SoFi

If you’re getting divorced, you are going through a major upheaval on many fronts, including your financial life. You may wonder (and worry) about how your debt will be managed. For instance, will you wind up responsible for what your soon-to-be former spouse owes?

While the following information can’t take the place of consulting an attorney, it can help answer some of the most commonly asked questions as you navigate the divorce process. You’ll learn smart strategies for managing your debt as you move through your divorce.

Community Property vs Common Law Property Rules

First things first: Know that states generally follow either community property rules or common law property rules.

Community property states include:

•   Arizona

•   California

•   Idaho

•   Louisiana

•   Nevada

•   New Mexico

•   Texas

•   Washington

•   Wisconsin.

•   If you live in Alaska, you are in what’s known as an “opt-in state.” You and your spouse may have signed an agreement making your assets community property, but if you didn’t sign this agreement, Alaska follows common law property rules, as does every other state excluding the nine states that adhere to community property law.

If you live in a state where community property laws apply, both spouses are typically responsible for debts incurred while married. In fact, most debts are considered to be the responsibility of the “community” (the two married partners) even if only one of them signed the paperwork.

After a legal separation takes place, debt in these states is typically owed only by the person who took on that debt. Exceptions are made if the debt was taken on, pre-divorce, for the following reasons:

•   To maintain a joint asset, such as a new HVAC system on a home

•   To purchase family necessities

•   Or if the couple keeps joint accounts.

But what if one or both members of a married couple took out student loans before the marriage? In this case, the debt very well might not be considered part of community debt, although it could if the spouse signed on as a joint account holder.

If your state follows common law for property, debts taken on by one spouse are, typically, solely that person’s debts. Exceptions can include ones that benefit the marriage, such as childcare, food or clothing, and shelter or household items considered necessary.

Both parties are typically responsible if they both signed a contract agreeing to make payments, or if both names are on a property title to property or a shared account. This can also be true if both spouses’ income was considered when a creditor was making a lending decision.


💡 Quick Tip: A low-interest personal loan can consolidate your debts, lower your monthly payments, and help you get out of debt sooner.

End of Debt Accrual

When two people decide to go their separate ways, a crucial question to have clarified is when, exactly, during the separation/divorce process will you stop incurring marital debt in your state? In California, as one example, a person stops being responsible for his or her spouse’s debt on the date they separate. Every state is different so it is best to consult with an attorney.

Note that, even though state law may draw the line on your liability for a spouse’s debts because of separation or divorce considerations, creditors may still have a legitimate case for pursuing payment from you if repayment of the debt falls behind.

Plus, let’s say that according to the divorce decree, your soon-to-be ex-spouse will be responsible for payments made on a credit card. If your name is on that credit card, the court would order your ex-spouse to make payments. However, if he or she doesn’t actually make the payments on time, it can still affect your credit in a negative way.

Talk to your attorney about options available to get your name off of any accounts with debts assigned to your ex-spouse, including having your ex-spouse refinance a loan so that it is solely in his or her name. You and your ex-spouse could agree to each ask creditors to remove one another’s names according to the dictates of the divorce decree.

Recommended: Budgeting Tips for Life After Divorce

Additional Considerations

Courts may assign debts that are considered necessities to the party believed to have the ability to pay them. This may or may not be divided equally, especially in common law property states where the goal is equitable division, rather than equal division of property.

•   No matter which one of these legal structures your state follows, debt typically follows the asset. In other words, if you get a car, you’ll probably also be responsible for paying it off. This also means that, if you end up with more property than your ex-spouse after the divorce, you may be taking on a greater percentage of the debt.

•   If you and your spouse signed a prenuptial or postnuptial agreement that lays out division of debt in case of divorce, your situation probably won’t mirror the typical divorce in your state.

•   Because laws about divorce and debt responsibility differ by location, it’s important that you hire an attorney who is experienced in the laws of your state. Some couples find that using a mediator to amicably divide debts and assets is preferable to having a judge make the calls. Some mediators are also attorneys, which can be helpful.

