We are going to be drowning in debt!

[2PacClone23]

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http://www.finaid.org/calculators/loanpayments.phtml

Just go there, input about 20-30k from your undergrad years, and add about 250k from your dental school years. Some are more like NYU and USC (much much more).

Once the thing spits it out,

"It is estimated that you will need an annual salary of at least $386,670.00 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $257,780.00, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.1."

And that's for 10 years! How the hell are we going to be making 386k a year? Even if you increase your monthly payoff to 15%, that's still 257k a year. How the hell is any of this possible?


Can you imagine, if you go to USC or NYU? That's 400k plus about 20k from undergraduate studies, and it's 580k a year for 10 years to make up for it!


This is ridiculous!

 

[wired202808]

http://www.finaid.org/calculators/loanpayments.phtml

Just go there, input about 20-30k from your undergrad years, and add about 250k from your dental school years. Some are more like NYU and USC (much much more).

Once the thing spits it out,

"It is estimated that you will need an annual salary of at least $386,670.00 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $257,780.00, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.1."

And that's for 10 years! How the hell are we going to be making 386k a year? Even if you increase your monthly payoff to 15%, that's still 257k a year. How the hell is any of this possible?


Can you imagine, if you go to USC or NYU? That's 400k plus about 20k from undergraduate studies, and it's 580k a year for 10 years to make up for it!


This is ridiculous!

you had issues in your post bacc program and now you're preaching about imaginary debt... how bout getting into dental school first? wouldnt that be a better start.

 

[2PacClone23]

Please address the issue at hand. Even for a cheap state school, debt will be the death of us all.

 

[letsdoitbama]

Numbers based on repaying only 10% of income are 100% worthless. It worries me that that didn't cross your mind before posting that.

 

[2PacClone23]

I included 15% as well. What is the average payback rate? 20%? 35%?

 

[433439]

As long as more and more people continue to want to become dentists, they have the right to raise tuition in any way they feel it be justified.

 

[tinman831]

http://www.finaid.org/calculators/loanpayments.phtml

Just go there, input about 20-30k from your undergrad years, and add about 250k from your dental school years. Some are more like NYU and USC (much much more).

Once the thing spits it out,

"It is estimated that you will need an annual salary of at least $386,670.00 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $257,780.00, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.1."

And that's for 10 years! How the hell are we going to be making 386k a year? Even if you increase your monthly payoff to 15%, that's still 257k a year. How the hell is any of this possible?


Can you imagine, if you go to USC or NYU? That's 400k plus about 20k from undergraduate studies, and it's 580k a year for 10 years to make up for it!


This is ridiculous!

10% of your monthly income dedicated to paying back your loan? That's very unrealistic. Try 20-30%.

 

[white fang]

I included 15% as well. What is the average payback rate? 20%? 35%?

The less crap you buy when you are done with school, the more you can spend on payback. I plan on a roughly 50% payback rate until my debt is paid off.

These really are things you should have thought of before you started your masters program to get into dental school, at this point you shouldn't have freak out moments about the cost of DS.

 

[hardline]

Here's a post I found in the dental residents / practicing dentists section of the forum. Status of this person was resident.

"First, no one here can tell you whether or not it will be worth it. Some individuals have their own idea of how much a dental education is worth.

Second, Senpai has their information wrong. The going rate in CA, which is extremely saturated, is approx. 450/day. Do this 5-6 days a week and your looking at a 1st year associate gross income of some where in the 108K-129K range in a horrible market. If you are willing to move, your income will drastically change for the better. Additionally, your income is ONLY going to go up from here. I would not be surprised to see a general dentist somewhere in the 200K ball park 3-5 years out. With this kind of money, you can easily manage your debt if you live smart. By 10 years out, you should be in your prime. If you specialize, the 350k will be a drop in the bucket.

Hope this helps."

For me personally I think it will be smart to avoid the more saturated areas of dentistry.

 

[thyagar3]

Some more realistic numbers like 100k for undergrad and 400k for dental school at 7.9% comes out to being a little bit less than 5k a month for 15 years. As scary as this looks, I think its doable or atleast I hope so.😱

 

[2PacClone23]

The less crap you buy when you are done with school, the more you can spend on payback. I plan on a roughly 50% payback rate until my debt is paid off.

These really are things you should have thought of before you started your masters program to get into dental school, at this point you shouldn't have freak out moments about the cost of DS.

Yeah I understand. The site uses a 10%/15% payback rate calculator. I thought that was pretty standard. 20, 30 or 50% is pretty steep.

Damn I should have won the Mega Million yesterday!

