How feasible is it to pay off debt in a reasonable timeframe?

[WantonLecher]

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Do you want to rub it in some more? 🙄

Some peope lack.

 

[sharksurfer]

i know a 2nd year at nyu taking the max loan amount and is still carrying about 80k in loans from undergrad(absolutely insane if u ask me). i dont even want to know what his monthly payments are gunna look like!😱 The more i read this thread, the more i am motivated to one day specialize

 

[jmt1984]

Here's one investment: our education and a future dental practice. Whether or not we understand the finance behind it, we're all here because we believe that the reward for taking on such a loan is well worth the interest paid.

dead on...requires commitment and hard work, but nothing we should be afraid of eh?

 

[iwannabadentist]

The interest is accounted for in the payment scheme. In my simple model, you are spending $2209 each month in both scenarios; i dont see how there is any room to argue with my logic. Although its over-simplistic, it proves a law that most people learn in finance 101, thats the law of compounding interest. As i said earlier, It works solely because your investment is earning a greater return than the interest accruing on your loan. Not to mention, if you're guaranteeing a bank that you'll be saving over the course of 30 years, you're likely to garner a better return than 20 years (i did not account for this as i had accounted for the nominal higher interest rate of a 10 vs. 30 year loan). I kept the rates the same. After giving it some thought, there is one likely hypothetical that could put the 10 year loan ahead of the 30 year loan: once the loan is payed off it will reflect in your credit and you'll be able to leverage more debt at that time increasing any returns on further investment. However, this seems unlikely since the ones who pay loans off in such a short period are too debt averse to take on such a rewarding strategy.

hey im sorry, i made a mistake in reading your model. sure it makes sense when you put it like that but like previous posters pointed out, its very hard to find investments that will PROMISE a compounded 8% return. call me crazy, but i am pretty confident that if I live frugally (and am not the only income source of course), I will be able to stick by the 10 year plan and still have enough money saved up for a practice (at least a partnership) after 5 years out of school. but we'll cross that bridge when we get to it...for now, we should all enjoy the coming 8 months before our life in hell starts for 2 years!

i would also like to thank everyone for their great opinions on this matter and i apologize if i had offended anyone with mine. i guess in the end we can all agree to disagree if it comes down to it 👍

 

[SiemReap]

hey im sorry, i made a mistake in reading your model. sure it makes sense when you put it like that but like previous posters pointed out, its very hard to find investments that will PROMISE a compounded 8% return. call me crazy, but i am pretty confident that if I live frugally (and am not the only income source of course), I will be able to stick by the 10 year plan and still have enough money saved up for a practice (at least a partnership) after 5 years out of school. but we'll cross that bridge when we get to it...for now, we should all enjoy the coming 8 months before our life in hell starts for 2 years!

i would also like to thank everyone for their great opinions on this matter and i apologize if i had offended anyone with mine. i guess in the end we can all agree to disagree if it comes down to it 👍

Sure, this argument is similar to arguing politics-- truthfully we know jack ****e about neither. And part of me wants to pay off that debt ASAP because it just sounds and feels like the correct way to go. I think there is a general consensus that the faster you pay your loan the better off you are, and this public sentiment stems from the notion that debt is bad. I tend to think of debt as neutral. It is good that it can be used as a tool for advancement as is the case with student loans or capital to buy a dental practice, or it can be bad as is the case with most credit cards/finance companies. I play devil's advocate in an attempt to educate most biology majors who know little to zero about finance --> There is an legitimate argument for either side, do as you feel comfortable.

 

[yuppers]

Siemreap,
here are a couple questions for you that I posted earlier, but I think you missed it.

What you are saying makes sense, but a few quick things. Can you run the numbers for me using a $300k debt? Also, how feasible is it to get a 8% return on an investment consistently for 10 or 30 years?

 

[SiemReap]

Siemreap,
here are a couple questions for you that I posted earlier, but I think you missed it.

hey sorry, PM me your email address and i'll send you my .xl model for you to tinker with

 

[yuppers]

hey sorry, PM me your email address and i'll send you my .xl model for you to tinker with

hey, no problem. Check your pm. thanks again.

