Asking for Advice About Loan Repayment Strategy

[Texas2Step]

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[TMP-SMX]

Stay in REPAYE during residency filing jointly with taxes. Once your future plans (private vs 501c3/government) are finalized make the decision to refinance as an attending. Feel free to get rid of that 7.5% loan. Start building your credit and using it responsibly. There's no right or wrong answer but this is pretty close to one.

 

[thewareagle]

Depending on specialty choice, I can’t see IBR being the cheapest repayment option long term. I would personally go onto REPAYE during residency, contribute to retirement (Roth IRA, 401k + match if offered), and get credit cards to increase your scores. After residency you can REFI with much lower interest rates due to salary and credit score.

 

[cpants]

Good job keeping the loans relatively low. 160k for 2 MD's isn't too bad. On two resident salaries you should be able to pay a lot of this off during residency. You should be bringing in ~120k/year give or take and you can put a sizeable chunk onto this every year.

I would refi everything whenever grace periods are over, or even now. Interest rates are rock bottom. See what you can get with your credit scores. You can always refi again as your credit increases.

 

[redfish955]

I would shoot for FIRE. Literally save or pay off loans with 50% of earnings until you are fire. If you want to keep working flex hard in any form or fashion you want to. Cars, yachts, houses, massive charity donations, and etc.

 

[Texas2Step]

Thank you all for the thoughtful replies. It seems the general strategy is to pay back loans/save aggressively, build credit, and refinance early and often. The decision to stay in REPAYE or refinance federal loans is probably the decision I struggle with the most, but it seems both approaches are feasible depending on whether I wish to stay in academics or go private.

 

[redfish955]

Basically you can lump sum your retirement in your 30s and be set for life. If you try to catch up you will be too far behind. Compound Interest Calculator