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How fast can you pay off your debt?

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crazy4clana

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Ok, so I go to a private undergrad (although it's on par with public school costs with my finaid), and if I don't get into my state school and have to go to a private dental school...how many years would it take for me to pay off my debt once I start working?
 

Aceofspades

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Um... how can anyone answer that question when you gave no numbers. It depends on your debt load, interest rate, and income after graduation. Search the web for financial calculators that can compute monthly payments and other details.
 

crazy4clana

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I'm not talking about exact numbers here, just a rough estimate to see how long I will pay it based on dentists' salary, but let's see...

Approx 100K including college and public dental school...more if I go to a private dental school.
 

doc3232

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3 years IMO unless you will waste your salary.
Personally, I don't think I will spend more than 30k a year for basic needs, but thats just me.
You will get finaid in priv dent school too.
 

dackmonkey

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3 years IMO unless you will waste your salary.
Personally, I don't think I will spend more than 30k a year for basic needs, but thats just me.
You will get finaid in priv dent school too.

i think 3 years is VERY optimistic.
 

doc3232

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And how much do you think a dentist makes each year.
successful dentist of course.
 

dackmonkey

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And how much do you think a dentist makes each year.
successful dentist of course.

ah i misread an earlier post. if you are looking at 100 grand in loans, that sounds about right. i thought we were talking about a private school that would require a debt of 250-300 grand in the end.
 

doc3232

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ah i misread an earlier post. if you are looking at 100 grand in loans, that sounds about right. i thought we were talking about a private school that would require a debt of 250-300 grand in the end.

hahaha, I am.
I think one could pay off 300 grand in 3 years, but maybe I am just very conservative with my money.
 

dackmonkey

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i've personally never heard of anyone paying off that kind of sum in 3 years. how do you figure it would be so easy? i'm interested since i'll most likely be graduating with about 200 grand in loans and would like to pay them off asap.
 
J

joh020340

hahaha, I am.
I think one could pay off 300 grand in 3 years, but maybe I am just very conservative with my money.

Are you also considering the amount of money to buy into a practice? After it's all said and done its easy to be over 600K in debt.
 

Mia305

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hahaha, I am.
I think one could pay off 300 grand in 3 years, but maybe I am just very conservative with my money.

With 300 grand in loans, and not to mention giving about 1/3 of your salary in taxes, it would be nearly impossible for even the most conservative person to pay off that kind of money in only 3 years. Don't forget the interest that also builds on that loan. Unless you plan on making some crazy sum of money straight out of school, then that would be another story...
 

doc3232

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IMO if you work hard (not 40 hours a week), 3 years would do and assuming you don't buy into a practice but rather work using another dentist's equip.
Maybe 4-5 years if you don't work hard, regular shift.
 

Amalgam4U

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3 years? for 300k? no...i don't think so.

Average salary out of d-school is like 110k (if you don't already have your own practice etc). With interest and stuff you're looking probably at at least 10 years. (interest is not fun).

If your original principal is 300k, with interest, you're looking at like 400k by the end of your stay at d-schools. 10 years you're looking at a monthly payent of like 5k, and a total of like 600k at the end of your 10 years.

(this is summarized from the financial aid packet I got at USC)

5k a month is quite a lot, considering after taxes you're left with about 60-70k of your salary, which works out to about 5-6k/month. Subtracting 5k leaves you with...nothing? lol.

Of course, if you're gonna inherit a private practice, that would be nice.
 

wildcat03

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Yeh 10 years is more realistic

Is the money you pay towards loans tax deductable? Or does it depend on the loan?
 
J

jackbauer!

Why would you be in such a rush to pay off your loans? Spread the loans out and invest. Surely you will do better over the long term in the market than the interest of your loan. Plus, interest on loans is tax deductible.

jb!:)
 

loved

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hahaha, I am.
I think one could pay off 300 grand in 3 years, but maybe I am just very conservative with my money.

300k in 3 years? what kind of monthly payment are you expecting??
 

Egeria

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300k in 3 years? what kind of monthly payment are you expecting??