Managing Debt After a Divorce

The cost of divorce, emotionally and financially, can be significant. Once the dust clears after a divorce, you’ll need to take stock of what you owe, balance-wise, and what monthly payments you are responsible for. You may discover that payments are higher than what you can comfortably afford each month, now that you’re only relying upon just one income.

In that case, are there any loans that you can pay off and still have enough of a savings cushion in the bank? You might, for example, have a loan with a relatively high monthly payment but, if you only have a few payments left, paying off the loan may help. Or maybe you can draw from savings to finance the fees related to divorce.

If not, you might consider consolidating your high-interest credit cards and loans into one payment through a lower-interest personal loan. Consolidating debt with a personal loan could significantly free up cash flow, right when you need it after a divorce.

Recommended: How to Use a Personal Loan for Loan Consolidation

Paying Off Debt With a SoFi Personal Loan

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This article is not intended to be legal advice. Please consult an attorney for advice.

SOPL1223007

It’s no secret that many Americans are carrying high-interest debt. Cumulative credit card debt passed the $1 trillion mark in the second quarter of 2023, a new record, and the average person is toting around almost $8,000 in debt.

These are daunting figures, to be sure, and for those who are living paycheck to paycheck, without money in the bank, getting debt-free can feel like an impossible dream.

But it doesn’t have to be. There are ways to wrangle what you owe into submission, such as budgeting well and snagging lower interest rates. Read on to learn some effective tactics for paying down and then paying off your debt.

Begin by Creating a Budget

Note that this is suggestion #1. A budget is key to paying off debt when you don’t have a lot of money, because it gives you a bird’s-eye view of how much income you are bringing in and how much you are spending (and where).

Living day to day and not knowing where your money is unlikely to be a good debt payoff path. When you see your spending habits on a monthly spreadsheet, it can be a powerful revelation. You’ll probably realize things about your finances that you never knew before.

There are many different budget methods. One of the most popular is the 50/30/20 budget rule, which helps you allocate 50% of your take-home pay to needs, 30% to wants, and 20% to savings and additional debt payments. That last category can really help you bring down your debt.


💡 Quick Tip: A low-interest personal loan from SoFi can help you consolidate your debts, lower your monthly payments, and get you out of debt sooner.

Defining “Broke”

Being broke means having absolutely no money. More than likely, you do have money; you’re just overspending what you earn or maybe spending what you don’t have (on credit cards).

It can be easy to free up some money if you’re already earning it. Rethink money-draining activities like eating out too often, buying a coffee when you can make it at home, and perhaps spa or gym memberships when you can work out in cheaper ways (walking, running, workout videos on YouTube). Maybe you can save on streaming services by dropping a platform or two.

Increase Your Income

If you are carrying debt and don’t have money in the bank, perhaps it’s time to think about how you could bring in more cash. You might look for a new job, train up for one that pays more. You might sell your stuff that you no longer use or need. You could find a part-time job or side hustle; perhaps driving an Uber or Lyft. If you have a hobby (making jewelry, gardening, or fixing cars), you may be able to turn that into a money-making side business.

Change Your Spending Habits

Yep, it’s easier said than done, but keep your eyes on the prize: being debt-free. You might identify your spending triggers, such as shopping when you’re bored, and find free or cheap ways to keep yourself occupied. Or recognize that lifestyle creep can prevent you from paying down debt: That happens when you get a raise or earn extra money and spend it instead of saving it. Also be on the lookout for FOMO spending: When you overspend because you have “fear of missing out” on what friends, coworkers, or social media influencers are doing.

Say No to Temptation

Yep, it’s easier said than done, but keep your eyes on the prize: being debt free. That means saying no to expensive vacations, a new car, eating out, buying expensive gifts, going regularly to the nail salon, buying fancy new clothes, living in a higher-rent apartment, and wasting electricity. There are plenty more suggestions, but you get the idea.

Automate Your Savings

Take advantage of technology, and set up recurring transfers from your checking account into savings just after you’re paid. By automating your savings this way, you can build up some money in the bank and get past the “I’m broke feeling.” Even $20 or so will accumulate and make a difference. Simply set it and forget it.

