We are going to be drowning in debt!

[wired202808]

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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.

You should know better than twist words around, I didn't know how student loans are handled in terms of interest because I received a ugrad scholarship and have no school debt 🙂 Unless you plan to put down 5k extra a month, which you wont, you'll gain nothing by stretching out your loan. I'm just trying to point out the fallacy of this plan so other pre-dental students wont have an inclining that this is financially worth it. After all is said and done this is gonna be a -10 here +10 there and you'll wind up paying out the same amount or more (as evidenced based on a real life example that I gave.)

That's all. Don't get mad when others try to show you something you may have overlooked. PS I fully understood what you did and wrote because I did the math and pointed out how this isnt going to work. All you did was insult me because I calculated the numbers to prove your idea is flawed.

 

[Bereno]

I plan on starting with the 30 year loan (assuming there is no fee for early completion, and a refi is possible), and then add whatever I can to the pmts. This allows for the best of both worlds; a small monthly pmt if I need it, along with the option to cut the duration down to whatever is reasonable (possibly down to 8 years or so??). It seems a lot more efficient and financially safe to do this since it allows much greater flexibility in how and when you pay. Essentially, this allows me to just get away with the minimum pmts for when I am first starting out, but then to hit the loans a lot harder after I have become at least somewhat established (maybe 2-4 years out). Also, the financial benefit of this (once again, assuming no early completion fee, and a refi is possible) is that you end up paying quite a bit less interest than you would otherwise. This is my current plan at least haha 👍

 

[iralex801]

I'm confused. WhiteFang is just saying that you stretch it to 30 years just in case for some reason, during a certain time period, your cash flow isn't as high as expected. If cash flow is what it's suppose to be, then you just pay more each month and essentially treat it as a 10 year plan. He's just saying you stretch to 30 years so you have more flexibility in case life throws something unexpected at you. Or am I missing something here?

 

[white fang]

You should know better than twist words around, I didn't know how student loans are handled in terms of interest because I received a ugrad scholarship and have no school debt 🙂 Unless you plan to put down 5k extra a month, which you wont, you'll gain nothing by stretching out your loan. I'm just trying to point out the fallacy of this plan so other pre-dental students wont have an inclining that this is financially worth it. After all is said and done this is gonna be a -10 here +10 there and you'll wind up paying out the same amount or more (as evidenced based on a real life example that I gave.)

That's all. Don't get mad when others try to show you something you may have overlooked. PS I fully understood what you did and wrote because I did the math and pointed out how this isnt going to work. All you did was insult me because I calculated the numbers to prove your idea is flawed.

You still don't understand!

Seriously. This isn't a scheme, this isn't a 'little plan', its not an idea specific to me. It is how many people treat their mortgage, undergrad debt, car payments etc. As someone that represents themselves as a non-trad with so much more experience and knowledge than everyone else, I would think you would have encountered the idea of having a lower monthly payment with longer terms and paying it off early.

I never said you will save money by extended the term of the loan and paying it off in more quickly in months that you can.

I am talking about the financial flexibility you will gain by extended the loan out longer and paying extra in months that you can.

And I plan to put down at least an extra 5k per month on my debt. While my spouse is still working probably closer to 8-9k. I am going to extend it out over a longer term in case unexpected expenses come our way (i.e. special needs child, family members in need, flood etc.). Especially when we will have several additional rental properties by then, expenses sneak up out of nowhere.

Until you actually have lived a little making a cute little budget sheet might seem easy and you might feel like an expert. Then, you realize unexpected expenses come up all the time and you don't have a guarantee on your income no matter how secure you think it is.

PS - are you still trying to represent yourself as a seasoned business man who can't figure out how interest payments work on a student loan?

