Residency loans?

[fute]

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HI,
I am wondering what a residency loan is for? I am applying now for a graduate school loan and will apply to medical school next year after I complete my Master's degree. I am a non-traditional student and noticed this type of loan listed on MEFA.org, a loan application website.
I thought that during a residency the following happens:
The med student graduates from medical school as a doctor or physician, then the graduate applies for various residencies through an application matching service similiar to AAMCAS for med school.
Once accepted, the resident is paid a salary of around $40,000 for the period of the residency lasting for three to six years? A the completion of this some do a fellowship and then become full time and PAID physicians. However, I have noticed a scale for physicians where it appears one will "top out" in pay after say 8 to 10 years.

Please tell me if I am dreaming and walk me through the procedure following graduation from medical school all the way to becoming a fully paid physician. Also, why do a fellowship? What is the need for this?

I am trying to figure out the total cost and best way to pay it back, such as begin during residency paying off loans, somebody please walk me through as I am a little confused. I thought I had this thing figured out, thanks.

 

[Winged Scapula]

A residency loan is offered to final year medical students who need extra money to apply for residency (you can spend upwards of $5K in application and interview travel fees).

While you do not have to start paying back your medical school loans during residency, some do; most do not have the discretionary income to do so. If you consolidate at a very low rate, it might not make sense to pay back loans sooner than they are due if you have the funds invested in higher earning accounts elsewhere.

Finally, a fellowship affords someone extra training in the field of their choice. People do fellowships for lots of reasons: marketability, interest in pursuing a narrower field, increased job oppportunities, etc. It is not required to do a fellowship after residency.

 

[Dr Serenity]

A residency loan is offered to final year medical students who need extra money to apply for residency (you can spend upwards of $5K in application and interview travel fees).

While you do not have to start paying back your medical school loans during residency, some do; most do not have the discretionary income to do so. If you consolidate at a very low rate, it might not make sense to pay back loans sooner than they are due if you have the funds invested in higher earning accounts elsewhere.

No disrespect intended, but the above bolded statement is not true for all residents. I don't remember all the specifics, but to qualify for residency deferment, your debt/income ratio has to be above a certain threshold. Otherwise, you're stuck with either forbearance or making payments on the loan(s). Plus, it depends on the source of the loan as to what repayment terms are.

 

[yadayadadude]

Plus, (economic hardship) residency deferment may be going away. It's been reinstated for this year, but after that, it's anyone's guess.

Also, "consolidating at a low rate" is pretty much a thing of the past too. Now we have fixed rates: 6.8% for Staffords and 8.5% for GradPlus.

 

[angel80]

Even if you don't qualify for economic hardship deferment, you don't have to start paying of your loans during residency. You can always apply and qualify for forbearance.

 

[fute]

Thanks for clearing that up!

 

[Dr Serenity]

Even if you don't qualify for economic hardship deferment, you don't have to start paying of your loans during residency. You can always apply and qualify for forbearance.

Don't lenders / US Gov't only allow for three years of forebearance before you must start paying off loans, (or does the three year rule apply for economic hardship deferment before you have to go into forebearance or start paying off loans)?

 

[Winged Scapula]

Don't lenders / US Gov't only allow for three years of forebearance before you must start paying off loans, (or does the three year rule apply for economic hardship deferment before you have to go into forebearance or start paying off loans)?

I had assumed that the OP would qualify for economic hardship and if not, or if past the time frame allowed for such, would qualify for forebearance. I do not know the rules on how long you can be in forebearance before they require you to start paying off the loan.

 

[Winged Scapula]

No disrespect intended, but the above bolded statement is not true for all residents. I don't remember all the specifics, but to qualify for residency deferment, your debt/income ratio has to be above a certain threshold. Otherwise, you're stuck with either forbearance or making payments on the loan(s). Plus, it depends on the source of the loan as to what repayment terms are.

True, but most would have Stafford loans which have the same repayment terms and almost all residents will qualify for a deferment for at least the first year, if not the first 3.

 

[fantasty]

BUMP (and please don't move to financial aid because I'd like to hear from M4's and residents)...

I'd like to apply for a residency loan but my credit sucks (long story, not worth sharing). My financial aid office has a list of lenders who offer residency search / relocation loans (which I'll post below). But, do you know if any allow co-signers? I think that'll be the only way I'll be approved.

 

[fantasty]

Med Loans medex 800-858-5050 aamc.org/medloans

MedAchiever 800-540-1855 www.key.com/educate/grad

Medical Access Group 1-800-282-1550 www.accessgroup.org

Bank of America Residency Loan 1-800-344-8382 www.bankofamerica.com

Educated Borrower 1-800-334-4480 www.educatedborrower.com

Med Funds 1-800-661-5089 www.medfunds.com

GMAC Bank 1-800-500-9876 ledloans.gmacbank.com

Student Loan xpress 1-888-274-0398 www.studentloanexpress.com

CitiAssist 1-866-515-8352 www.student loan.com/health

Loans Below require prior borrowing relationship

Health Degree Extra 800-243-7552 www.studentloan.org

MedCap xtra 800-658-3567 www.wellsfargo.com

 

[zinjanthropus]

BUMP (and please don't move to financial aid because I'd like to hear from M4's and residents)...

I'd like to apply for a residency loan but my credit sucks (long story, not worth sharing). My financial aid office has a list of lenders who offer residency search / relocation loans (which I'll post below). But, do you know if any allow co-signers? I think that'll be the only way I'll be approved.

You can do a med student loan up to 40K with a co-signer through Chase
http://www.educationone.com

 

[CorpusERdoc]

HI,
I am wondering what a residency loan is for? I am applying now for a graduate school loan and will apply to medical school next year after I complete my Master's degree. I am a non-traditional student and noticed this type of loan listed on MEFA.org, a loan application website.
I thought that during a residency the following happens:
The med student graduates from medical school as a doctor or physician, then the graduate applies for various residencies through an application matching service similiar to AAMCAS for med school.
Once accepted, the resident is paid a salary of around $40,000 for the period of the residency lasting for three to six years? A the completion of this some do a fellowship and then become full time and PAID physicians. However, I have noticed a scale for physicians where it appears one will "top out" in pay after say 8 to 10 years.

Please tell me if I am dreaming and walk me through the procedure following graduation from medical school all the way to becoming a fully paid physician. Also, why do a fellowship? What is the need for this?

I am trying to figure out the total cost and best way to pay it back, such as begin during residency paying off loans, somebody please walk me through as I am a little confused. I thought I had this thing figured out, thanks.

Most residency loans are to fill the gap until you start making your first paycheck or for moving expenses. THE (northstar.org) has a Residency & Relocation Loan for that purpose. I qualified for up to $20k with that loan.

As far as repaying loans --

As of today, you can defer your loans (economic hardship deferment) for 3 years of residency. After that time, you can enter forbearance for up to 3 years. During year 7, you will then enter repayment for your loans if you are still in residency/fellowship.

Some can be repaid during residency---especially if you are moonlighting. Most do not, however.

A fellowship is used to become a subspecialist. For example, as an internal medicine trained physician, you can do a fellowship to become a cardiologist, gastroenterologist, etc.