Establish an Emergency Fund

That automatic-deduction savings account can double as your small emergency fund. Use it only when needed. Train yourself not to dip into it otherwise. If an emergency does arise, you might possibly be able to cover it with the money you’ve saved from this fund, and you wouldn’t have to use your credit card yet again.

Apply for a Lower Interest Rate

High-interest rates can make it very hard to get out of debt. Most of your minimum monthly payment goes to those interest charges, not your principal debt. Ask your credit card issuer if they can lower your rate to keep your business.

If it’s a no-go with your credit card company, you may want to look into a balance transfer credit card, which can give you zero-percent interest for a promotional period (usually 18 months or so), helping you pay off debt.

Consider a Personal Loan

Consolidating your credit cards into one low-interest personal loan could be your first step in the journey away from being broke.

With a (hopefully) lower interest rate and a fixed monthly payment, you can always know what you’re paying. That’s good for your budget. It can help make it easier to pay off your high-interest credit cards and loans and greatly simplify your life.

You can figure out ahead of time how much money you could save in interest payments by using a personal loan calculator.

The Takeaway

As you work towards paying off debt, even when you have no money in the bank, stay motivated. Pat yourself on the back for making small bits of progress. It may take time and a variety of tactics, such as budgeting wisely and bringing in some extra cash, to get to your goal.

The option of using a lower-interest personal loan to pay off credit cards is another tactic that can help you crush your debt.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOPL18122

The average credit card debt for someone in their 30s is $4,110, but that only tells part of the story about what America owes on their plastic.

Credit card debt in America is a significant issue, with combined balances topping $1 trillion in the third quarter of 2023. You probably are aware that credit card debt is high-interest debt and can be hard to pay off.

If you are wondering how your balance compares to those of other people your age, to see how you stack up, read on. What follows is a decade-by-decade review of what Americans owe. Whether your debt is less than or more than the norm for your age group, you could likely benefit from paying it off, which is why you’ll also learn smart tactics for doing so below.

Credit Card Debt Ages 30 to 39

Welcome to your 30s, which can be a time that many people are establishing their adult lives. What does that mean? Possibly home ownership (or outfitting your rental home), having a family and paying for the kids’ expenses, traveling, dinners out with friends, and maybe new clothes because, congrats, you snagged a new job.

Some of these changes will impact your overall debt by age, but consider just your debt related to using your plastic. Your evolving lifestyle can cost you.

The average credit card debt for those in their 30s is $4,110, significantly more than the $1,462 owed by people ages 18 to 29. You should consider not only how this figure can impact your overall financial life, but also how it can affect your credit rating. You’ll want to take note of your credit utilization ratio, or how much of your credit limit your balance represents, as you work to keep your profile in good shape. Financial experts suggest this number stay at or below 30%.


💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. SoFi personal loans come with no-fee options, and no surprises.

Credit Card Debt Ages 40 to 49

Americans between 40 and 49 have on average, $5,373 in credit card debt, which is the highest for the age groups reviewed here. Many Generation X-ers have bought houses, cars, and started families. They are increasingly consuming and, as life gets busier, growing financial demands can encourage the growth of credit card debt.

As consumers are more and more stabilized in their lifestyle and careers, they tend to grow more comfortable spending money they can’t immediately repay. Additionally, at this age, people may be focused on financing children’s education, which can make paying off their credit card balances a lesser priority.

Credit Card Debt Ages 50 to 59

This age group owes an average of $5,085 in credit card debt, a bit less than those in their 40s. Many people in their 50s may be over the crest of their expenses as a parent or as a homeowner; perhaps their kids are out of college and they’re happy with their house as is.

However, as time passes, medical expenses can grow, and those can be put on their credit card and grow their debt.
What’s more, saving for retirement is likely to be a primary focus at this age. For those trying to fatten up their nest egg, paying off credit card debt may move to the back burner.

Recommended: Tips for Using a Credit Card Responsibly

Ways to Pay Off Your Credit Card Debt

As you plan to pay off your credit cards, it’s important not to underestimate the challenges of your mid-to-late 30s. With growing responsibilities and increasingly complicated finances, it can be easy to fall into debt.

