Physician Car Loans

Updated on October 12, 2023
At a Glance: Physicians can access auto loans specifically designed for them due to their high debt load and future earning potential. Challenges for doctors include high debt-to-income ratios and limited credit history. Traditional banks, credit unions, and online lenders offer physician auto loans. Stilt, an online lender, provides a simple three-step process to obtain a physician auto loan. To save money on a new car, paying cash is preferable, avoiding dealership financing options is recommended, shopping around is important, and taking your time to make an informed decision is advised.

Physicians have one of the most financially stable and in-demand positions in the job market, which puts them in a relatively strong position to obtain a loan. However, physicians often must incur substantial debt to obtain their degree, which can disadvantage them when applying for loans.

This article explores auto loans for physicians, including where to find them, how to get them, and tips for getting the best deal.

Are There Physician Auto Loans?

Yes, there are auto loans available specifically for physicians. This is necessary because of the debt load that most physicians graduate with.

Lenders understand that physicians must take on debt to complete their education and that their high future earning potential makes this a relatively low-risk loan.

Possible Challenges for Doctors Trying to Get Auto Loans

Doctors and med students face two obstacles in obtaining auto loans: debt-to-income ratio and credit score.

High Debt-to-Income Ratio

Your debt-to-income ratio is simply your monthly debt payments divided by your monthly income. Typically, lenders like to see a debt-to-income ratio of 30% or less.

This can be a problem because recent medical school graduates typically have a very high debt-to-income ratio, given the debt they took on to complete their studies.

Luckily, physician auto loan lenders understand this and will be a little more lenient as they know you have much more earning potential.

Limited Credit History

As with any kind of loan, lenders like to see a good credit score and credit history from the borrowers they lend to.

 This can be a challenge for recent graduates if they haven’t compiled much of a credit history up until this point.

If you haven’t already, it is a good idea to start using a credit card and paying it off each month to build up your credit score/history so you have a higher chance of being approved for a physician auto loan.

Where to Find Auto Loans for Doctors

There are a number of financial institutions that physicians can turn to for auto loans. See the following section for the biggest players in the physician auto loan market:

Traditional Banks

The banks are perhaps the most prominent lenders for auto loans. Banks bring credibility and legitimacy, but they can also be unresponsive to customer problems.

Furthermore, the size of banks makes it difficult for them to provide personalized financial solutions, and banks offer little in terms of hardship protections.

Credit Unions

Credit Unions are similar to banks, but they typically offer lower interest rates on loans. However, credit unions are also member-only institutions, which means you have to be a member by opening a count to qualify.

Also, there are far fewer credit unions than banks as they have fewer resources and locations. They often have less of an online presence as well.

Online Lenders

Online lenders put the resources and convenience of banks online, allowing them to provide expedited, customized service. The small overhead of online lenders means that they can often offer superior interest rates, and expedite customer service as well.

How to Get a Physician Auto Loan with Stilt

Stilt is an online lender headquartered in San Francisco, California, and obtaining a physician auto loan with Stilt involves a simple three-step process:

  1. Fill out an application: The first step involves completing an online application. In this application, you will state the amount that you are requesting and divulge personal financial information, as well as information on your education and employment. You will also have to authorize a soft credit-pull (that will not affect your credit score).
  2. Receive a decision: Stilt responds to loan applications within 24 hours. If your income, education, and employment meet the Stilt’s eligibility requirements, then you will qualify for an amount, interest rate, and term length. Then, you choose the term length that best fits your financial need, and sign a promissory note agreeing to the terms of the loan.
  3. Receive the funds: Once the note is submitted, the funds will be transferred into your account in just a day or two. From there, you can start making monthly payments on your loan.

4 Ways to Save Money on Your New Car

With your auto loan in hand, you can start shopping for cars. However, it’s important that you can keep costs down so that you don’t loan more than necessary. See the following section for some tips on how to save money when shopping for cars.

Paying Cash is Always the Best Option

Cars are depreciating assets that lose value quickly, and the more interest that you pay on a depreciating loan, the more money you lose in the long run. Paying cash upfront lets you avoid this, and minimizes the overall cost of the car.

Avoid the Dealership Financing Options

While most people must take out a loan to cover the cost of a car, the financing offered by dealerships themselves is often very unfavorable. Dealers often extract a fee that is included in the terms of the loan, and the APR on dealership loans is typically higher than what you could get from a reputable lender.

Don’t Be Afraid to Shop Around

Make sure that you explore your options before settling on a vehicle. Different dealers may have a better price than the first you encounter, or you may find a vehicle that meets all your specifications and needs that is less expensive. Get a quote on a vehicle and bring it to another lender to see if you can get them to meet or beat the price.

Take Your Time

The best way to maximize the value of your purchase is to do your due diligence and thoroughly investigate different cars and dealers. Rushing through the process is how you might end up with a poorly functioning car, or overpaying for your car.

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Final Thoughts on Physician Auto Loans

Medical school graduates face the same problems that all university graduates face: a high debt burden and lack of credit history.

A specialized physician car loan will account for this and provide you with an interest rate that aligns with your earning potential and steady employment.

Consider using an online lender for the convenience and lower rates that they can offer relative to traditional banks and credit unions.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.