Agree...not possible... I mean you have to pay for the basics like for an apt/house, insurance, food. There is no way to pay that off in 3 years.
 

Blarelli

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hahaha, I am.
I think one could pay off 300 grand in 3 years, but maybe I am just very conservative with my money.

Have you forgotten about taxes? With that kind of income, federal tax is currently 33%-35% (probably back to 38% after the elections), about 7% state tax depending on where you live (Cali, NY are much higher), 12.4% for self employed social security, and 2.9% for medicare (will also be skyrocketing in the near future). So not including the 7% sales tax you pay on everything you buy, you will be paying at least 57% of your check to the government. In order to pay off $300k in 3 years, You would have to be making in excess of $300k a year.
 

SanOnofre2002

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Plus, interest on loans is tax deductible.

jb!:)

Not exactly true; there's limits that will prevent nearly all of us from getting that. The student loan interest deduction is gradually phased out according to your income. Phase out begins at AGI of $55k and by $70k you get no deduction. For joint filers it starts at $110k and disappears at $140k.
So I wouldn't count on this benefit.
 

RSamR20

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This thread makes me glad I'm not trying to be an accountant :).

Cheers guys! Best of luck to all!
 

TempleDMDKrazd

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i think paying off a $200k loan in 3-5 is very doable.

1) dont go out and buy a fancy practice (until you get the gist of things), house, or car
2) live like you do now (as a poor student)
3) work more than 40 hours...(hey its only for a couple years)
 

doc3232

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i think paying off a $200k loan in 3-5 is very doable.

1) dont go out and buy a fancy practice (until you get the gist of things), house, or car
2) live like you do now (as a poor student)
3) work more than 40 hours...(hey its only for a couple years)

thank you
exactly what I was saying
 

doc3232

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I forgot to mention that I was assuming he would pay 200k
100 extra for priv.

Do we get less finaid in D-school (pub or priv)?
In relativity to tuition I mean.
 

djeffreyt

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hmmm.

300,000 will accumulate around 50,000 to 60,000 more debt in interest over the course of those 3 years. So a total of 360,000 paid in 3 years is $120,000 a year or $10,000 a month.

I don't personally think I can do that, but then I'm not walking into a dental practice right out of school that is planning to pay me $200,000 a year.
 

TempleDMDKrazd

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hmmm.

300,000 will accumulate around 50,000 to 60,000 more debt in interest over the course of those 3 years. So a total of 360,000 paid in 3 years is $120,000 a year or $10,000 a month.

I don't personally think I can do that, but then I'm not walking into a dental practice right out of school that is planning to pay me $200,000 a year.

so let's do some math
$300k debt at 8.6% in repayment in 3 years will be:
monthly payment: $9484.17
total interest paid: $41430.12
total repayment: $341430.12


now we're looking at $200k debt at 8.6% in repayment n 2 years:
monthly payment: $6322.78
total interest paid: $27620.08
total repayment: $227620.08

to play it safe lets say a new graduate will make $140k (probably be working close to 40 hours to more than 40 hours as an associate)

take away 40% in taxes and you're left with $84,000 a year. Well, if you were to live poorly like you live now (as a student), you would probably need only $1,500 a month to live (i know a lot of people on this budget). This take away $18,000 from your $84,000. You're left with $66,000. Times that by 3 and you get $198,000 in repayment in 3 years. To actually pay off the loan it would probably be around 3-4 years.

I don't know abut you guys, but I rather pay off my loans quick so I can stress about other things (mortgage, practice, etc)
 

Amalgam4U

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so let's do some math
$300k debt at 8.6% in repayment in 3 years will be:
monthly payment: $9484.17
total interest paid: $41430.12
total repayment: $341430.12


now we're looking at $200k debt at 8.6% in repayment n 2 years:
monthly payment: $6322.78
total interest paid: $27620.08
total repayment: $227620.08

to play it safe lets say a new graduate will make $140k (probably be working close to 40 hours to more than 40 hours as an associate)

take away 40% in taxes and you're left with $84,000 a year. Well, if you were to live poorly like you live now (as a student), you would probably need only $1,500 a month to live (i know a lot of people on this budget). This take away $18,000 from your $84,000. You're left with $66,000. Times that by 3 and you get $198,000 in repayment in 3 years. To actually pay off the loan it would probably be around 3-4 years.