 

[wired202808]

I plan on starting with the 30 year loan (assuming there is no fee for early completion, and a refi is possible), and then add whatever I can to the pmts. This allows for the best of both worlds; a small monthly pmt if I need it, along with the option to cut the duration down to whatever is reasonable (possibly down to 8 years or so??). It seems a lot more efficient and financially safe to do this since it allows much greater flexibility in how and when you pay. Essentially, this allows me to just get away with the minimum pmts for when I am first starting out, but then to hit the loans a lot harder after I have become at least somewhat established (maybe 2-4 years out). Also, the financial benefit of this (once again, assuming no early completion fee, and a refi is possible) is that you end up paying quite a bit less interest than you would otherwise. This is my current plan at least haha 👍

Bereno can you please show me how you calculated the #s to justify this. I'm just curious of what you used as the extra monthly payment amount. Using the #s I ran on the previous example, an additional 1K per month wasn't enough to justify this. Obviously 2k or 3k a month make it better. But I don't know how one can afford to spend so much even if you earn 7k a month (post taxes) you still have other expenses i.e family, opening up a practice, etc

 

[white fang]

I'm confused. WhiteFang is just saying that you stretch it to 30 years just in case for some reason, during a certain time period, your cash flow isn't as high as expected. If cash flow is what it's suppose to be, then you just pay more each month and essentially treat it as a 10 year plan. He's just saying you stretch to 30 years so you have more flexibility in case life throws something unexpected at you. Or am I missing something here?

You and Bereno aren't missing anything.

Wired is. He has some type of vendetta and wants to prove me wrong not matter if it is logical or not.

Either that or he really just can't read.

 

[white fang]

Bereno can you please show me how you calculated the #s to justify this. I'm just curious of what you used as the extra monthly payment amount. Using the #s I ran on the previous example, an additional 1K per month wasn't enough to justify this. Obviously 2k or 3k a month make it better. But I don't know how one can afford to spend so much even if you earn 7k a month (post taxes) you still have other expenses i.e family, opening up a practice, etc

Bereno says it and you take it serious. Why don't you illogically attack him?

You also make the false assumption all of ones income will come from their dental practice. That might be true for you, but it certainly won't be true for me or most other married dentists or those that have business ventures outside of the dental world.

 

[wired202808]

You still don't understand!

Seriously. This isn't a scheme, this isn't a 'little plan', its not an idea specific to me. It is how many people treat their mortgage, undergrad debt, car payments etc. As someone that represents themselves as a non-trad with so much more experience and knowledge than everyone else, I would think you would have encountered the idea of having a lower monthly payment with longer terms and paying it off early.

I never said you will save money by extended the term of the loan and paying it off in more quickly in months that you can.

I am talking about the financial flexibility you will gain by extended the loan out longer and paying extra in months that you can.

And I plan to put down at least an extra 5k per month on my debt. While my spouse is still working probably closer to 8-9k. I am going to extend it out over a longer term in case unexpected expenses come our way (i.e. special needs child, family members in need, flood etc.). Especially when we will have several additional rental properties by then, expenses sneak up out of nowhere.

Until you actually have lived a little making a cute little budget sheet might seem easy and you might feel like an expert. Then, you realize unexpected expenses come up all the time and you don't have a guarantee on your income no matter how secure you think it is.

PS - are you still trying to represent yourself as a seasoned business man who can't figure out how interest payments work on a student loan?

The reason why I called your plan a scheme was due to the fact that unlike you most people are not going to come out of dental school with a ton of extra cash lying around (like you.) I dont know of anyone that will be able to afford paying an ADDITIONAL 9K a month in loans. So in essence your selling your ability to pay more money as a the common solution for most dental students. Which makes no sense at all.

If you wanna be a hot shot and say that you're rich, then thats great! But stop telling people that they can afford adding another 5k to their monthly loans. That's just unreasonable.

 

[wired202808]

Bereno says it and you take it serious. Why don't you illogically attack him?

You also make the false assumption all of ones income will come from their dental practice. That might be true for you, but it certainly won't be true for me or most other married dentists or those that have business ventures outside of the dental world.

Most students on here aren't rich and have no other income streams. Dont hate on the fact that we are all trying to move up on this world, maybe you're rich and have a ton of extra cash lying around for monthly payments, unfortunately most dental students dont have that sort of option.

 

[white fang]

The reason why I called your plan a scheme was due to the fact that unlike you most people are not going to come out of dental school with a ton of extra cash lying around (like you.) I dont know of anyone that will be able to afford paying an ADDITIONAL 9K a month in loans. So in essence your selling your ability to pay more money as a the common solution for most dental students. Which makes no sense at all.

If you wanna be a hot shot and say that you're rich, then thats great! But stop telling people that they can afford adding another 5k to their monthly loans. That's just unreasonable.

While it will be easier for me to pay down loans than someone without a working spouse or someone who didn't work for several years before going to dental school, it does not make the method of payment any less valid.