It’s important to organize your budget in a way that allows you to make monthly payments to reduce and eventually eliminate debt while still accumulating savings. Also, knowing when credit card payments are due and paying them promptly is an important facet of maintaining your financial wellness.

•   One strategy that may be worth trying is the debt snowball method, where you prioritize repayment on your debts from the debt with the smallest amount to the debt with the largest amount, regardless of their interest rates. (While still making minimum payments on all other debts, of course.)

When you pay off the debt with the smallest amount, focus the money you were spending on those payments into the debt with the next lowest balance. This method builds in small rewards, helping to give you momentum to continue making payments. This method is all about giving yourself a mental boost in order to pay off your debt faster.

The idea is that the feeling of knocking out a debt balance — however small — will propel you toward paying down the next smallest balance. The con, however, is that you could end up paying more interest with the snowball method, because you’re tackling your smallest loan balance as opposed to your highest interest debt.

•   The other popular payoff method, the debt avalanche method, encourages the borrower to pay off the loan with their highest interest rate first. While you don’t get that psychological boost that comes with knocking out small debts quickly, paying off your highest interest loans first is the more cost-effective solution of the two.

•   Another option to consider is to apply for a personal loan. Personal loans are loans that can be used for almost any purpose, whether that’s home improvement, covering unexpected medical expenses, or paying off credit card debt.

Personal loans can be a way to get ahead of debt, since interest rates are typically competitive, especially when compared to high-interest credit cards. A personal loan allows you to consolidate debt — simplifying multiple monthly payments with different credit card companies into one monthly payment.

•   Another strategy to pay off credit card debt is, of course, to cut down on expenses and tighten your budget. When it comes to paying off debt, organization is key.

Pick one of the different budgeting methods that suits you best. Make sure you are tracking both your income and your expenses. Take a look at your monthly purchases and try categorizing them into different areas. With some strategic planning, small changes can add up to make a big difference.

Using a Personal Loan to Pay Off Your Credit Card Debt

If you decide that a personal loan is your best option, shop around, and see what kinds of offers you qualify for from different lenders.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPL1223010

Moving is part of most people’s lives. Maybe you’re heading to grad school a couple of towns away. Or perhaps you have a job offer hundreds of miles away that you’re excited to accept.

Whatever the reason, the logistics of getting your stuff from the old place to the new one will need wrangling. Here, you’ll learn more about your options for moving, how much it may cost (from a couple of hundred dollars to thousands), and how to afford the expense.

DIY Moving Costs

Yes, you could move yourself. This could be a smart move for a small, local move, and it can help keep costs within your budget.

Exactly how much this might cost will be based on several factors:

•   Cost of transportation (can you borrow a friend’s van or do you need to rent one)?

•   Cost of the packing materials you use (recycled boxes and old newspapers vs. the pros’ higher-end and job-specific supplies

•   How much stuff you’re moving (and if you need to figure out insurance for any pricey items)

•   How far you’re going

•   Whether you need to store some things temporarily.

As you might guess, packing up the contents of a dorm room and moving it half a mile away to the apartment you’re renting with friends will cost one amount. Supplies might cost, say, $65.

Loading up the contents of the sweet bungalow you’ve been living in for a couple of years and depositing your worldly possessions at a new place 1,000 miles away will be a much more involved and expensive undertaking. Packing materials alone could be a few or several hundred dollars, and renting a moving truck could be anywhere from $20 to $100 per day, depending on your local cost of living. Also, you will likely have to pay to stay somewhere overnight and also spend at least a couple of hundred dollars on gas, dollies, and insurance.


💡 Quick Tip: Some personal loan lenders can release your funds as quickly as the same day your loan is approved.

Full Service Moving Costs

If you decide a full-service move best meets your needs, you’re probably going to want to gather some estimates, so you can nail down the details and be ready when it’s time to go. Some pointers as you do so:

•   Also, do check ratings and references carefully. There are plenty of instances of fraud and scams in this realm, and it’s wise to protect yourself.