I don't know abut you guys, but I rather pay off my loans quick so I can stress about other things (mortgage, practice, etc)

may as well do a military scholarship, eh?

And, it's true that paying off your student loans may not be the best thing to do yet. You can invest and get more on your money than it costs to use it (student loans tend to be at lower rates than some).

And unless you get a subsidized loan, you're also accruing interest during your dental school stay. And your interest compounds...

Assuming an 8.5% interest rate compounded yearly and $50k loan amt/year
Timeline looks something like this:
Year | Original Principal | Interest + P at graduation
1st | 50k| 69,292.94
2nd | 50k| 63,864.46
3rd | 50k | 58,861.25
4th | 50k | 54,250.00

Total that's 245,268.65 coming right out of dent school on a 200k debt (that's an extra BMW to use the money to go to dent school)

Assuming 250k repayed over 3 years, the monthly payments come out to $7891.88

8k/mo x 12mo/yr = 96k/year (real money) to repay your debt in 3 years.

+ living expenses at 18k

Then, taking 35% for tax

--------------------------- (bottom line)

$175,000 income coming straight out of dental school (i.e. slow procedures) to live like a poor college student. Some other additional costs that make the "poor college student" scenario unlikely are INSURANCE, life stage adjustments (i.e. house/car/practice purchases), and perhaps someone else that you'd need to consider in a spouse.

Possible? Maybe...but unlikely. The MEDIAN salary of a dentist is 130k according to salary.com, and as a green dentist, you'd probably be making less than that.
Desirable? Definitely Not... Also not necessarily the best of routes to take.

Over 10 years the monthly payments are $3099.64, much more reasonable, but still pretty hefty. that's a total of almost 375k if anyone's interested, almost double the principal.

I think a lot of people overlook the fact that the interest compounds, resulting in having to pay literally exponentially more than your original principal.
 

crazy4clana

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Haha, woah this thread got complicated quick.

Why would you be in such a rush to pay off your loans? Spread the loans out and invest. Surely you will do better over the long term in the market than the interest of your loan. Plus, interest on loans is tax deductible.

No way, I don't why anyone would want to postpone paying off their debt especially with the asinine interest rates.
 

jigabodo

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may as well do a military scholarship, eh?

And, it's true that paying off your student loans may not be the best thing to do yet. You can invest and get more on your money than it costs to use it (student loans tend to be at lower rates than some).

And unless you get a subsidized loan, you're also accruing interest during your dental school stay. And your interest compounds...

Assuming an 8.5% interest rate compounded yearly and $50k loan amt/year
Timeline looks something like this:
Year | Original Principal | Interest + P at graduation
1st | 50k| 69,292.94
2nd | 50k| 63,864.46
3rd | 50k | 58,861.25
4th | 50k | 54,250.00

Total that's 245,268.65 coming right out of dent school on a 200k debt (that's an extra BMW to use the money to go to dent school)

Assuming 250k repayed over 3 years, the monthly payments come out to $7891.88

8k/mo x 12mo/yr = 96k/year (real money) to repay your debt in 3 years.

+ living expenses at 18k

Then, taking 35% for tax

--------------------------- (bottom line)

$175,000 income coming straight out of dental school (i.e. slow procedures) to live like a poor college student. Some other additional costs that make the "poor college student" scenario unlikely are INSURANCE, life stage adjustments (i.e. house/car/practice purchases), and perhaps someone else that you'd need to consider in a spouse.

Possible? Maybe...but unlikely. The MEDIAN salary of a dentist is 130k according to salary.com, and as a green dentist, you'd probably be making less than that.
Desirable? Definitely Not... Also not necessarily the best of routes to take.

Over 10 years the monthly payments are $3099.64, much more reasonable, but still pretty hefty. that's a total of almost 375k if anyone's interested, almost double the principal.

