Residency loans: what they are and how to manage them
What “residency loans” actually means
People search “residency loans” and “medical residency loans” for two different needs. One is new borrowing to bridge the gap between Match Day and your first paycheck — moving costs, board exams, deposits. The other is handling the six-figure student-loan balance you already have now that you’re finally earning (a little). This guide covers both, because the right move depends on which one you mean.
Relocation loans for residency
A residency relocation loan is a private personal loan marketed to new residents to cover moving, exam, and start-up costs before your salary kicks in. They’re convenient but carry private interest rates and aren’t eligible for federal protections or forgiveness, so they should be a last resort after savings, a 0% credit-card window you can pay off, or a modest amount you can clear quickly. We cover who offers them, typical costs, and the risks in the dedicated guide: residency relocation loans.
Managing your student loans during residency
This is where residents leave the most money on the table. On an income-driven plan, your federal student-loan payment is based on your resident income — often a few hundred dollars a month, sometimes near zero in early training. Crucially, those low-payment months still count toward PSLF if you work for a qualifying nonprofit or government employer, which describes most residency programs. Three to seven years of cheap, qualifying payments is the single biggest reason PSLF works so well for doctors.
The strategy in one line: get on the right income-driven plan early, certify your employer, and let the PSLF clock run while your payments are smallest. See the full playbook in our resident student loan strategy guide and how PSLF works for physicians.
Which plan during residency?
| Plan | Fit for residents |
|---|---|
| IBR | Usually the durable choice — low income-based payment, PSLF-eligible, and not affected by the 2028 phase-out of older plans. |
| RAP (new) | Worth comparing — waives unpaid interest, which protects your balance during low-income years. |
| Standard | Rarely right in residency; the fixed payment is high relative to a resident salary and isn’t optimized for forgiveness. |
After the SAVE plan was struck down, the realistic choice is IBR vs. RAP. Run both on your numbers before you pick.
What to avoid in residency
Don’t sit in a forbearance that doesn’t count toward PSLF, don’t consolidate without a specific reason, and don’t refinance federal loans to a private lender while you’re still building PSLF credit — refinancing is a one-way door that forfeits forgiveness and federal protections. If you’re not pursuing PSLF and have a manageable balance, refinancing late in training can make sense, but confirm it on your numbers first.
Frequently asked questions
What are residency loans?
The term usually means one of two things: a private relocation or personal loan to cover the cost of starting residency (moving, board exams, deposits), or managing the federal student loans you already have on a low resident salary. The strategies are different, so it helps to be clear which you mean.
What is a medical residency loan?
Most often it refers to a residency relocation loan — a private personal loan that helps new physicians cover moving and start-up costs before their first paycheck. It can also refer to handling existing medical-school student loans during residency through an income-driven plan.
Can residents get loans during residency?
Yes. Residents can take private relocation or personal loans, and many keep their federal student loans in income-driven repayment at low monthly payments. Borrow new money cautiously; private residency loans carry interest and no federal protections.
How much are student loan payments during residency?
On an income-driven plan, payments are based on your resident income, so they are often only a few hundred dollars a month and sometimes near zero early on. Those months still count toward PSLF at a qualifying employer.
Should I take a relocation loan for residency?
Only after cheaper options — savings, a 0% card you can pay off, or a small amount you can clear quickly. Relocation loans are private, carry interest, and have no federal benefits, so keep the balance small and the payoff fast.
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