hear me out:
DO 4th year
60k student loans as of end of MS3 (45k from Med school living expenses) (other 15k from undergrad - all subsidized so no interest has accrued on it)
I’ve been able to live off of an average 15k/year (I live in the midwest) through out Med school.
This year, I plan on taking the full ~35k in loans offered since I don’t know what to expect during interview season and moving expenses for residency.
Now, I need a new car for residency. Current one is dead. I paid cash for it so I have no experience with financing or leases. Even though residency apps and travel is expensive, I don’t anticipate spending 35k this year. I expect to have 10k left or so, in addition, I can still take out an additional 10k for this school year. Essentially I can have up to 45k during MS4 year.
The question is should I use the excess ~20k on the purchase of my car? Rather than taking out another loan with a bank or car company? Yes my loans will have an average of 6% but I am refinancing my loans next year with hopefully an interest of ~3%. Credit score is 775. No credit card. No other loans, debts etc. Single, no kids.
I would be graduating with ~100k in debt which I plan on starting to pay off in residency. Is it better to have my loans coming from one place rather than dealing with the stress of car financing and etc. Plus will the car be cheaper paying cash?
I know this question is common but given my plan to refinance, would it really make a significant difference whether I take out a car loan or use the cash from my final year? Also arent student loans more flexible in payments (10 -20 yr repayment plans) vs a standard car loan (over 5-6 years)? I see it as if I’ll be paying back about your the same amount but over a longer period of time which will be more manageable as a resident.