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On Average, how long does it take a dentist to payoff dental school loans?

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Nismoboy

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Let's say a dental student graduates with $200,000 loan total, how long will it take that dentist to pay it all of assuming that he/she makes $90-$100K to start off....5 years? 10 years? 20 years?
 

Dentalist

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In average, UOP graduates pay off their debts within 7~9 years.
 

dudelove

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You just answered your own question. Subtract taxes and living expenses and such from the 100k and that is what is remaining to pay off your school loan for the first year. Add some more to that number every year and voila...you will have your answer.

Originally posted by CopticOrthodox
Let's say a dental student graduates with $200,000 loan total, how long will it take that dentist to pay it all of assuming that he/she makes $90-$100K to start off....5 years? 10 years? 20 years?
 

grettlin2

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If you borrow 200k, my dentist said you can pay off around 3 years. If you don't mind to live in apartment for another three years.
 

Dr.SpongeBobDDS

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Originally posted by grettlin2
If you borrow 200k, my dentist said you can pay off around 3 years. If you don't mind to live in apartment for another three years.

Wow!!! ~$70,000 a year towards loan repayment. Assuming you land a topnotch associateship where you start out earning $100,000 and get a good accountant who only let's the government take a third, you could come up with that kind of money. But... and here's the kicker... what are you gonna live on?

Depending on how miserly you want to live, I think 5-10 yrs. is a reasonable timetable for loan repayment.
 
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The Musketeer

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Hey keep in mind that you have to account for the interest too!
 
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sxr71

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I get the impression that this is more like paying off a home mortgage and that you're looking at 10-15 years. What's a $100,000 a year after taxes? Maybe $60,000. That's $5000 a month.

A $200,000 loan on a 10 year repayment plan costs about $2200 a month leaving you with $2800 a month to pay for your apartment, your car payment, your gas bill, your cell phone, your phone bill, your electric bill, clothes, food, insurance and all sorts of other stuff that you need. On top of that you want to start a basic savings plan for retirement.
 

drPheta

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The answer to this question also depends on so many factors, like how you want to live, how much you borrowed, etc. Do you want to have $40,000 in the bank after you paid off your loans for that year? Or do you want to have $10,000 in the bank after you paid off your loans for that year? The amount you're willing to fork out for loan repayment, and the amount your willing to live with after you've done so greatly changes the length of repayment. Is your debt 100K or 300K? How much will your spouse make and contribute to your debt repayment? Do you want to start a savings plan ASAP?

Since you chose $200K let's play with 200K numbers.

I posted a similar calculation in another thread using $300K, but if you took out 200K for school and wanted to pay it off in 10 years. The following would apply....

If you want a worst case scenario picture, we can do this.

Loan amount $200,000
= 2,220 monthly payments (6% interest)

Say you took the entire loan out during your first year (which the school and lenders won't let you do, but this is hypothetical and makes calculations easier), and the interest was accruing on that at 6%
= 48000

So, at the end of 4 years you capitalize the loan and owe $248,000


With a 10 year repayment plan, your $2,220/mo payments now become....$2,754/mo = $33,048/year

You will be in the 30%-40% tax bracket , and if you want to have $40,000 liquidity, you will need to earn:

liquidity + loan payments + tax = salary

$40,000 + $33,048+ .4(salary) = salary

salary = $121,747

--------------------------


Keep in mind, this is so that you can have $40,000 to spend as you please (savings, home down payment, food, clothes, car, whatever).

If you were happy with $10,000 in the bank, then you could either earn less money and still be happy, or make larger payments and pay off your debt even faster. Hope I made sense.

So, if you're happy with $10,000/year to spend as you please, then a salary of $100K would get you out of debt in about 4 - 6 years, depending on how interest pans out (100K - tax = 60K - 10K in bank = 50K .... leaves you with 4166/month to pay off loan). However, I highly doubt you'd get by on $10,000/year.
 
