Can you take out a private loan for living expenses during residency?

[Poit]

If you want to do residency in NYC, can you take out a private loan to be able to have more of a financial cushion? I know, I know, "That's not financially responsible, bro - you need to live like a hermit on ramen and ketchup for 4 years.". It's a cost benefit analysis - I'd rather have a more tolerable quality of life now at the expense of a minimally reduced quality of life later.

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[DBV]

Not sure what you want here. Yes NYC is in America which is a free country and you are free to make dumb decisions. If you're looking for validation my guess is that would be few and far between.

 

[Poit]

Not sure what you want here. Yes NYC is in America which is a free country and you are free to make dumb decisions. If you're looking for validation my guess is that would be few and far between.

How is it a dumb decision to choose to pay back 220 k instead of 200 k in (principal) debt so that you can have an extra 5 k/year, when you will be making 300 k in 5 years time? Not looking for validation, I'm just wondering if a bank would approve such a loan.

 

[zanzizic]

“Financial cushion” is a poor choice of words. You’re considering borrowing for a higher standard of living. That’s just a bad idea.

Don’t do it. You’ll be so glad you didn’t when residency is done.

 

[Poit]

“Financial cushion” is a poor choice of words. You’re considering borrowing for a higher standard of living. That’s just a bad idea.

Don’t do it. You’ll be so glad you didn’t when residency is done.

In NYC, 50 k doesn't get you very far. It absolutely is a cushion. How is it a bad idea to choose to pay back 220 k instead of 200 k in (principal) debt so that you can have an extra 5 k/year during residency, when you will be making 300 k in 5 years time? While I appreciate your input (that you have managed to convey without being condescending), I'm just wondering if a bank would approve such a loan.

 

[Poit]

I'd appreciate if somebody could just let me know if a bank would approve this type of loan without offering a knee-jerk response under the assumption that I'm a young, naiive med student with no financial sense, when many of us are actually older with many years of experience in the "real world", and who do understand the concepts of cost/benefit analysis and compounding interest.

 

[ndafife]

If its a private student loan you're not going to be able to take out more than the COA your school provides.

If you're talking a personal loan, good luck. You're someone without a)collateral, or b)income. Youre probably going to have to start making loan payments on a personal loan before youre done with school, and youre probably going to just get reamed with that interest rate.

 

[zanzizic]

I’m not sure if you could get a loan for this. What are you going to tell the bank the money will be used for? I doubt they’ll want to provide a loan to fund a higher standard of living. Especially if you have no collateral to offer them in case of default. If you already have $200k in student loans I assume you have a negative net worth.

Credit cards might be your best bet but with the ultra high interest rates they charge it would be a terrible trade off.

 

[Poit]

I’m not sure if you could get a loan for this. What are you going to tell the bank the money will be used for? I doubt they’ll want to provide a loan to fund a higher standard of living. Especially if you have no collateral to offer them in case of default. If you already have $200k in student loans I assume you have a negative net worth.

Credit cards might be your best bet but with the ultra high interest rates they charge it would be a terrible trade off.

Okay, thank you. Sounds like it isn't really feasible.

 

[Giovanotto]

What about this? Medical Residency Relocation Loans | Discover Student Loans

 

[trobinsonmd]

If you want to do residency in NYC, can you take out a private loan to be able to have more of a financial cushion? I know, I know, "That's not financially responsible, bro - you need to live like a hermit on ramen and ketchup for 4 years.". It's a cost benefit analysis - I'd rather have a more tolerable quality of life now at the expense of a minimally reduced quality of life later.

I'm living in NYC right now and you're right in that 50k doesn't get you very far... I live a few blocks from NYU cuz its convenient and my studio is almost $4000... I've heard of a few residents trying to get loans for living expenses, but none had any success. Not sure where you're doing your residency, but if it's at NYU, I would honestly just live across the East River and take the ferry, you'd save a lot of money. If you're at Columbia, just live a little more uptown and $50k will take you a lot farther than what it will in the Upper West...

 

[Giovanotto]

I'm living in NYC right now and you're right in that 50k doesn't get you very far... I live a few blocks from NYU cuz its convenient and my studio is almost $4000... I've heard of a few residents trying to get loans for living expenses, but none had any success. Not sure where you're doing your residency, but if it's at NYU, I would honestly just live across the East River and take the ferry, you'd save a lot of money. If you're at Columbia, just live a little more uptown and $50k will take you a lot farther than what it will in the Upper West...

😱😱😱😱😱😱😱😱😱

 

[ortnakas]

I’ve heard of residents doing this in expensive cities like NYC and the Bay Area, so while it’s not the most financially sound choice, it’s not unheard of. Remember that, unlike your med school loans, you would have to start paying this one immediately— it wouldn’t qualify for deferral/income-based plans.

 

[VA Hopeful Dr]

I feel guilty even showing you this since I think this is stupid, but whatever:

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[Redpancreas]

If you want to do residency in NYC, can you take out a private loan to be able to have more of a financial cushion? I know, I know, "That's not financially responsible, bro - you need to live like a hermit on ramen and ketchup for 4 years.". It's a cost benefit analysis - I'd rather have a more tolerable quality of life now at the expense of a minimally reduced quality of life later.