 

[Dgeorg6]

I have seen some calculations where the suggest only paying 8% of your total income.. I honestly plan on giving 40%+ the 1st two years after school.. But my undergrad was free, and my dental school (if I make it to my state school..) will only be around 100k-140k when I get out

 

[wired202808]

Please address the issue at hand. Even for a cheap state school, debt will be the death of us all.

then dont go to dental school 😀

 

[2PacClone23]

then dont go to dental school 😀

Never! Just an aspect of d-school that doesn't get the attention!

 

[wired202808]

Never! Just an aspect of d-school that doesn't get the attention!

Haha everybody has debt in every medical profession, debt is discussed on this board once a month. I dunno what new light you're shining onto the topic. You should worry about getting into dental school and then worrying about debt, instead of obsessing over the imaginary debt from your imaginary acceptance.

 

[Bereno]

http://www.finaid.org/calculators/loanpayments.phtml

Just go there, input about 20-30k from your undergrad years, and add about 250k from your dental school years. Some are more like NYU and USC (much much more).

Once the thing spits it out,

"It is estimated that you will need an annual salary of at least $386,670.00 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $257,780.00, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.1."

And that's for 10 years! How the hell are we going to be making 386k a year? Even if you increase your monthly payoff to 15%, that's still 257k a year. How the hell is any of this possible?


Can you imagine, if you go to USC or NYU? That's 400k plus about 20k from undergraduate studies, and it's 580k a year for 10 years to make up for it!


This is ridiculous!

If you want yet another way to calculate this, take a look at my excel file and see what you think is reasonable... I plan on anywhere from 50% down. Then again, this is because I think this is "doable" 10% is nowhere near doable for DS. Remember, the majority of Americans make right around 50K a year. For them, 10% is more realistic because they have less discretionary income, and thus can only afford to pay about 10% of their income. Once you start increasing your income, you have more "room" to pay higher loan pmts. This means for higher income professions like dentistry, higher loan pmts are justified. Just a thought 🙂

 

[dantemac]

Ahh, the bi-weekly thread about the worries of debt.

 

[dmdluffy]

You could always stretch payments over 30 years if payments are to high, just sayin'.

 

[white fang]

Curious if anyone knows this for sure. If you take IBR or a 30 year term to repay a loan, is there any penalty for paying it off early?

I assume it is the same as my house mortgage, that I took at a 30 year term but pay it at about a 10 year pace and has no pre-payment penalty.

If this is the case, why doesn't everyone extend it 30 years and pay it off quicker in the months they are able to and have flexibility to do a lower payment in months money is tighter?

 

[UCLAzy]

Curious if anyone knows this for sure. If you take IBR or a 30 year term to repay a loan, is there any penalty for paying it off early?

I assume it is the same as my house mortgage, that I took at a 30 year term but pay it at about a 10 year pace and has no pre-payment penalty.

If this is the case, why doesn't everyone extend it 30 years and pay it off quicker in the months they are able to and have flexibility to do a lower payment in months money is tighter?

not everybody is smart with moneyz

 

[wired202808]

Curious if anyone knows this for sure. If you take IBR or a 30 year term to repay a loan, is there any penalty for paying it off early?

I assume it is the same as my house mortgage, that I took at a 30 year term but pay it at about a 10 year pace and has no pre-payment penalty.

If this is the case, why doesn't everyone extend it 30 years and pay it off quicker in the months they are able to and have flexibility to do a lower payment in months money is tighter?

IBR and a 30 year stretch isn't a fiscally smart move. First of all we have no knowledge on the future legislation which may or may not abolish IBR over several years and leave students saddled with massive debt. Second of all IBR is effective for those with low incomes, you hit up 100K or above you're less likely to get super favorable payments so it wont really matter. And third of all when you stretch your loans over 30 years you'll be paying so much extra in interest that its gonna cost double or more the initial loan amount. So IBR is a pretty bad idea if you ask me.

 

[little Buddy]

Curious if anyone knows this for sure. If you take IBR or a 30 year term to repay a loan, is there any penalty for paying it off early?

I assume it is the same as my house mortgage, that I took at a 30 year term but pay it at about a 10 year pace and has no pre-payment penalty.

If this is the case, why doesn't everyone extend it 30 years and pay it off quicker in the months they are able to and have flexibility to do a lower payment in months money is tighter?

Because people like to do things the hard way lol. Just make sure there are no pre-payment penalty in the loan and you're golden. Plus, the additional payment goes straight to principal, not interest.