I think a lot of people overlook the fact that the interest compounds, resulting in having to pay literally exponentially more than your original principal.

Those damn banks make so much money off us. :thumbdown:
 

Montserrat

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Best way to pay off your tuition:

Work your tail off at a high paying job prior to matriculating, and marry a corporate lawyer :D. Time to pay off debt : instant.
 

loved

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unfortunately, these calculations are realistic.
back in the day, dental school wasn't this expensive. that's why when you ask a current dentist "was it worth the investment?" they will say, "of course." when you reply, "I'll be graduating with a 250k debt," they say, "WHAT? dental school costs THAT much now?"

moral of the story.. don't go into debt from dental school unless you really love the profession; you'll be practicing for quite a while in order to pay off those loans.
or go with Montserrat's plan.
or bank of mom and dad.
or get a scholarship.
or win the lottery.
or ... anyone else have more solutions?
 

Frederico Albin

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unfortunately, these calculations are realistic.
back in the day, dental school wasn't this expensive. that's why when you ask a current dentist "was it worth the investment?" they will say, "of course." when you reply, "I'll be graduating with a 250k debt," they say, "WHAT? dental school costs THAT much now?"

moral of the story.. don't go into debt from dental school unless you really love the profession; you'll be practicing for quite a while in order to pay off those loans.
or go with Montserrat's plan.
or get a scholarship.
or win the lottery.
or ... anyone else have more solutions?

Air Force, Navy? :p
Serving 3 years isnt as bad as people think. Not a very good choice if you are married or planning to get married any time soon. lol
 

doc3232

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I don't know about you guys, but I get a lot of fin-aid (scholarships and grants, full tuition is paid) and my parents pay for some of my current rent. So I will go to D-school with about 0 debt. Then I will probably go to a public D-school and again fin-aid will pay for about half tuition and parents will help with my rent. Assuming I don't get a job, I will come out o D-school with about 60k debt.
Lets say your not getting fin-aid (parents are loaded), then they better pay for your education.

Lets say your married and independent then you get an incredible about of fin-aid (more than me) and cheap housing etc.

Easy.
 

Mia305

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I don't know about you guys, but I get a lot of fin-aid (scholarships and grants, full tuition is paid) and my parents pay for some of my current rent. So I will go to D-school with about 0 debt. Then I will probably go to a public D-school and again fin-aid will pay for about half tuition and parents will help with my rent. Assuming I don't get a job, I will come out o D-school with about 60k debt.
Lets say your not getting fin-aid (parents are loaded), then they better pay for your education.

Lets say your married and independent then you get an incredible about of fin-aid (more than me) and cheap housing etc.

Easy.


How do you figure getting half-tuition from financial aid? That would sure be news to me, as I have never heard of anyone getting that kind of money for d-school. It's loans like the rest of us. Also, just because someone's parents are "loaded" as you like to call it, does not mean that they are obligated to pay for their dental school education. There comes responsibility when you enter dental school, and taking out loans are a part of that.
 

doc3232

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How do you figure getting half-tuition from financial aid? That would sure be news to me, as I have never heard of anyone getting that kind of money for d-school. It's loans like the rest of us. Also, just because someone's parents are "loaded" as you like to call it, does not mean that they are obligated to pay for their dental school education. There comes responsibility when you enter dental school, and taking out loans are a part of that.

Ok, I understand what your saying and I agree. IMO parents shouldn't pay for their child's tuition if he/she is not responsible because it will be a good lesson for him/her.
And ya, your right about the fin-aid in D-school. Nonetheless, just add 50k :scared:
New number 110k.
Still easy.
 

Montserrat

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How do you figure getting half-tuition from financial aid? That would sure be news to me, as I have never heard of anyone getting that kind of money for d-school. It's loans like the rest of us. Also, just because someone's parents are "loaded" as you like to call it, does not mean that they are obligated to pay for their dental school education. There comes responsibility when you enter dental school, and taking out loans are a part of that.