It is not a scheme. You sound so ignorant when you say that. It is a method to pay down debt while keeping some flexibility on your monthly payments.

Additionally, if I was rich, I wouldn't worry about minimum monthly payments. I will have a nice cash flow each month, but that doesn't mean I am rich. If I were truly rich, would I be thinking about taking out 250k in loans?

 

[white fang]

Most students on here aren't rich and have no other income streams. Dont hate on the fact that we are all trying to move up on this world, maybe you're rich and have a ton of extra cash lying around for monthly payments, unfortunately most dental students dont have that sort of option.

Again, think through this. If I was rich, would I be taking out loans?

 

[wired202808]

Again, think through this. If I was rich, would I be taking out loans?

At the end of the day if you have 9K extra per month, you're significantly richer than most students on this board. Enjoy your money but please dont tell others that they can do the same things that you're going to do. That would be a blatant lie. Most students on this board (esp first generation dentists) will not benefit from a 30 yr plan. Unless they have a rich uncle/dad/cousin, etc.

Also most students on here are not married and even after dental school will probably marry someone who makes less than them and can only kick in $500 extra per month.

 

[white fang]

At the end of the day if you have 9K extra per month, you're significantly richer than most students on this board. Enjoy your money but please dont tell others that they can do the same things that you're going to do. That would be a blatant lie. Most students on this board (esp first generation dentists) will not benefit from a 30 yr plan. Unless they have a rich uncle/dad/cousin, etc.


Also most students on here are not married and even after dental school will probably marry someone who makes less than them and can only kick in $500 extra per month.

Having 9k extra per month is not the point. You said I wouldn't be able to put down 5k extra per month. I disagreed and told you how much I was going to pay extra. That has nothing to do with the fact a 30 year loan gives you flexibility and most dentists will be able to pay it down significantly faster than a 30 year loan.

And don't try to say I have a rich dad/uncle etc because I don't. I got very lucky at a previous job on commissions and had a good financial adviser and a brilliant wife who is good at her job.

Why would most people getting married mean they would only have $500 extra per month?

 

[nydentist32]

I plan on just living wit my parents till I'm 50 like a boss n I'll have all this debt paid off by time I'm at least 35 that leaves me wit a solid 15 yrs of salary which I'll save to buy a winnebago so i can retire n drive to cancun n live there for the rest of my life. #perfectplan.....#extremesarcasm i kno this is a serious issue but some of ur guys gotta lighten up lol

 

[wired202808]

Having 9k extra per month is not the point. You said I wouldn't be able to put down 5k extra per month. I disagreed and told you how much I was going to pay extra. That has nothing to do with the fact a 30 year loan gives you flexibility and most dentists will be able to pay it down significantly faster than a 30 year loan.

And don't try to say I have a rich dad/uncle etc because I don't. I got very lucky at a previous job on commissions and had a good financial adviser and a brilliant wife who is good at her job.

Why would most people getting married mean they would only have $500 extra per month?

So lets be smart about this and look at it from the perspective of an AVERAGE applicant. We cant use your lens since you're a non-trad with savings, a wife and other passive income streams. Most students take out at least 200K in loans for school, have little to no previous savings and will probably marry someone that's below their level of education (you dont often see two doctors or dentists marry, of course it happens, but that's not the norm.)

Most grads will come out making around 100K (unless you're in a super competitive market ie rural middle of nowhere) 100K a year = 5K a month (thats post tax) Loans on 200K (for an average applicant) will be around $2,300 or so a month for a 10 yr period, so that means if you're single you'll be spending half your paycheck on loans and the rest on living expenses. Assuming your income will rise, your expenses will rise as well. Even when you start earning 150k which will be like 8K per month you'll probably own a house, get married and have 1 or 2 kids to spend $$$ on. Additionally to get to a 200K level, in most states, requires owning your own practice which also costs a ton of $$$ per month.
(I did not include the numbers on a 30 yr loan payment because I did that before and you simply ignored it, as stated before, adding 1k extra per month does nothing to reduce the loan and most students wont be able to afford the 2k to 3k per month in additional payments to close the gap between a 30 yr and 10 yr.)

