs at the same time, there can be a significant gap in income. A medical residency relocation loan can help you maintain your lifestyle while you and your spouse acclimate to new jobs.

Residents notoriously operate on little sleep and a lot of stress. A medical residency relocation loan can help make sure that you’re not stressing about money when you should be focusing on patients and procedures.

If you’re interested, you may want to do some financial housekeeping, including things like checking your credit score, and determining exactly how much money you may need to borrow. Like all loans, consider only borrowing the amount you actually need to tide you over until your residency starts paying.

You can get a good idea of how much you may need to borrow by taking a look at your monthly expenses and then adding any additional cost-of-living increases based on your new city and the cost of moving. Don’t forget to list one-time expenses like a security deposit for a new apartment.

When you’ve figured out how much you want to borrow, take some time to shop around for a loan whose terms work for you. Each lender has different terms and benefits, so make sure to understand them fully before making a decision on if a personal loan is right for you.

Learn more about how a personal loans from SoFi can help you with residency relocation costs and start your residency off on the right foot.

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