The path to becoming a physician can be like climbing Mount Everest. It demands unquestioning dedication and effort—but the reward is the fulfillment of a major personal goal.
In both cases, good planning is important. For the medical school journey, you’d be wise to have a personal financial plan—including a strategy for handling your borrowing needs during med school and residency. That’s why we’ve pulled together four simple rules from the world of mountain-climbing for you to consider as you plan your journey.
Plan for the cost.
Climbing Mount Everest can cost from $30,000 to more than $100,000.[i] A lot of the variance is in the cost of the guides—but there’s also the expensive climbing permit if you’re a foreigner. Other substantial costs include travel, gear, oxygen, and weeks of food and camping while acclimatizing for the ascent.
Medical school costs can also vary widely, depending on the school you choose, whether you live at home or away, and how much you spend on things like a car or travelling for rotations and interviews.
If you need to borrow for med school, a Medical Student and Resident Line of Credit could be the answer.
A Medical Student and Resident Line of Credit is a flexible source of funding that you draw on when you need it. And while you could borrow in the same way on a credit card, this is not advisable because of the significantly higher interest rates.
When planning for Everest, travelling light will make your climb easier. This is not the time for special creature comforts or other extras. You need to know what you need to pack at home (clothing, headwear, gloves, footwear, backpack) and what can be bought or rented once you’re there.
Similarly, during med school, you can “travel light” by not borrowing more than you need. Excess borrowing means weighing yourself down with higher monthly payments—and a longer time to repay.
Consider the example of two doctors. One of them stuck to a tight budget during her training and borrowed a total of $100,000. The other borrowed $150,000, having drawn on his Medical Student and Resident Line of Credit for extra spending money.
Assuming they each make monthly repayments of $1,000 after graduating, the doctor who borrowed according to her needs-based budget will be free of medical school debt more than eight years earlier than the doctor weighed down by the larger debt.
What’s more, once repayments start, the doctor with the bigger debt will need to pay back nearly $200 more per month to cover the interest charges.
Student Travelling Light on Needs-Based Borrowing
Student Weighed Down by Discretionary Debt
Debt accumulated by the end of medical school
Monthly interest on the full debt (no principal paid off)[i]
Time needed to pay off the debt with monthly payments of $1,000
10 years and 8 months
19 years and 1 month
Assumes a compounded interest rate of 4.75%. Rate used is for illustration purposes only.
Plan for the descent as well as the ascent.
Every year, about 600 people make it to the top of Mount Everest—that’s about half of those who attempt the climb. What’s interesting is that the riskiest part of the climb is descending the upper slopes of Mount Everest. Luckily for you, the stakes aren’t as high with medical school debt.
For med students, a smart and strategic plan for your financial requirements won’t just consider borrowing (the ascent), but will include repayment (the descent) as well. This means putting together a repayment plan, not just a borrowing plan. You’ll need to monitor and revise your plan as your financial situation changes during med school and residency, and as you transition into practice.
4. Use a trusted guide
Finding experienced guides for Mount Everest is crucial to one’s success.
Med students who need funding also need to get advice from experienced people who know the journey of a physician in training. There are lots of borrowing pitfalls, and there is a lot to know about how student loans, bursaries and lines of credit work through med school, residency and beyond.
A Medical Student and Resident Line of Credit doesn’t just provide you with med school funding—it also gives you access to a lifetime of solid advice.
Some financial institutions give large upfront credit limits without the advice to help you manage them wisely. Not us. MD Advisors will walk you through the world of bursaries, student loans and lines of credit so you don’t take on more than you can handle. When you’re ready, we’ll also partner with you to design a personal repayment plan.
Wherever you are on the journey—starting your planning, halfway through the climb, or preparing for the descent—MD can help lead the way. Learn more.