Personal loan. Advice?

[Peppers00]

Hi,
I'm in my last year of residency but likely will do 2 year fellowship with one year gap in between. I luckily don't have student loans but I don't have any savings and recently have had to take out a personal loan of $50,000 for unexpected family reasons that requires cash. Interest rate is close to 7%. I'm planning on moonlighting soon and hoping to pay it off completely within a year. Is this plan feasible and what else would you have recommended for someone in my position with unexpected expenses but no savings?

[VagabondMD]

You did what you had to do. Since it was for a family crisis, I might have gone to a different family member for the loan. If you owned a house or condo, you might have been able to borrow against home equity. It sounds like you have plans to pay it off quickly and will not be harmed in the long run.

This anecdote demonstrates the value of having an emergency fund-- and also convincing your family members to have one, too!

[Donnie]

Pay it off as fast as you can.  If you absolutely need money and don't have it, a loan is really your only option.  If it is an unsecured personal loan, it is unlikely you are going to get a loan much lower than 7%.

To Vagabond's point, this demonstrates the value of having an emergency fund.  Unfortunately the people who most need it (i.e. people with limited assets, and a lack of significant income) are the ones that can't build one up.

[Peds]

wait what is a gap year between a fellowship?

but yea, pay it off, save up so you never have to do that again.

[adventure]

Peds wrote:

wait what is a gap year between a fellowship?

Click to expand...

Peppers00 wrote:

I’m in my last year of residency but likely will do 2 year fellowship with one year gap in between.

Click to expand...

So, it'll be 4 MORE years before you get the attending paycheck? Is the quality of life, future financial picture, scope of practice, ability to research/teach/administrate/see patients, fun in fellowship really worth given up that much income? I'd expect a really compelling argument to pursue such a plan.

[q-school]

adventure wrote:

Peds wrote:

wait what is a gap year between a fellowship?

Click to expand…

Peppers00 wrote:

I’m in my last year of residency but likely will do 2 year fellowship with one year gap in between.

Click to expand…

So, it’ll be 4 MORE years before you get the attending paycheck? Is the quality of life, future financial picture, scope of practice, ability to research/teach/administrate/see patients, fun in fellowship really worth given up that much income? I’d expect a really compelling argument to pursue such a plan.

Click to expand...

who can answer that question?  at his age i would have said definitely.  now, i say who knows?  ten years from now?  maybe back to definitely.

[adventure]

q-school wrote:

who can answer that question?  at his age i would have said definitely.  now, i say who knows?  ten years from now?  maybe back to definitely.

  Click to expand...

Well said.



Mostly rhetorical questions. Would I do a 3 year fellowship in retirement? Probably. Might be kind of fun.

[Peppers00]

For the curious among you : the "gap year" is a year where i'll be working as an attending. I am planning on living the lifestyle of a resident during that year and use the extra income to pay off debt. I'm set on doing a fellowship butat the same time the debt is making me so uneasy that the best compromise I could think of is this "gap year".

[Hank]

Will you make more money after the fellowship than before?  If so, then you're trading a working year of your life at the higher post fellowship level for a full year working at the lower post residency level.  Unless the difference in pay is tiny, you'd be better off to press on through with training and spend more working years being compensated at the higher rate.  (If the difference in pay is negligible, then why spend three years of your life on the fellowship?)