•   Booking your truck four to eight weeks in advance is typically a good rule of thumb — maybe even further out if you’re moving in the busy summer months.

•   Professional moving companies can give you an estimate based largely on how many rooms of furniture you have. Most have websites, so you can often get a quick estimate online. A typical local (or fairly local, not long-haul) move for a three-bedroom home is about $2,100.

The average moving costs if you relocate cross-country can easily be twice that, or $4,300 for a distance of about 1,225 miles. Keep in mind, specifics will vary. Oversized or extremely heavy items might cost you extra — as could lots of stairs, or things that need to be taken apart and put back together.

Recommended: Average Personal Loan Rates

Extra Moving Costs to Think About

Then there are the extras that go along with getting out of one place and into another.

•   Transportation: If you’re taking your car across the country, you’ll probably want to get a tune-up before you go. And then there’s gas, hotel stays, and eating on the road. Having a car transported instead of driving it yourself could cost anywhere from $700 to $2,000.

If you’re in a hurry and decide to fly, that’s another expense. And if you’re taking a pet, you may have to add a little bit more to your overall bill, depending on the mode of transportation you choose for your furry friend.

•   Getting into your new home: Don’t forget about deposits you might have to make at your new location. That could be anything from first and last month’s rent and a pet deposit at a new apartment, to utility deposits at a new house.

•   Home repairs and cleaning: Be ready to pay for some home repairs on both ends of your move. You may have to make some quick fixes to get out of your rental without losing the deposit or maybe even major repairs if you’re selling a home. When you get to your new location, you could find some unexpected problems. Or you may just want to hire someone to come in and clean so you can cross that off your ever-growing moving to-do list.

•   Starting out fresh: You’ll probably need to buy some things at your new home (like curtains, curtain rods, hangers, bedding, etc.) that are easily overlooked. Then there’s that fridge to fill. All those little costs can add up.

•   Cash for tips: You will likely need to withdraw money from an ATM to thank people for their help when you move. Tips for the movers. Tips for the handyman or housekeeper who helps you get things in shape. Tips at your hotel. Tips for waitstaff at the restaurants you’ll be eating at until you get your new place up and running—or at the very least, tips for the pizza delivery guy.

Recommended: Typical Personal Loan Requirements Needed for Approval

Financing Your Move

If you have enough room on multiple credit cards, you could go that route, but should you? Interest rates can be considerable.

Or would a personal loan make more sense for you to cover all those costs, big and small?

Remember, even if you’ll be reimbursed by your employer or plan to take some moving deductions when you file your tax return, it’s very likely you’ll be paying at least some moving costs up front. And the longer those expenses sit on a credit card, the more interest racks up.

The Takeaway

Even if you have a small amount of stuff and aren’t moving very far, moving takes time, energy, organization, and money. With the average professional move costing a couple of thousand dollars, you may want to plan carefully for this expense. It’s likely not a good reason to dip into your emergency fund, so you may want to save in advance or consider a personal loan. If you qualify for a personal loan, your interest rate may be lower than a credit card, which can free up some cash and reduce your money stress.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOPL1223011

Congrats: You did it! You got through some tough training for your career in medicine, and now you are going to find out where you’ll start your career as a full-fledged doctor. It’s an exciting moment as you wait to hear about your residency.

However, because residencies are spread across the country, there’s a good chance that you’ll not only be starting an intense new job; you will also be moving and getting settled in a brand new town.

Moving can mean major stress on its own, but moving at the very end of medical school can heighten that. After all, new doctors have an average of $202,453 in debt from their education, and moving can cost money. Learn about how to finance this important next step here.

Residency Relocation Costs

There’s no way around it: Moving is expensive, and residency relocation costs can add up.

•   There’s the move itself. Even if you’re moving to a new house in the same city to be closer to your work, you may need to hire movers or rent a truck, buy boxes, and get help packing. Plus there are those unexpected moving costs, such as replacing little things like shower curtains and cleaning products that seem to always get lost in the move.

The average cost of moving locally is $1,500, and a long-distance move can be $4,000 or more. That’s a significant chunk of change.