Again I dont see why you're closing your eyes to all these facts, most students wont have another 5K per month to throw away on loans. Its just not going to happen, plain and simple. I can't break it down to you and more, unless you think dentists earn 500K a year (which most don't) If you can do it, thats nice, but not really important to others since majority of students will be lucky to kick in another 1 to 2k per month to loans since they'll have a ton of other expenses w/o additional streams.

 

[Bereno]

Bereno can you please show me how you calculated the #s to justify this. I'm just curious of what you used as the extra monthly payment amount. Using the #s I ran on the previous example, an additional 1K per month wasn't enough to justify this. Obviously 2k or 3k a month make it better. But I don't know how one can afford to spend so much even if you earn 7k a month (post taxes) you still have other expenses i.e family, opening up a practice, etc

Yeah, I can do that for you buddy. However, since this topic is probably not covered in too much detail, I will elaborate a bit for other members of the forum. 👍

First, here are some of my assumptions:

• You can aggregate your loans and get a refi agreement. I'm too sure how this would work with federal student loans (I will try and look more into it), but this is my assupmtion. This would hopefully allow for a slightly lower interest rate such as 7.5% or even 7.0%
• Your salary increases a few years after you graduate.
• You are smart and frugal with your money. Even if you have some extra money, you are still not buying that new car, toys etc.
• You would be using a 10 year plan instead of this proposed plan.

OK, the numbers:
8% interest rate:
350K, 30 years:
Int: $2333
Prin: $235
Pmt: $2568

350K, 10 years:
Int: $2333
Prin: $1913
Pmt: $4246

350K, 5 years:
Int: $2333
Prin: $4763
Pmt: $7096

7.5% interest rate:
350K, 30 years:
Int: $2188
Prin: $260
Pmt: $2447

350K, 10 years:
Int: $2188
Prin: $1967
Pmt: $4155

350K, 5 years:
Int: $2188
Prin: $4826
Pmt: $7013

7.0% interest rate:
350K, 30 years:
Int: $2042
Prin: $287
Pmt: $2329

350K, 10 years:
Int: $2042
Prin: $2022
Pmt: $4064

350K, 5 years:
Int: $2042
Prin: $4889
Pmt: $6930


Based on these numbers, the 30 year loans obviously give the lowest required pmts. However, if you are on a 30 year plan, and pay it off in 10 years with the same interest rate, you have not saved any money over just a simple 10 year plan. This is because if you look at the interest pmts for both the 10 and 30 year plans at say, 8%, they are all at the same $2333. The same goes for the 7.5% and 7.0% plans. If you notice, the only thing changing within each interest rate set is the principle pmt. If you treat this 30 year plan as if it is a 10 year plan by using the 10 year principle, then you are able to pay it off in the desired 10. The benefit of this is that you have the option to lower pmt back down to the 30 year level should something make this higher pmt difficult (medical emergency, etc). This is a wise choice, since you get all the benefit of the 10 year plan, with a little cushion for emergencies.

However, the real benefit comes from the refi. If you are able to refi to a lower interest rate with the 30 year plan (and aggregate your loans), then you are able to lower that dreaded interest portion. Since the interest portion of a pmt is usually the fixed portion, it is usually something you can't cahnge. However, if you are able to get a lower interest rate, this previously fixed portion of your pmt can now be lowered! For example, if you are able to get 7.5% over 8.0%, this could potentially save you $10,920 over 10 years. If you were able to drop it from 8.0% to 7.0%, this could potentially save you $21,840 over that same 10 years (see calculations below).

Essentially, the 30 year plan in 10 years has 2 benefits IMO. It has the ability to let you pay less IF you need to, along with the ability to (possibly) get a lower interest rate in a refi. These added up make is seem like a solid thing for me to do.

A few additional notes:

• If you want to pay the lower pmts for the first few years on a 30 year plan, you will have to increase your pmts for the last few if you still want to keep you loan within the 10 year mark. I have included the pmt breakdown for a 5 year loan for this reason. This means that if you pay only the minimum for say, 3 years, and then increase your pmt in the last seven, you will have to increase your principle pmt to something greater than the 10 year principle, but less than the 5 year. If this is doable, great. If not, then you probably cant get away with the 10 year plan. Just an FYI.
• (PMT@8% - PMT@lower%) x 120months in 10 years = money saved from lower interest
• ($4246-$4155) x 120 = $10,920 @7.5%
• ($4246-$4064) x 120 = $21,840 @7.0%