 

[TheClutch]

if you plan to pay back fast, then why drag it out to 30yr?
plus, psychologically, you won't wanna pay more than the monthly payment once you get used to making money and spending it. And u probably won't.

we talked about debts and paying back excessively in Oct/Nov. Everyone should have a game plan by now.

 

[2PacClone23]

Student debt in this country is now more than credit card debt. The next bubble is about to burst.

 

[Kahr]

Edit: In case it's unclear, this has NOTHING to do with women and the military. 😉

 

[dantemac]

The Navy really is the best branch. Just saying. 😉

 

[thewingman]

Please address the issue at hand. Even for a cheap state school, debt will be the death of us all.

If you are so worried about all this debt, just don't go to dental school. No one is forcing you to go. Moreover, you should stop wasting money on post bacc programs to get in.

 

[goffdent]

It's really quite simple... choose the 30 year payment plan. Pay the minimum.. When you have extra, pay more. You can pay it back fast if you want. But why stick yourself to the 10 year plan if something hard comes your way. It's essentially an additional mortgage. What you really need to be planning for is setting aside retirement money, NOT worrying about this crap.


Join a military program, army, navy, air force, or even indian health services, etc.... Some states also provide rural dentist tuition reimbursement up to $100,000. stop freaking out.

Also, if you die, so does your debt. soo... So at least your spouse/family won't take that burden on.

 

[timwatley]

It's really quite simple... choose the 30 year payment plan. Pay the minimum.. When you have extra, pay more. You can pay it back fast if you want. But why stick yourself to the 10 year plan if something hard comes your way. It's essentially an additional mortgage. What you really need to be planning for is setting aside retirement money, NOT worrying about this crap.


Join a military program, army, navy, air force, or even indian health services, etc.... Some states also provide rural dentist tuition reimbursement up to $100,000. stop freaking out.

Also, if you die, so does your debt. soo... So at least your spouse/family won't take that burden on.

And spend your entire life in debt? House payments, practice payments, new car payments, kids college tuition? No thanks.

 

[white fang]

IBR and a 30 year stretch isn't a fiscally smart move. First of all we have no knowledge on the future legislation which may or may not abolish IBR over several years and leave students saddled with massive debt. Second of all IBR is effective for those with low incomes, you hit up 100K or above you're less likely to get super favorable payments so it wont really matter. And third of all when you stretch your loans over 30 years you'll be paying so much extra in interest that its gonna cost double or more the initial loan amount. So IBR is a pretty bad idea if you ask me.

Re-read what I wrote and re-reply. I am not sure if you only read half of it or misunderstood what I was asking.

 

[dantemac]

It's really quite simple... choose the 30 year payment plan. Pay the minimum.. When you have extra, pay more. You can pay it back fast if you want. But why stick yourself to the 10 year plan if something hard comes your way. It's essentially an additional mortgage. What you really need to be planning for is setting aside retirement money, NOT worrying about this crap.


Join a military program, army, navy, air force, or even indian health services, etc.... Some states also provide rural dentist tuition reimbursement up to $100,000. stop freaking out.

Also, if you die, so does your debt. soo... So at least your spouse/family won't take that burden on.

I am pretty sure you are wrong on the last part. Student debt is unforgivable in lots of cases. It would be passed onto someone....

 

[wired202808]

Re-read what I wrote and re-reply. I am not sure if you only read half of it or misunderstood what I was asking.

I wrote the right answer to an "interesting" question. IBR for dentists wouldn't make any sense.

 

[cmcner]

I wrote the right answer to an "interesting" question. IBR for dentists wouldn't make any sense.

It depends on the situation, it can definitely make sense for high debt programs.

 

[SoulPower]

I am pretty sure you are wrong on the last part. Student debt is unforgivable in lots of cases. It would be passed onto someone....

One word. Prenup

 

[white fang]

I wrote the right answer to an "interesting" question. IBR for dentists wouldn't make any sense.

No, you replied to half a question.

I asked: If you take IBR or a 30 year term to repay a loan

And then the rest of my post was asking about taking a loan over the maximum term and paying it off early.

Regardless, don't worry about it. Many posters already replied that this was the correct way to do pay off debt, just as I suspected as this is true with my home mortgage already.

 

[Cello]

The only cases where one would leave behind debt for their family in cases of death would be either in marriage, or if a family member co-signed for the loan(s).

So for those of us who are married, it might be best to divorce, sign a prenup (as suggested above by SoulPower) and remarry again. 😉

 

[2PacClone23]

damn 50% is nuts to pay back per month for a few years

 

[dantemac]

Most people, especially international students, will have a co-signer. The debt would be unforgivable in their case.