Absolutely not. I would do the opposite. Early money > Later money. Start investing in a Roth IRA.

 

[Money Moniker]

If you want to do residency in NYC, can you take out a private loan to be able to have more of a financial cushion? I know, I know, "That's not financially responsible, bro - you need to live like a hermit on ramen and ketchup for 4 years.". It's a cost benefit analysis - I'd rather have a more tolerable quality of life now at the expense of a minimally reduced quality of life later.

Absolutely not. I would do the opposite. Early money > Later money. Start investing in a Roth IRA.

No doubt. With intensive early investing, you can live like a king in your 70's and get yourself a pimped-out tombstone to boot. All at the amazingly low price of wasting the prime of your life. What a deal!

 

[Redpancreas]

No doubt. With intensive early investing, you can live like a king in your 70's and get yourself a pimped-out tombstone to boot. All at the amazingly low price of wasting the prime of your life. What a deal!

🙁 😛

 

[Poit]

No doubt. With intensive early investing, you can live like a king in your 70's and get yourself a pimped-out tombstone to boot. All at the amazingly low price of wasting the prime of your life. What a deal!

Somebody gets it. I've talked to my dad, and he says that if you're making good money, as long as you're reasonable with it, you'll end up with more than you know what to do with when you're older. I'd rather have more money when I'm younger. Everyone has their own preference - doesn't mean mine is right or "dumb".

 

[VA Hopeful Dr]

Somebody gets it. I've talked to my dad, and he says that if you're making good money, as long as you're reasonable with it, you'll end up with more than you know what to do with when you're older. I'd rather have more money when I'm younger. Everyone has their own preference - doesn't mean mine is right or "dumb".

It is dumb if you run out of money before you die

 

[Cuongoff]

I'm living in NYC right now and you're right in that 50k doesn't get you very far... I live a few blocks from NYU cuz its convenient and my studio is almost $4000... I've heard of a few residents trying to get loans for living expenses, but none had any success. Not sure where you're doing your residency, but if it's at NYU, I would honestly just live across the East River and take the ferry, you'd save a lot of money. If you're at Columbia, just live a little more uptown and $50k will take you a lot farther than what it will in the Upper West...

How do you afford to live on a residents salary and pay $4000 in rent??

 

[Poit]

It is dumb if you run out of money before you die

Totally agree with you. Good thing I explicitly said "as long as you're reasonable with it".

 

[trobinsonmd]

How do you afford to live on a residents salary and pay $4000 in rent??

technically not living on a resident's salary, I was an econ major in undergrad and did a MS in finance/risk management during my gap year, so I know quite a bit about the stock market and how to invest, most of my income comes from my investments actually

 

[Money Moniker]

technically not living on a resident's salary, I was an econ major in undergrad and did a MS in finance/risk management during my gap year, so I know quite a bit about the stock market and how to invest, most of my income comes from my investments actually

How did you even get the capital to invest though? Unless you're leveraging up like crazy you'd need a portfolio of at least six figures to make a dent in living expenses in any part of the country, let alone NYC.

 

[Redpancreas]

technically not living on a resident's salary, I was an econ major in undergrad and did a MS in finance/risk management during my gap year, so I know quite a bit about the stock market and how to invest, most of my income comes from my investments actually

You're living in NYC so your salary is likely 62K+/-. After taxes, that's a take home per month that's roughly equivalent (if not less) to your stated rent alone. How did you pay for all services/daily expenses to live in one of the most expensive cities in the world which is at minimum $2000/month? You did an M.S. (which also probably had a tuition attached to it) that taught you the tricks of the trade and in one gap year accumulated enough money to grow into a 6-figure portfolio...why not just use initial amount to pay off your loans that are accumulating at 5-6% interest? I feel like something's missing. If this is true, I speculate you had a good sum of money someone else gave to you...not judging.

 

[trobinsonmd]

You're living in NYC so your salary is likely 62K+/-. After taxes, that's a take home per month that's roughly equivalent (if not less) to your stated rent alone. How did you pay for all services/daily expenses to live in one of the most expensive cities in the world which is at minimum $2000/month? You did an M.S. (which also probably had a tuition attached to it) that taught you the tricks of the trade and in one gap year accumulated enough money to grow into a 6-figure portfolio...why not just use initial amount to pay off your loans that are accumulating at 5-6% interest? I feel like something's missing. If this is true, I speculate you had a good sum of money someone else gave to you...not judging.