•   Even if you follow moving tips to economize during the process, guess what? The expense of settling into a new city can be even higher. You will likely need to put down a security deposit if you are renting, as well as possibly update your furniture and equip your new place with essentials like trash cans, towels, and cooking supplies.

•   Another thing to include in your budget: the costs of exploring a new city and eating out while you set up your kitchen. And don’t forget any expenses you may have to incur for your new job, like clothes, or potentially even transportation costs.

Plus the cost of living may be higher than what you are used to. Those little expenses can add up to a major headache if you’re not prepared.

If you’re feeling the pinch, there are a few loans specially designed for medical residents that may be worth considering. They could help make your transition a lot smoother.


💡 Quick Tip: Some personal loan lenders can release your funds as quickly as the same day your loan is approved.

Medical Residency Relocation Loans

Here are some options that can help you out financially when you relocate for a residency:

•   One loan new doctors may choose to take out is a medical residency relocation loan. You can take out a residency loan from a private lender — for example, a Sallie Mae Medical Residency and Relocation Loan.

•   Or it could be as simple as taking out a personal loan. Some private lenders may offer student loan-type benefits for loans to be used for medical residency relocation, such as a longer loan payoff term (though you may pay more in interest over the life of the loan if you opt for an extended term).

Residency loans may be specifically geared toward new doctors who are beginning their residencies and need to pay for essentials while settling into a new job and a new city. These loans can allow medical residents to fill the financial gap between graduation and your first residency paycheck.

They can help new residents cover the cost of moving and getting settled in a new city, including providing for your family while you adjust to a new job. For instance, if you’re making a move for residency and bringing your family along, it is likely that your spouse will also need to look for a job in your new city, which means that they may be giving up a paycheck temporarily as well.

Recommended: How to Qualify for a Personal Loan

Home Loans for Medical Residents

Another aspect of your finances to consider is whether you rent or buy the next place you live. Here are a few important points to consider as you embark on your career.

•   As a medical resident, you might qualify for a home loan designed specifically for doctors. These loans can have some big benefits, like low down payments, no requirement for private mortgage insurance, and no rate increases on jumbo loans. It’s important to do some research to see how you can qualify for these loans.

•   Of course, there are things to consider before buying a home during your residency. Even if you qualify for a home loan for medical residents, you might not be ready to buy a home just yet. This is especially true if you’re moving to a new city or state and you want to settle in, find your favorite neighborhood, and make sure you really like the city before deciding to buy a home.

•   If you do decide to start the home buying process, it’s probably a good idea to check out both traditional mortgages and loans designed specifically for doctors. You won’t know which one is right for you until you compare the benefits of each.

When both partners transition to new jobs at the same time, there can be a significant gap in income. A medical residency relocation loan can help you maintain your lifestyle while you and your spouse acclimate to new jobs.

Getting Ready to Get a Loan

If you’re thinking of getting a loan for relocation costs or to purchase a home, you may want to do some financial housekeeping. Here are a few moves to make:

•   Check your credit score, and see if there may be ways to build it, if necessary. A higher score can earn you the best (meaning lower) interest rates.

•   Determine exactly how much money you may need to borrow. Like all loans, consider only borrowing the amount you actually need to tide you over until your residency starts paying.

You can get a good idea of how much you may need to borrow by taking a look at your monthly expenses and then adding any additional cost-of-living increases based on your new city and the cost of moving. Don’t forget to list one-time expenses like a security deposit for a new apartment.

•   When you’ve figured out how much you want to borrow, take some time to shop around for a loan whose terms work for you. Each lender has different terms and benefits, so make sure to understand them fully before making a decision on if a personal loan is right for you.

Recommended: Can I Take Out a Personal Loan When Unemployed?

The Takeaway

Becoming a doctor can be a challenging and rewarding path. As you embark on your residency, you may find that there are significant relocation and housing expenses. Depending on your situation, you may want to review your loan options to see if there’s a good fit. For instance, a personal loan might allow you to cover the cost of setting yourself up in a new place for your medical residency.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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