 

[prazmjou]

Do you want to rub it in some more? 🙄

haha you'll be fine. We all get to pursue our dream in becoming dentists when many people just want to get in somewhere

 

[SuperTank]

I started following this thread yesterday... can everyone just stop posting on it so it goes off the first page? I get depressed every time I see the name!

It looks like this to me:


****Official Acceptance thread****
**Class of 2014!!!**
What are my chances?
Anybody in LA area looking for a study partner?
Under 3.0 club, what have YOU heard?
11/18 DAT done, should I retake?
YOU'LL NEVER MAKE A RED CENT BECAUSE YOU'LL BE PAYING OFF DEBT UNTIL THE DAY YOU DIE!!!!
NYU vs. BU ... Help me make my decision!
Is anybody doing military dentistry? Worth it?


I think I'm going to try to find an accountant to date my sister and then force him into doing all my financial stuff. He'll be obligated, and I won't have to deal with it!

 

[supraeli]

i want to bring this thread back up to the top, because i feel it is very relevant to all the students who are being accepted now.

i plan on taking 250K in loans, and have been stressing over these figures for a while now. from what i understand, these models have been a bit too conservative: 6% interest?? right now its at 8%.

take home 90K salary from a 120K job?? you wish! add in malpractice insurance, STATE income tax, health etc.

my calculations say that we will be living off of 25K AT BEST for the first 10 years if paying off within 10 years is a priority... this does not include trying to get a private practice, because, well, you wont be able to afford one in the first 10 years (how can you take on another loan, when you are only making 25K?)

the only way out is to find an associateship that pays better than 120K or become a specialist. GOOD LUCK! i think the military is the only godforsaken way out of this darn mess.

thoughts? am i just crazy? or am i realistic?

 

[SuperTank]

i want to bring this thread back up to the top, because i feel it is very relevant to all the students who are being accepted now.

i plan on taking 250K in loans, and have been stressing over these figures for a while now. from what i understand, these models have been a bit too conservative: 6% interest?? right now its at 8%.

take home 90K salary from a 120K job?? you wish! add in malpractice insurance, STATE income tax, health etc.

my calculations say that we will be living off of 25K AT BEST for the first 10 years if paying off within 10 years is a priority... this does not include trying to get a private practice, because, well, you wont be able to afford one in the first 10 years (how can you take on another loan, when you are only making 25K?)

the only way out is to find an associateship that pays better than 120K or become a specialist. GOOD LUCK! i think the military is the only godforsaken way out of this darn mess.

thoughts? am i just crazy? or am i realistic?

There is also the HPSA scholarship, but they only give scholarships to 10% of applicants (I think it was around 70 last year).

 

[2thmaker]

For you predents who have yet to make a final decision on schools or have yet to apply: be practical and pick the least expensive school you get into or apply to less expensive schools. You will all graduate with a doctoral degree; and you can specialize wherever you go.

I went this route; graduated in 2005 from a state school owing less than 130K when that number could have easily exceeded 250K. I did not have the greatest experience (who does really, unless you go to UOP) but looking back on this I'm happy that my student loans are not overwhelming. It can be done. you also have to keep in mind that banks will look at your overall debt when deciding how much to lend a prospective borrower. There are many people I know or know through a friend who are regretting their decision to go the school of their choice when they had less expensive altenatives. It changes your lifestyle for years to come post graduation, especially if you receive no help financing this debt.

My $.02

 

[supraeli]

i think alot of people here are from california, and all instate schools for us are 250K, so that advice doesn't help us. thanks for the advice though!

from what i know, it will be probably be impossible to do a 10 yr repayment for anyone with 250K+, unless you have a spouse paying for living expenses.

30 year repayment it is, guys! just gotta work hard and pay more to dig into principle, i guess, and maybe pay it off in less time. hopefully, market projections will be correct for us, and we will have higher salaries due to higher retirement rates than entrance rates.