 

[wired202808]

No, you replied to half a question.

I asked: If you take IBR or a 30 year term to repay a loan

And then the rest of my post was asking about taking a loan over the maximum term and paying it off early.

Regardless, don't worry about it. Many posters already replied that this was the correct way to do pay off debt, just as I suspected as this is true with my home mortgage already.

how is this the "correct" way to pay off debt? you're similar stretching it out to 30 years and doubling or tripling the original pmt. But hey your money so you can do as you like.

 

[white fang]

how is this the "correct" way to pay off debt? you're similar stretching it out to 30 years and doubling or tripling the original pmt. But hey your money so you can do as you like.

Let me break it down for you.

By stretching it out as long as a lender will let you, you get the minimum monthly payment as low as possible. This means that if you don't have extra cash one month here or there, you can pay the minimum. This allows you to have some liquidity in your take home income.

In months that you do have extra money, you pay down as much of the debt as possible. As a general rule, you pay extra every month, as much as you can. You can pay at a 5 year, 10 year, 20 year rate. You can pay it as fast as you want or as slow as a 30 year low (or whatever the max term is).

This gives you the most flexibility with your payback and as long as there isn't a prepayment penalty you have no downside (as long as you are disciplined enough to pay the loans back quicker than your 30 year term).

As far as I know, you don't get an interest break by agreeing to a shorter term loan like you do for a mortgage (please someone correct me if I am wrong).

 

[DJPaulyDDS]

yea just like when you have a paper due in three weeks, you don't save it until the night before. right. Get rid of your debt as soon as possible!! By selecting a 30yr repayment option you are already committing to having long term debt. You will become complacent. Its human nature.

What are you going to do when you're 5-10 years out and you want to purchase a practice and banks see 250k+ of outstanding debt? How about that new car? or that house your wife is pushing you for? kids? vacation?

Free yourself from the modern day slavery of debt, as soon as possible.

Let me break it down for you.

By stretching it out as long as a lender will let you, you get the minimum monthly payment as low as possible. This means that if you don't have extra cash one month here or there, you can pay the minimum. This allows you to have some liquidity in your take home income.

In months that you do have extra money, you pay down as much of the debt as possible. As a general rule, you pay extra every month, as much as you can. You can pay at a 5 year, 10 year, 20 year rate. You can pay it as fast as you want or as slow as a 30 year low (or whatever the max term is).

This gives you the most flexibility with your payback and as long as there isn't a prepayment penalty you have no downside (as long as you are disciplined enough to pay the loans back quicker than your 30 year term).

As far as I know, you don't get an interest break by agreeing to a shorter term loan like you do for a mortgage (please someone correct me if I am wrong).

 

[white fang]

yea just like when you have a paper due in three weeks, you don't save it until the night before. right. Get rid of your debt as soon as possible!! By selecting a 30yr repayment option you are already committing to having long term debt. You will become complacent. Its human nature.

What are you going to do when you're 5-10 years out and you want to purchase a practice and banks see 250k+ of outstanding debt? How about that new car? or that house your wife is pushing you for? kids? vacation?

Free yourself from the modern day slavery of debt, as soon as possible.

You realize you can pay down your debt equally quickly with a 30 year loan, correct?

Like I said, this method would work for those with self and financial discipline. On my 30 year mortgage I have paid down about 45% of the principal in the first 3 years. It works for me, it may not work for those concerned with keeping up with the Jones'.

 

[wired202808]

Let me break it down for you.

By stretching it out as long as a lender will let you, you get the minimum monthly payment as low as possible. This means that if you don't have extra cash one month here or there, you can pay the minimum. This allows you to have some liquidity in your take home income.

In months that you do have extra money, you pay down as much of the debt as possible. As a general rule, you pay extra every month, as much as you can. You can pay at a 5 year, 10 year, 20 year rate. You can pay it as fast as you want or as slow as a 30 year low (or whatever the max term is).

This gives you the most flexibility with your payback and as long as there isn't a prepayment penalty you have no downside (as long as you are disciplined enough to pay the loans back quicker than your 30 year term).

As far as I know, you don't get an interest break by agreeing to a shorter term loan like you do for a mortgage (please someone correct me if I am wrong).