Hope this helps out!! 👍

 

[wired202808]

Yeah, I can do that for you buddy. However, since this topic is probably not covered in too much detail, I will elaborate a bit for other members of the forum. 👍

First, here are some of my assumptions:

• You can aggregate your loans and get a refi agreement. I'm too sure how this would work with federal student loans (I will try and look more into it), but this is my assupmtion. This would hopefully allow for a slightly lower interest rate such as 7.5% or even 7.0%
• Your salary increases a few years after you graduate.
• You are smart and frugal with your money. Even if you have some extra money, you are still not buying that new car, toys etc.
• You would be using a 10 year plan instead of this proposed plan.

OK, the numbers:
8% interest rate:
350K, 30 years:
Int: $2333
Prin: $235
Pmt: $2568

350K, 10 years:
Int: $2333
Prin: $1913
Pmt: $4246

350K, 5 years:
Int: $2333
Prin: $4763
Pmt: $7096

7.5% interest rate:
350K, 30 years:
Int: $2188
Prin: $260
Pmt: $2447

350K, 10 years:
Int: $2188
Prin: $1967
Pmt: $4155

350K, 5 years:
Int: $2188
Prin: $4826
Pmt: $7013

7.0% interest rate:
350K, 30 years:
Int: $2042
Prin: $287
Pmt: $2329

350K, 10 years:
Int: $2042
Prin: $2022
Pmt: $4064

350K, 5 years:
Int: $2042
Prin: $4889
Pmt: $6930


Based on these numbers, the 30 year loans obviously give the lowest required pmts. However, if you are on a 30 year plan, and pay it off in 10 years with the same interest rate, you have not saved any money over just a simple 10 year plan. This is because if you look at the interest pmts for both the 10 and 30 year plans at say, 8%, they are all at the same $2333. The same goes for the 7.5% and 7.0% plans. If you notice, the only thing changing within each interest rate set is the principle pmt. If you treat this 30 year plan as if it is a 10 year plan by using the 10 year principle, then you are able to pay it off in the desired 10. The benefit of this is that you have the option to lower pmt back down to the 30 year level should something make this higher pmt difficult (medical emergency, etc). This is a wise choice, since you get all the benefit of the 10 year plan, with a little cushion for emergencies.

However, the real benefit comes from the refi. If you are able to refi to a lower interest rate with the 30 year plan (and aggregate your loans), then you are able to lower that dreaded interest portion. Since the interest portion of a pmt is usually the fixed portion, it is usually something you can't cahnge. However, if you are able to get a lower interest rate, this previously fixed portion of your pmt can now be lowered! For example, if you are able to get 7.5% over 8.0%, this could potentially save you $17,400 over 10 years. If you were able to drop it from 8.0% to 7.0%, this could potentially save you $34,920 over that same 10 years (see calculations below).

Essentially, the 30 year plan in 10 years has 2 benefits IMO. It has the ability to let you pay less IF you need to, along with the ability to (possibly) get a lower interest rate in a refi. These added up make is seem like a solid thing for me to do.

A few additional notes:

• If you want to pay the lower pmts for the first few years on a 30 year plan, you will have to increase your pmts for the last few if you still want to keep you loan within the 10 year mark. I have included the pmt breakdown for a 5 year loan for this reason. This means that if you pay only the minimum for say, 3 years, and then increase your pmt in the last seven, you will have to increase your principle pmt to something greater than the 10 year principle, but less than the 5 year. If this is doable, great. If not, then you probably cant get away with the 10 year plan. Just an FYI.
  
• (Int@8% - Int@lower%) x 120months in 10 years = money saved from lower interest
• ($2333-$2188) x 120 = $17400 @7.5%
• ($2333-$2042) x 120 = $34920 @7.0%

Hope this helps out!! 👍

Good job on the math! But here's where I'm curious. I know you can refinance your house etc with the HELOC and other vehicles. But with student loans is that simply the combining of all your loan types i.e. Stafford + Grad Plus and consolidating them via some program? Basically the whole 30 vs 10 yrs hinges on the interest rate. And I'd like to find out if this refi or consolidation exists for 10 yr loans as well because it would probably make those quite low as well.

