Posted by: theparamount | June 23, 2012

End of Medical School to Start of Residency: Money Options

As I begin my orientation and subsequent leap into the depths of a surgical residency, let me explain the problems that most medical students go through from the end of rotations to the beginning of residency.  Most medical students while taking out 200k+ of loans during their medical school tend to not have enough money to survive from early May to mid July when they ultimately get their first paycheck.  The reason being 2 fold.  First off, the disbursal of your last loan becomes early in time than previous disbursals, because the school year changes from a 10 month school year in 1st/2nd year to a 12 month school year in 3rd/4th year.  Also your 4th year tends to start a even earlier if your school uses 4 week rotation blocks because as we all know 12 x 4 = 52 48, thus leaving us with an extra 4 weeks.  Secondly, paying for ERAS (electronic residency application service), Level 2 (or Step 2 for you MD’s), travel for away rotations and travel for interviews is quite daunting.  Then you add in moving to your residency spot, etc.  GREAT sample calculation below.

Quick Scenario Calculation:

ERAS (Ex: 12 programs x 2 specialties) = $75+$8+$8+$75+$8+$8 = $182
Level 2 CE = $520
Level 2 PE = $1150
Two Away Rotations = ~$1000
7 Interview Flights = ~$300*7 = $2100
7 Interview Hotels = ~$100*7 = $700
7 Interview Travel Other =~$100*7 = $700
Moving to a new location = ~$1500
New Security deposit, furniture, changing car plates, changing insurance, etc = ~$1 million dollars (ish)

As you can see, it sucks.  Anyways, here’s the point of this post: How do you make money stretch for 1.5-2 months?

Options:

  1. Mom and Dad – you love them, call them weekly, drop hints starting in January, visit home a couple times, they give you $XXXX.  Oops your parents don’t love you, or they say “we’ve spent enough on you already”. On to step 2…
  2. You have a girlfriend/boyfriend that still works.  Congrats to you, I wish we were all so lucky. On to step 3 for those without love…
  3. Get a Residency Relocation Loan.  What is that you say?  You already have 200k in loans… that okay, somebody is still willing to give you more.  Hopkins has a great website for Residency Relocation Loans.  These loans are generally only used for “travel and relocation”.  But we all know that means, somebody wants a new “Smart” LED 78″ Samsung TV.  The great thing about these loans though is that they generally have the same APR (credit check dependent) as a Grad PLUS loan but the grace period is 36 months after you graduate for MD’s or DO’s.  And they have the benefit of possibly being delayed for 60 months if you qualify for a residency forbearance after those 36 months are up.  Granted a $10000 loan now may be $13000 after 36 months, but sometimes you need money now and it’s worth more now than that extra $3000 in the future.  There is some Economic term I learned in Mr. L’s economics back in 11th grade but the term is eluding me.  A couple other benefits are most don’t have origination or repayment fees.
  4. Get a credit card with 0% APR and 0% balance transfers.  There are a bunch of credit cards offering 12-21 months of 0% APR on all purchases and balance transfers.  These credit cards can be found with a simple google search for “0% APR Credit Card”.  Although if you’d like me to point you in the direction so someone can earn some affiliate dollars off of you here you go:  CreditCards.com 0% APR.  In my opinion, you get the longest deal possible and then you can slowly pay off your credit card with minimum payments then larger payments.  This is my favorite option and is solid for someone who has decent credit and not alot of current credit card debt.  Check your credit worthiness at Credit Sesame.
  5. Or be responsible and save enough money over 4 years to survive.

 

If you have any other suggestions, I’d love to hear them in the comments section.  Thanks for reading.


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