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babinski bob

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actually, it may just be best to consolidate your loans and pay it off over 30 years. If you can considolidate it at low interest (3-6%), it's almost a given that you'll make more money investing in the stock market (which averages 9-12%/year) or real estate which is often higher. Plus, if you decide to pay your loans off immediately, that means you're putting less money into your retirement account during the early years and which is critical to building a nice nest to retire on. We all know how compounded interest works and it would be to your advantage to pay off that 200K loan over 30 years. Additionally, you'll actually be able to live a normal, comfortable life after graduating as opposed to living like a student for several more years.

Assume student loans at 5%
Pay off over 8y 2532/mo
Pay off over 30y 1073/mo

Just think, you could invest an extra 18K a year in stocks, real estate, etc... which is going to give you a MUCH MUCH better return compared to the extra money you're forking over in favor of a longer payment period.
 
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drPheta

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Bob, while you bring up a very good point, you have to remember that 3% of 200K over 30 years will still cost $40,000 more than had you paid off the debt off in 10 years at 6%.

($376,408 with consolidating at 3% vs. $330,397 paid off in 10 years at 6%)

I know that $40,000 over a difference of 20 years is kinda of insignificant, but we also have to factor in inflation (which can fluctuate), opportunity cost, and the fact that getting a consolidated loan at 3% will not happen in 4 years when most of us graduate and approach the end of our grace period (which by the way is the best time to consolidate your loans...about 1-2 months before your grace period ends).

Also, I don't think people are consolidating their loans at this moment at 3% (maybe I'm wrong), but I thought they were closer to 5% on consolidation rates at this moment.

One way to really determine if consolidating is worth it to you is to look at the spread between the current interest you're paying (or will be paying) and the rate you get when you do consolidate. Obviously, the bigger the spread, the more worth it consolidating is. Also, remember that you can only consolidate once (so I'm told), and that interest rate is locked in. So you might want to consider paying off your debt ASAP while the bull market is charging (which it will in 4 years when we graduate...typical business cycle), and then think about consolidating when another bear market comes.

Again, financial decisions and outcomes are not univariabled. There are so many things to consider. This is probably the main reason why it's so important to have a financial planner/advisor/broker/manager/whatever to look after your money so that you can reach your goals faster. Not all investments are good, and we'll be spending our next good years learning dentistry. Just think, insider trading, chapter 11s, and crashes are always going to happen.

Best bet...MARRY RICH! :D
 

3rdMolarRoller

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Get your MBA, learn how money works and that debt will vanish. Not easily, but it will.

Biggest problem with dentist is lack of investing skills, hence why I went and got an MBA before dental school.

They all talk of paying it off in 5 years...whats the point??? If you can make 8% in safe investments and pay your student loans at 4%...why pay off the loan fast???

Do I return my student loans...no!

Last sept I put my excess student loans with Carlise company (after I did lots of research)...lets just say I paid off well more then my accrued interest. (stock symbol CSL. Cashed out yesterday).

Its tricky where to put your money, but with the right knowledge you got it made. So why did I pick Carlise...welll they make lots of building materials and what did the housing market do last year...shot up. The company is at more then it could handle so it will probably stay where it is or go down so I pulled out.

Time for me to hunt for the next one!
 
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drPheta

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Broc, you've got balls. Then again, your balls earned you almost $20/share. Sweet find, but I hardly call the stock market a safe investment for the short term.
 

sxr71

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Originally posted by babinski bob
actually, it may just be best to consolidate your loans and pay it off over 30 years. If you can considolidate it at low interest (3-6%), it's almost a given that you'll make more money investing in the stock market (which averages 9-12%/year) or real estate which is often higher. Plus, if you decide to pay your loans off immediately, that means you're putting less money into your retirement account during the early years and which is critical to building a nice nest to retire on. We all know how compounded interest works and it would be to your advantage to pay off that 200K loan over 30 years. Additionally, you'll actually be able to live a normal, comfortable life after graduating as opposed to living like a student for several more years.

Assume student loans at 5%
Pay off over 8y 2532/mo
Pay off over 30y 1073/mo

Just think, you could invest an extra 18K a year in stocks, real estate, etc... which is going to give you a MUCH MUCH better return compared to the extra money you're forking over in favor of a longer payment period.

I completely agree. I think that if you can consolidate at 3% it is best to go for 30 years (and you can tax deduct the interest). At 6% I would be a little more concerned about that and go for 20 years. It really depends on the sort of economy we have a few years after we graduate.
 