 

[white fang]

Good job on the math! But here's where I'm curious. I know you can refinance your house etc with the HELOC and other vehicles. But with student loans is that simply the combining of all your loan types i.e. Stafford + Grad Plus and consolidating them via some program? Basically the whole 30 vs 10 yrs hinges on the interest rate. And I'd like to find out if this refi or consolidation exists for 10 yr loans as well because it would probably make those quite low as well.

Right now there are programs to consolidate federal loans for a 0.25% drop in interest and another 0.25% interest for setting up automatic payments for a 0.5% discount.

You are still missing the boat on the point of the 30 year. You keep saying that students won't be able to afford more than 1k extra on a 30 year loan, then how in the hell can they afford a 10 year loan? Look at bereno's #'s for yourself, there is a big gap in the payment between a 30 year and a 10 year. That added payment to the 10 year can be a burden in given months.

I will be awaiting your apology.

 

[Bereno]

Good job on the math! But here's where I'm curious. I know you can refinance your house etc with the HELOC and other vehicles. But with student loans is that simply the combining of all your loan types i.e. Stafford + Grad Plus and consolidating them via some program? Basically the whole 30 vs 10 yrs hinges on the interest rate. And I'd like to find out if this refi or consolidation exists for 10 yr loans as well because it would probably make those quite low as well.

Like I said, I'm not terribly familiar with how it would work with the federal loans... If we are able to mimic some of the HELOC terms, that would be nice, but this is not an asset backed loan so I doubt it 🙁 I have heard speak of various consolidation plans, but I have never personally talked to a financial institution about it, so I'm not well versed in it. As far as the financial benefit of 30 vs 10, yeah it all depends on the int rate. Otherwise, its just good safety planning haha 😀

 

[wired202808]

Right now there are programs to consolidate federal loans for a 0.25% drop in interest and another 0.25% interest for setting up automatic payments for a 0.5% discount.

You are still missing the boat on the point of the 30 year. You keep saying that students won't be able to afford more than 1k extra on a 30 year loan, then how in the hell can they afford a 10 year loan? Look at bereno's #'s for yourself, there is a big gap in the payment between a 30 year and a 10 year. That added payment to the 10 year can be a burden in given months.

I will be awaiting your apology.

Most students will not be able to kick in enough to make it worth while. I'm not gonna repeat the same thing for someone that pays no attention.

Go apologize to yourself.

 

[wired202808]

Like I said, I'm not terribly familiar with how it would work with the federal loans... If we are able to mimic some of the HELOC terms, that would be nice, but this is not an asset backed loan so I doubt it 🙁 I have heard speak of various consolidation plans, but I have never personally talked to a financial institution about it, so I'm not well versed in it. As far as the financial benefit of 30 vs 10, yeah it all depends on the int rate. Otherwise, its just good safety planning haha 😀

Got ya. Well ye that's no doubt about the 30 yr plan being safer. I guess this all depends on how much you plan to take out. At 400K, I would probably do the 30 yr option. My loan will be equivalent to the average so I plan to do the 10 yr option and ride it out, so I can free up future cash flow.

 

[iralex801]

I am still really confused on what you are saying Wired. It seems you aren't the one paying attention as usual! lol. There's no financial gain from doing a 30 year plan (with the intention of doing it as a 10 yr plan) and a 10 year plan. The only advantage the 30 year plan gives you is flexibility! You are saying that students can't afford to pay extra each month on a 30 year plan. Then how the hell would they be able to use a 10 year plan and pay that monthly rate. I am going crazy. You're completely missing the point! It's not some crazy scheme or magical solution. It's just the 30 year plan (with the intention to pay it off in 10 years) buffers you just incase your income is not as expected lol. Omg I can't believe u are missing the point lol.

This is assuming interest rates on 30 year plans and 10 year plans are the same though! I'm not sure about this at all.

Oh well, if interest rates are lower, then there is a financial benefit from doing 30 years (with intention of doing it as 10). Well, my main point is Wired fails to grasp the main point of whitefang's argument that the 30 year plan (with intention of doing it as a 10 year) gives you flexibility. Wired refuses to address this point and goes on talking about how students don't have enough income to make it beneficial. This is a completely different topic! He might as well be arguing with himself lol.

 

[little Buddy]

30 interest rate are almost always lower than 15 and 10 year rates ^^^^^.