Sure, parents aren't obligated to do it, but I can see why they would. I'm not sure how you equate responsibility with taking out your own loans. Depending on the bulk of your tuition and the types of loans necessary for a person to fully cover tuition, it would be downright stupid to not take advantage of your family's resources.

If anything, it's the fiscally responsible and intelligent thing to do - borrow from family, because unless your parents are particularly draconian, they aren't charging the interest you'll get from private loans.

It's not like a dental student is human waste living off a trust fund - it's graduate school and an investment in yourself. It's well worth borrowing/taking from family or having your spouse help to offset costs.
 

rkamsterdam

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Why would you be in such a rush to pay off your loans? Spread the loans out and invest. Surely you will do better over the long term in the market than the interest of your loan. Plus, interest on loans is tax deductible.

jb!:)

I think JB makes a good point. If you can spread out your student loan payments over 30 yrs, why not. Since student interest loans are at relatively low interest rates, your return on an investment (say your practice) can overcome interest accrued on your loan - thus opportunity cost is avoided. simple finance guys.
 

Mia305

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Sure, parents aren't obligated to do it, but I can see why they would. I'm not sure how you equate responsibility with taking out your own loans. Depending on the bulk of your tuition and the types of loans necessary for a person to fully cover tuition, it would be downright stupid to not take advantage of your family's resources.

If anything, it's the fiscally responsible and intelligent thing to do - borrow from family, because unless your parents are particularly draconian, they aren't charging the interest you'll get from private loans.

It's not like a dental student is human waste living off a trust fund - it's graduate school and an investment in yourself. It's well worth borrowing/taking from family or having your spouse help to offset costs.


There is a difference between borrowing money from your parents with an intent to repay, and them outright paying for it. Could my parents afford to pay for my dental school education? Yes, they probably could. Are they going to? Not a chance. Paying off loans is a great way to learn financial stability and responsibility, and I have no problems with that.
 

Montserrat

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There is a difference between borrowing money from your parents with an intent to repay, and them outright paying for it. Could my parents afford to pay for my dental school education? Yes, they probably could. Are they going to? Not a chance. Paying off loans is a great way to learn financial stability and responsibility, and I have no problems with that.

If a person requires having loans to learn financial responsibility, heck, go for it. I'd have enough on my plate with financing a private practice, downpayment on a house, family expenses, and etc.There are certainly ways to learn family financial responsibility. If I can eliminate another source of debt (student loans), I'm all the better for it. I certainly don't consider student debt a necessary portion of learning financial responsibility - I've had enough of this dose to know better.
 

Mia305

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If a person requires having loans to learn financial responsibility, heck, go for it. I'd have enough on my plate with financing a private practice, downpayment on a house, family expenses, and etc.There are certainly ways to learn family financial responsibility. If I can eliminate another source of debt (student loans), I'm all the better for it. I certainly don't consider student debt a necessary portion of learning financial responsibility - I've had enough of this dose to know better.


Well then let's just agree that our priorities are different then, as I do not have a family to care for (no plans for one in the near future either), do not plan on starting my own practice initially, and do not plan on immediately buying a house. Thus, the debt that I will take on from loans (which will be considerable since I am going to a private school), will become the main source of my financial responsibility.
 

Amalgam4U

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well, in any case, there will be a large sum of money involved even if you go to a public d-school, and someone will have to pay for it, whether it be you after you graduate or your family (to be repaid or not).

My point is not to expect the debt to go away or have unreasonably optimistic expectations about how fast you can pay off your dental school debt, because of the magnitude of the debt :eek:,
earning potential in the early years of working :confused:,
and that the best thing to do financially or for personal reasons is not always to pay off the debt as soon as possible :idea:.