Your logic isnt working when it comes to this sort of math. Lets test out your math, if you take out 160K in grad plus loans 7.9% with a 30 yr repayment method and add another $1,000 a month after the 2nd year, you would have spent 242K and paid it off in 19 years and 8 months. Meanwhile if you would have taken out the save loan for 10 years you would have spent 231K and repayed it in 10 years. Obviously under the 10 year rule you would owe around $1,900 a month in payments but you would still spend $2.162 a month for 19 years under the 30 year option. So obviously it makes no sense to stretch out your loan for another 9 years and over spent by another 9 to 10K. Its a lot more logical and simple to live a very frugal life for 10 years to pay off the loans rather than try to guesstimate how much you'll earn later. Even when you earn 150k to 180K you wont add another 5k to your monthly payment so hence at the end of the day you're either going to overpay for this "scheme" or you'll break even and still wind up taking more than 10 years to repay it.

 

[white fang]

Your logic isnt working when it comes to this sort of math. Lets test out your math, if you take out 160K in grad plus loans 7.9% with a 30 yr repayment method and add another $1,000 a month after the 2nd year, you would have spent 242K and paid it off in 19 years and 8 months. Meanwhile if you would have taken out the save loan for 10 years you would have spent 231K and repayed it in 10 years. Obviously under the 10 year rule you would owe around $1,900 a month in payments but you would still spend $2.162 a month for 19 years under the 30 year option. So obviously it makes no sense to stretch out your loan for another 9 years and over spent by another 9 to 10K. Its a lot more logical and simple to live a very frugal life for 10 years to pay off the loans rather than try to guesstimate how much you'll earn later. Even when you earn 150k to 180K you wont add another 5k to your monthly payment so hence at the end of the day you're either going to overpay for this "scheme" or you'll break even and still wind up taking more than 10 years to repay it.

👎

No time to reply on the content of your post tonight, but either you don't understand or you are being difficult on purpose. With you, it is difficult to tell.

 

[wired202808]

👎

No time to reply on the content of your post tonight, but either you don't understand or you are being difficult on purpose. With you, it is difficult to tell.

I cant help you if you dont understand my argument. I just used simple math.

 

[SexyMariGal]

When you are paying off your loans or mortgage, how much of your payments are going to the interest, and how much is going to the principal? Do you get to pick and choose which part to pay off first? The only thing about stretching out loans to longer terms just means you're going to pay more interest on the overall loan if you're only making the the minimum payments. So how does it break down?

 

[wired202808]

When you are paying off your loans or mortgage, how much of your payments are going to the interest, and how much is going to the principal? Do you get to pick and choose which part to pay off first? The only thing about stretching out loans to longer terms just means you're going to pay more interest on the overall loan if you're only making the the minimum payments. So how does it break down?

Initially the interest payments make up the majority of your total monthly payment, after a certain "tipping point" you'll begin to pay the principal. Here's a good link to help you visually understand the concept.

https://en.wikipedia.org/wiki/Amortization_schedule

 

[DJPaulyDDS]

No, kidding. It has to do with complacency, and the fact that you will undoubtedly be taking out more loans if you wish to own a practice. It doesn't make sense, giving yourself that "cushion" can very be detrimental.

You realize you can pay down your debt equally quickly with a 30 year loan, correct?

Like I said, this method would work for those with self and financial discipline. On my 30 year mortgage I have paid down about 45% of the principal in the first 3 years. It works for me, it may not work for those concerned with keeping up with the Jones'.

 

[wired202808]

No, kidding. It has to do with complacency, and the fact that you will undoubtedly be taking out more loans if you wish to own a practice. It doesn't make sense, giving yourself that "cushion" can very be detrimental.

complacency aside it makes no financial sense to spread it over 30 years. I ran the numbers using fangs "master plan" and you wind up spending an additional 10K over the term of the loan and it takes twice as long (20 years vs. 10 years) to repay the loan. Plus the additional monthly payments that are necessary to pay off the 30 yr loan earlier are comparable to the monthly payments of a 10 year loan.

 

[white fang]

complacency aside it makes no financial sense to spread it over 30 years. I ran the numbers using fangs "master plan" and you wind up spending an additional 10K over the term of the loan and it takes twice as long (20 years vs. 10 years) to repay the loan. Plus the additional monthly payments that are necessary to pay off the 30 yr loan earlier are comparable to the monthly payments of a 10 year loan.

You have no idea what you are talking about. You don't know how much extra I or anyone else would be putting down each month.

It is not a 'master plan'. You realize how many people do this with their home mortgage already? Having the option for a lower monthly payment is important for a variety of reasons that may come up in life. You still have the ability to pay it off faster than the loan you took out.

Grow up, get some experience, stop acting like an expert that you are not. I remember a month or two ago you made a thread because you didn't even know how to calculate interest on a loan.