 

[benzatone]

A few additional notes:

• If you want to pay the lower pmts for the first few years on a 30 year plan, you will have to increase your pmts for the last few if you still want to keep you loan within the 10 year mark. I have included the pmt breakdown for a 5 year loan for this reason. This means that if you pay only the minimum for say, 3 years, and then increase your pmt in the last seven, you will have to increase your principle pmt to something greater than the 10 year principle, but less than the 5 year. If this is doable, great. If not, then you probably cant get away with the 10 year plan. Just an FYI.
  
• (Int@8% - Int@lower%) x 120months in 10 years = money saved from lower interest
• ($2333-$2188) x 120 = $17400 @7.5%
• ($2333-$2042) x 120 = $34920 @7.0%

Hope this helps out!! 👍

The interest you pay will go down with each subsequent payment because it's calculated from the new lower outstanding principle each month.

Since it's the same $350k principle you're paying off, the only difference would come in the total amount paid:

• (PMT@8% * 120) - (PMT@lower% * 120) = money saved from lower interest
• ($4246 * 120) - ($4155 * 120) = ~$11,000 @7.5%
• ($4246 * 120) - ($4064 * 120) = ~$22,000 @7.0%

Still saving money obviously 🙂, just not quite as much over the life of it.

 

[Bereno]

30 interest rate are almost always lower than 15 and 10 year rates.

Hence the financial benefit of the 30 year refi lol 😀

 

[Bereno]

The interest you pay will go down with each subsequent payment because it's calculated from the new lower outstanding principle each month.

Since it's the same $350k principle you're paying off, the only difference would come in the total amount paid:

• (PMT@8% * 120) - (PMT@lower% * 120) = money saved from lower interest
• ($4246 * 120) - ($4155 * 120) = ~$11,000 @7.5%
• ($4246 * 120) - ($4064 * 120) = ~$22,000 @7.0%

Still saving money obviously 🙂, just not quite as much over the life of it.

True. In my haste to finish the post, I overlooked some other things like this lol. I meant to put total pmt in there, and I don't really know why I put the interest... Thanks for the correction, my original post is updated! 👍

 

[joshwake]

Posts like this make me sick. Some people have been in such a bubble their whole lives they have no idea what the reality is for most of the people in this world. What is the average income in the US right now.... is it still under 30k/year? Try making that annually, debt or no debt.

I lived in Brazil for two years serving as a missionary. Most the people I worked with lived in government housing or they built their own homes with bricks they would dry in the sun, yet they still insisted I ate as much of their food as I could fit in my belly. And somehow, so many of them seemed very happy.

You are being ignorant and selfish. I suggest you get some perspective on life before you apply to dental school because so many of the people that will need your help will be much worse off than you.

 

[FanOfCostco]

Posts like this make me sick. Some people have been in such a bubble their whole lives they have no idea what the reality is for most of the people in this world. What is the average income in the US right now.... is it still under 30k/year? Try making that annually, debt or no debt.

I lived in Brazil for two years serving as a missionary. Most the people I worked with lived in government housing or they built their own homes with bricks they would dry in the sun, yet they still insisted I ate as much of their food as I could fit in my belly. And somehow, so many of them seemed very happy.

You are being ignorant and selfish. I suggest you get some perspective on life before you apply to dental school because so many of the people that will need your help will be much worse off than you.

👍👍

 

[white fang]

I am still really confused on what you are saying Wired. It seems you aren't the one paying attention as usual! lol. There's no financial gain from doing a 30 year plan (with the intention of doing it as a 10 yr plan) and a 10 year plan. The only advantage the 30 year plan gives you is flexibility! You are saying that students can't afford to pay extra each month on a 30 year plan. Then how the hell would they be able to use a 10 year plan and pay that monthly rate. I am going crazy. You're completely missing the point! It's not some crazy scheme or magical solution. It's just the 30 year plan (with the intention to pay it off in 10 years) buffers you just incase your income is not as expected lol. Omg I can't believe u are missing the point lol.

This is assuming interest rates on 30 year plans and 10 year plans are the same though! I'm not sure about this at all.

Oh well, if interest rates are lower, then there is a financial benefit from doing 30 years (with intention of doing it as 10). Well, my main point is Wired fails to grasp the main point of whitefang's argument that the 30 year plan (with intention of doing it as a 10 year) gives you flexibility. Wired refuses to address this point and goes on talking about how students don't have enough income to make it beneficial. This is a completely different topic! He might as well be arguing with himself lol.

