Residency & Relocation loans for M4

[Murgency]

Hey!

New here...looking for some thoughts/ideas/alternatives on Residency & Relocation loans.  I'm an M4, just applied thru ERAS and plan to get 10 or so interviews, about half of those will be long-distance trips.

 

Current situation is that pretty much living off student loans as wife is due with baby #1 this month and won't be working for a while.  If I do decide to use such a loan, any good estimates of how much should I anticipate needing if accounting for interview + costs of moving?

 

 

[The White Coat Investor]

Always best to minimize the amount of loans, whether you save up some of your student loans and use those for interviews/moving or whether you take out a new loan. One difference, aside from generally higher rates for residency/relocation loans, is that I don't think they're deductible. Not a big deal, since once you're an attending you can't deduct interest anyway and until that point you can only deduct $2500 a year. Another difference, I don't think these loans are eligible for income driven repayment programs or PSLF. So I'd try to take out a little extra in student loans rather than a whole new loan if I were you. If you get to your first intern paycheck and it turns out you took too much, you can always send it in the the lender as a principle payment and it only cost you a few months of interest.

As far as "how much," that's pretty hard to say. I mean, where are you applying? Are you doing FP, have great numbers, living in New York, and only applying in New York? Well this is going to be very cheap for you. Maybe less than $1000 all in for interviews and maybe a couple hundred bucks for moving if you do it yourself (not counting first and last month's rent and a deposit.)

Doing EM and applying all over the country and potentially moving from one coast to the other? Could be $5-10K.

[Murgency]

Yeah my situation is EM, national average scores, applying to 30 hoping to get ~10 interviews, but 5 or so of those may require long-distance travel to the southeast.  And if I match there that would be a 1300 mile move.

One option is that I have 5k in a 403b I could cash out, as at this point the tuition deductions would wipe out the penalty I believe, at least to me that seems more favorable than adding another separate loan.  I've saved up all my credit card flight points over the past 2 years so I'm hoping to cover about 1/2 the flight costs with those.

[DMFA]

Murgency wrote:

Yeah my situation is EM, national average scores, applying to 30 hoping to get ~10 interviews, but 5 or so of those may require long-distance travel to the southeast.  And if I match there that would be a 1300 mile move.

One option is that I have 5k in a 403b I could cash out, as at this point the tuition deductions would wipe out the penalty I believe, at least to me that seems more favorable than adding another separate loan.  I’ve saved up all my credit card flight points over the past 2 years so I’m hoping to cover about 1/2 the flight costs with those.

Click to expand...

Don't cash out your 403(b)...while obv it's less than ideal, you're *probably* better off adding to your student loans to cover these expenses than taking out a new personal loan, which may have less favorable terms (not eligible for income-driven repayment and interest subsidy like RePAYE, not forgivable with PSLF, even higher interest than your federal student loans, etc).  Just do your best to minimize expenses.

[adventure]

Murgency wrote:

Hey!

New here…looking for some thoughts/ideas/alternatives on Residency & Relocation loans.  I’m an M4, just applied thru ERAS and plan to get 10 or so interviews, about half of those will be long-distance trips.

 

Current situation is that pretty much living off student loans as wife is due with baby #1 this month and won’t be working for a while.  If I do decide to use such a loan, any good estimates of how much should I anticipate needing if accounting for interview + costs of moving?

 

 

Click to expand...

1. I hope you get more than 10 interview offers... Not that you'd go to all of the offers, but I'd think you need 10 to rank, at minimum. Too risky not to match. Consider applying for more programs if this is the case.

2. Deal with the moving later (aka April/May). Don't estimate it now, and certainly don't take moving money loans now. Once you match, then you can be more precise and apply then.

3. Can you group any together based on date? Can you stay with residents and/or friends in said cities? Can they feed you? Can you attend any social functions/dinners to get fed? Do you need a suit too? Can you take out more student loans? Can you figure out out the public transportation instead of car rental? Do you have any classmates going to same interview dates? Can you carpool with them? ... If you can plan ahead a bit, you might be able to get cheaper flights. (and consider Southwest, where you can cancel and use the credit on other flights, in case you get an offer later at a better program, and you want to switch!)

4. Make a mock budget (e.g. Seattle: 450 flight. 250 hotel, 75 meals, 150 car) or (e.g. Seattle: $51 on Spirit, 0 at resident/friends house, 20 meals, $10 for bus/streetcar pass). I'd do that exercise for your planned interviews, and add it up.