3rdMolarRoller

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You got it...short term is a bitch. With all the taxes and risk, you gotta do your research. I have a few tax shelters set up so I will pay the min, but the majority of my money is for the long term. My 5 year return is about 10%.....the stock market for most long term investors yields around 12% so I'm a little behind ,but 5 years is still considered short term.

Real estate is where the money is. 5 years ago I bought 6 pieces of land for 5k each in Palm coast FL and now they are worth 35k each!

I worked hard my whole life and it is starting to pay off. My parents had nothing when they moved here from Poland (although I was born in the states) and I was brought up in a poor home. Its wonders what a hard life will do to you!
 
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aphistis

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I'm debt-averse and comfortable with being that way. :D I'll take my first two or three years devoting my salary completely to paying off my and Rachel's student loans, while we live off her (in all probability) comfortable salary as an entry-level actuary. All of you with MBAs who are able to interpret the business section as naturally as you breathe--major props to you! As for me, however, I'll live fairly modestly for a couple years, and then Rachel and I start having fun with our incomes. :hardy:
 

ItsGavinC

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Originally posted by Brocnizer2007
Get your MBA, learn how money works and that debt will vanish. Not easily, but it will.

I appreciate your viewpoint, but it doesn't take an MBA to pay off student loans OR invest in the market.

In fact, it doesn't even take an MBA to run a business, much less a successful one. I've been involved with our family business long enough to know this.

In fact, when it comes to running a dental office, several good courses in organizational behavior would probably empower the dentist moreso than business policy, business negotiations, operations, or marketing courses.

Having said all that, I never knew that you had your MBA, and find it very cool that you do!
 

3rdMolarRoller

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You are right itsgavinc, but there are opportunities in an MBA program that present themselves that you would not get from other places.

For instance, we had $500,000 in real money in the stock market that ONLY students controlled...losses were real losses and the profs were not very happy. Many of our professors are/were CEO's, CIO's, CFO's, COO's...one of our professors is the CIO for Dunn and Bradstreet.

What I'm trying to get across is that you get exposed to some very very succesful people and get many viewpoints to tackle the same problem that all may work. Business is a huge learning experience and it is good to learn from many and not just a few.

The best thing I liked about my program is that it is case study based so it wasn't just learning theory, but applying your know how to get a solution.

One last point, when I graduated there were 3 physicians and 2 dentist and I was close to them all and they felt it was one of the best things they could have done.

Not saying an MBA will give you answers to everything, but it lets you play with money that isn't yours and you learn quickly from your mistakes with out paying for them :D The key is to find a good program, bec many just collect your money and give you a degree.
 

yankpak786

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Bringing this thread back from the dead...
Let's say I plan on being in $500,000 in debt from NYUCD and about 20K from undergrad...

How long would it take me to pay it off, considering I'd be living with my parents (have no living expenses) for about 5 years after I graduate and do my residency?
 
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Silent Cool

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Bringing this thread back from the dead...
Let's say I plan on being in $500,000 in debt from NYUCD and about 20K from undergrad...

How long would it take me to pay it off, considering I'd be living with my parents (have no living expenses) for about 5 years after I graduate and do my residency?

Depends on how much you are making. In NYC, you are looking at high taxes. Even if you make 150K, I'm guessing it will take you ~10 years, because you should be saving some money for retirement, and you need to pay for malpractice, disability, health, etc...
 

Bis-GMA111

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Bringing this thread back from the dead...
Let's say I plan on being in $500,000 in debt from NYUCD and about 20K from undergrad...

How long would it take me to pay it off, considering I'd be living with my parents (have no living expenses) for about 5 years after I graduate and do my residency?

try to get into a cheaper school.
 
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yankpak786

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Depends on how much you are making. In NYC, you are looking at high taxes. Even if you make 150K, I'm guessing it will take you ~10 years, because you should be saving some money for retirement, and you need to pay for malpractice, disability, health, etc...
If I pay it off 90K a year at a time, is it feasible to be done in 5-6 years?
 

r2thekesh

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Um...you're going to be worse off financially if you pay off your loans right away. In reality you want to put away to retirement as much as you can. The compounding interest will way outpace your loan debt. 5 years out of school is when you can command a bigger salary, and pay massive amounts towards loans. Moving to a state with a lower tax burden is also ideal if you're willing to leave for a few years and come back. The difference in taxes paid between Wyoming and California could be 30K for an equivalent position. If you spent 10k on flights to the beach per year, you'd still end up ahead.
 