@doc: how are you getting half your expenses paid for? Which school are you going to/how much does it cost? It's much easier to get scholarships/grants in undergrad than it is in dental school. It's not like a PhD program, in which everyone wants to pay for your education. Even in the most expensive private schools, there is almost no free money floating around...or I haven't been able to find any at least. Loans are pretty much it...:thumbdown:
 

ttc23

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I think JB makes a good point. If you can spread out your student loan payments over 30 yrs, why not. Since student interest loans are at relatively low interest rates, your return on an investment (say your practice) can overcome interest accrued on your loan - thus opportunity cost is avoided. simple finance guys.

could you do the math for me on 30 yr plan? suppose I come out with 300k debt.. I have thought about 30 yr repayment since I realized 3-5 years plan won't work for me
 

TempleDMDKrazd

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could you do the math for me on 30 yr plan? suppose I come out with 300k debt.. I have thought about 30 yr repayment since I realized 3-5 years plan won't work for me


monthly payment: $2328.04
total interest paid: $538094.40 :eek:
total payment amount: $838094.40


you see over 30 years i rather take that 530k and buy a house rather than pay it back in interest....
 

Frederico Albin

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monthly payment: $2328.04
total interest paid: $538094.40 :eek:
total payment amount: $838094.40


you see over 30 years i rather take that 530k and buy a house rather than pay it back in interest....

WOW!!! You can buy or build an amazing practice with that type of money.

I'm reading through this thread and I can't believe with the amount of debt you guys are going to come out of dental school with. What happened to following your fellow dentist advice and going to the cheapest school? Why did all of you choose NYU? LOL jk

:p
 

ttc23

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monthly payment: $2328.04
total interest paid: $538094.40 :eek:
total payment amount: $838094.40


you see over 30 years i rather take that 530k and buy a house rather than pay it back in interest....

wow..how about 15 yrs plan.. o_O and 20 yrs..
 

TempleDMDKrazd

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wow..how about 15 yrs plan.. o_O and 20 yrs..

most loans are in the 10 year repayment plan...but for 15 and 20 years here goes:

15 years
monthly payment: $2971.83
total interest paid: $234929.40
total amount paid: $534929.40

20 years
monthly payment: $2622.49
total interest paid: $329397.60
total amount paid: $629397.60

and just for fun the standard 10 year payment plan:
total monthly payment: $3735.63
total interest paid: $148275.60
total amount paid: $448275.60

this is all at 8.6% interest rate
 

Montserrat

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Well then let's just agree that our priorities are different then, as I do not have a family to care for (no plans for one in the near future either), do not plan on starting my own practice initially, and do not plan on immediately buying a house. Thus, the debt that I will take on from loans (which will be considerable since I am going to a private school), will become the main source of my financial responsibility.

You're probably right. I suspect I'm a few years older than you. I don't have a family yet, but I've been thinking of starting a family sooner than later.

As for taking money from family - I don't see it as depriving myself of a life lesson, as the agreement can still be made contractual and legally binding. You can pay your family back in totality and more with greater ease. Perhaps it was my cultural rearing - but I'd rather keep money in the family. If I'm going to be paying interest, I'd rather be paying interest to benefit someone in my family.
 

ttc23

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most loans are in the 10 year repayment plan...but for 15 and 20 years here goes:

15 years
monthly payment: $2971.83
total interest paid: $234929.40
total amount paid: $534929.40

20 years
monthly payment: $2622.49
total interest paid: $329397.60
total amount paid: $629397.60

and just for fun the standard 10 year payment plan:
total monthly payment: $3735.63
total interest paid: $148275.60
total amount paid: $448275.60

this is all at 8.6% interest rate

Is 8.6% the highest rate or just common rate? 10 years sound affordable.. well.. if I could net 60000-80000 after tax
 

Mia305

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You're probably right. I suspect I'm a few years older than you. I don't have a family yet, but I've been thinking of starting a family sooner than later.

As for taking money from family - I don't see it as depriving myself of a life lesson, as the agreement can still be made contractual and legally binding. You can pay your family back in totality and more with greater ease. Perhaps it was my cultural rearing - but I'd rather keep money in the family. If I'm going to be paying interest, I'd rather be paying interest to benefit someone in my family.

I understand that logic completely. The point I was making had nothing to do with taking an interest free loan from your family (which I would of course do also, if I had the opportunity). I was talking more about them just paying for it outright, without expecting any repayment.
 
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