Firstly, I didn't have loans, I was lucky enough to have a full ride, but even if I did have loans, I wouldn't pay them off if they're at 5% and my investments are at 18-19%... and of course there's some stuff missing, I can't encapsulate my entire financial history in 4 lines on an SDN post lol, I bought crypto before it became a huge thing and sold it pretty close to its peak, I shorted stocks that I knew were going to zero (sears, JCP, gamestop, etc)... so it's not like I just have this account of securities that's slowly growing at x%... and I don't mean to brag, but its a 7 figure portfolio, and I also manage large amounts of money for other people and take a percentage off of that... if you need any advice on how to manage or grow your money, feel free to DM me and we can find something that meets your needs... also didn't know avg for residents here is 62, I'm getting mid 50s sadly

 

[trobinsonmd]

How did you even get the capital to invest though? Unless you're leveraging up like crazy you'd need a portfolio of at least six figures to make a dent in living expenses in any part of the country, let alone NYC.

two different streams... made 20x on the crypto boom and used that for my personal investments, and I also manage other people's money... People don't take a 27 year old very seriously, but when you show them your portfolio performance for the last few years, they throw money at you... I have a lot of friends/family/friends of friends who give me cap to invest on their behalf and I typically take a percentage off the top of that which ultimately is a lot higher than what I make as a resident

 

[trobinsonmd]

two different streams... made 20x on the crypto boom and used that for my personal investments, and I also manage other people's money... People don't take a 27 year old very seriously, but when you show them your portfolio performance for the last few years, they throw money at you... I have a lot of friends/family/friends of friends who give me cap to invest on their behalf and I typically take a percentage off the top of that which ultimately is a lot higher than what I make as a resident

forgot to add, a portfolio of six figures wouldn't be enough to cover living expenses in NYC. Assume 500k at 17%, that's roughly 7000 a month, after taxes, you're barely getting by in NYC... need at least a seven digit portfolio to live comfortably in the nicer parts of town

 

[Poit]

two different streams... made 20x on the crypto boom and used that for my personal investments, and I also manage other people's money... People don't take a 27 year old very seriously, but when you show them your portfolio performance for the last few years, they throw money at you... I have a lot of friends/family/friends of friends who give me cap to invest on their behalf and I typically take a percentage off the top of that which ultimately is a lot higher than what I make as a resident

Why oh why did I not jump on that bitcoin train...

 

[AMEHigh]

Assuming you have decent credit, yes of course you can get a personal loan at anytime for any purpose. My bank and my Amex card offer them to me all the time.

 

[mehc012]

I’m not sure if you could get a loan for this. What are you going to tell the bank the money will be used for? I doubt they’ll want to provide a loan to fund a higher standard of living. Especially if you have no collateral to offer them in case of default. If you already have $200k in student loans I assume you have a negative net worth.

Credit cards might be your best bet but with the ultra high interest rates they charge it would be a terrible trade off.

Eh, if you have good credit you can get a personal loan with very little justification. I actually started building my credit with a personal loan for $3k. Of course, my mother had to cosign because I had no credit history, but we didn't tell them what it was for or give any justification. Just "hey, we want some money" "How much? We approve you for up to $5k with no questions asked." "I need $3k" "Cool, sign here and pay us back over the next x years".

What you probably won't get with that kind of loan is a long-term one the way your student loans are long-term. Depending on how you negotiate to begin with, payments will likely be due sooner and less flexibly than the student loan debt.

 

[Poit]

Assuming you have decent credit, yes of course you can get a personal loan at anytime for any purpose. My bank and my Amex card offer them to me all the time.

Would a credit score of 700 be good enough?

 

[mehc012]

Would a credit score of 700 be good enough?

I think your bigger issue is getting multiple of them, multiple years in a row, while managing not to make payments along the way.

 

[WingedOx]

Going to residency in NYC seems like the first big mistake.

 

[zanzizic]

I changed specialties during my internship and was offered a spot at Cornell to start pgy-2 immediately because they suddenly had funding for a new residency position that wasn’t offered through the Match. But the offer came with the stipulation that they didn’t have any room in their subsidized housing but would probably have room in the pgy-3 year. I ended up turning the position down to go elsewhere because I couldn’t afford to live in NYC.

 

[WingedOx]

I changed specialties during my internship and was offered a spot at Cornell to start pgy-2 immediately because they suddenly had funding for a new residency position that wasn’t offered through the Match. But the offer came with the stipulation that they didn’t have any room in their subsidized housing but would probably have room in the pgy-3 year. I ended up turning the position down to go elsewhere because I couldn’t afford to live in NYC.

A friend of mine turned down a UCSF fellowship for a similar reason. He was paying ~1500 a month for a 1BR, 2 story loft condo steps from the red line in the Loop that came with parking here in Chicago. He would have had to pay WAY more than that and scrounge up a deposit and travel expenses just to go back to living with roommates.

 

[Candidate2017]

How is it a dumb decision to choose to pay back 220 k instead of 200 k in (principal) debt so that you can have an extra 5 k/year, when you will be making 300 k in 5 years time? Not looking for validation, I'm just wondering if a bank would approve such a loan.

An extra $5k a year in NYC or SF usually means the difference between eating name-brand ramen vs. generic ramen on the rare days/nights you aren't working in some hospital located on the forsaken side of town.

 

[Doctor_ruski]

This thread has made me extremely grateful for rent prices/cost of living in the Midwest 😱