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yankpak786

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Um...you're going to be worse off financially if you pay off your loans right away. In reality you want to put away to retirement as much as you can. The compounding interest will way outpace your loan debt. 5 years out of school is when you can command a bigger salary, and pay massive amounts towards loans. Moving to a state with a lower tax burden is also ideal if you're willing to leave for a few years and come back. The difference in taxes paid between Wyoming and California could be 30K for an equivalent position. If you spent 10k on flights to the beach per year, you'd still end up ahead.
Yeah, I think moving to some city where cost-of-living is low would be ideal for me. I looked at Spokane, Wash and Tyler, TX... all of them pay very well for dentists but the crime rates are high. :/
 

EasTexan

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Yeah, I think moving to some city where cost-of-living is low would be ideal for me. I looked at Spokane, Wash and Tyler, TX... all of them pay very well for dentists but the crime rates are high. :/

I live in one of those... (guess...) and there seems to be a dentist on every corner, but you're right the compensation here is one of the highest in the state. You're also correct about cost of living, it's nice. Crime is only a problem in certain areas, just like any city.
 

yankpak786

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I live in one of those... (guess...) and there seems to be a dentist on every corner, but you're right the compensation here is one of the highest in the state. You're also correct about cost of living, it's nice. Crime is only a problem in certain areas, just like any city.
Haha nice, Tyler, TX or Odessa, TX? Both of those cities have very high dental wages. Yeah, so in your opinion, it's a relatively safe city to reside in post getting your DDS?
 

asusundevilll

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no way, def. can't be more than 20 if you're making all the right moves lol.
You should try visiting dental town DDS and ask if dental education is worth 500k haha. You will be surprised what almost every single dentist days....

500,000 over 20 years your looking at around $4000 a month for 20 years lol. That is ridiculous.
 
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yankpak786

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You should try visiting dental town DDS and ask if dental education is worth 500k haha. You will be surprised what almost every single dentist days....

500,000 over 20 years your looking at around $4000 a month for 20 years lol. That is ridiculous.
I absolutely agree, I don't think it's worth 500K either! But given my situation and affinity for NYC, I'm gonna have to take this huge hit. I hope to have it paid within 10 if I'm being honest... lol it's gonna be a pain in the ass for a long time I guess.
 

EasTexan

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Haha nice, Tyler, TX or Odessa, TX? Both of those cities have very high dental wages. Yeah, so in your opinion, it's a relatively safe city to reside in post getting your DDS?
Tyler. I've never heard of Tyler or the surrounding area being considered dangerous. There are parts that are more run down and prone to crime than others, but no different than any other city. There are also large areas that are super swanky and crime is almost unheard of. So yea, completely fine area to live.

Wait, no, it's super dangerous, there are no jobs, and the pay is terrible!!! We don't need any more dentists here! :p
 
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Silent Cool

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Tyler. I've never heard of Tyler or the surrounding area being considered dangerous. There are parts that are more run down and prone to crime than others, but no different than any other city. There are also large areas that are super swanky and crime is almost unheard of. So yea, completely fine area to live.

Wait, no, it's super dangerous, there are no jobs, and the pay is terrible!!! We don't need any more dentists here! :p


Speaking of Tyler there is an incredible OMS practice for sale in that area:

http://www.dentaltown.com/dentaltown/ClassifiedAds.aspx?action=DETAILS&aid=71263
 

yankpak786

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Tyler. I've never heard of Tyler or the surrounding area being considered dangerous. There are parts that are more run down and prone to crime than others, but no different than any other city. There are also large areas that are super swanky and crime is almost unheard of. So yea, completely fine area to live.

Wait, no, it's super dangerous, there are no jobs, and the pay is terrible!!! We don't need any more dentists here! :p
Ahhh, good to hear! Def. would consider a move there for a few years, after earning a DDS. :)
 
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