Thank you for being able to understand and be more concise than me. Your post sums up my entire position.

On a different note; Wired, I have determined to do us a both a favor and not apply to whatever DS actually let you in the door. Could you please PM said school and I will make sure that I don't ever have to meet you in person?

 

[jackalo34]

Posts like this make me sick. Some people have been in such a bubble their whole lives they have no idea what the reality is for most of the people in this world. What is the average income in the US right now.... is it still under 30k/year? Try making that annually, debt or no debt.

I lived in Brazil for two years serving as a missionary. Most the people I worked with lived in government housing or they built their own homes with bricks they would dry in the sun, yet they still insisted I ate as much of their food as I could fit in my belly. And somehow, so many of them seemed very happy.

You are being ignorant and selfish. I suggest you get some perspective on life before you apply to dental school because so many of the people that will need your help will be much worse off than you.

Although I agree and I’m sure many of us know what the average income is, I fail to see the point of your post. This is a thread about finance in d school not global poverty. Sorry if I seem harsh, but I feel your post is judgemental and unnecessary.

 

[wired202808]

Thank you for being able to understand and be more concise than me. Your post sums up my entire position.

On a different note; Wired, I have determined to do us a both a favor and not apply to whatever DS actually let you in the door. Could you please PM said school and I will make sure that I don't ever have to meet you in person?

You wish buddy.

 

[wired202808]

I am still really confused on what you are saying Wired. It seems you aren't the one paying attention as usual! lol. There's no financial gain from doing a 30 year plan (with the intention of doing it as a 10 yr plan) and a 10 year plan. The only advantage the 30 year plan gives you is flexibility! You are saying that students can't afford to pay extra each month on a 30 year plan. Then how the hell would they be able to use a 10 year plan and pay that monthly rate. I am going crazy. You're completely missing the point! It's not some crazy scheme or magical solution. It's just the 30 year plan (with the intention to pay it off in 10 years) buffers you just incase your income is not as expected lol. Omg I can't believe u are missing the point lol.

This is assuming interest rates on 30 year plans and 10 year plans are the same though! I'm not sure about this at all.

Oh well, if interest rates are lower, then there is a financial benefit from doing 30 years (with intention of doing it as 10). Well, my main point is Wired fails to grasp the main point of whitefang's argument that the 30 year plan (with intention of doing it as a 10 year) gives you flexibility. Wired refuses to address this point and goes on talking about how students don't have enough income to make it beneficial. This is a completely different topic! He might as well be arguing with himself lol.

I'm not really gonna argue against you or him, I dont care how much you guys want to take out or how long you'll be in debt; that's your problem. What I was saying is the more RELEVANT information is that students should attempt to finish the loan during the regular 10 yr cycle vs. trying to "buffer" it by using the 30 yr plan. They'll probably overspend or break even. And unless you plan to live in a 10K a month house and drive a Ferrari you should be able to pay off the balance within 10 yrs time. That's it! The End!

 

[ToldYouSo]

I'm not really gonna argue against you or him, I dont care how much you guys want to take out or how long you'll be in debt; that's your problem. What I was saying is the more RELEVANT information is that students should attempt to finish the loan during the regular 10 yr cycle vs. trying to "buffer" it by using the 30 yr plan. They'll probably overspend or break even. And unless you plan to live in a 10K a month house and drive a Ferrari you should be able to pay off the balance within 10 yrs time. That's it! The End!

lolwut

 

[sacapuntas]

.

 

[wired202808]

I have been sitting on the sidelines for too long. This thread is just another example of why Wired, who is Mr. Avicci, who is RP37 who is DDS25 who is probably countless other posters, needs a permanent ban.

wired is always looking for an argument, is incoherent, and adds very little of substance to any discussion.

Somebody...please ban wired and the IPs he logs on from (along with mr. avicci, RP37, DDS25) and let this forum be peaceful once again!

very mature. We're having a discussion about debt. Thanks for contributing!

 

[FanOfCostco]

I have been sitting on the sidelines for too long. This thread is just another example of why Wired, who is Mr. Avicci, who is RP37 who is DDS25 who is probably countless other posters, needs a permanent ban.

wired is always looking for an argument, is incoherent, and adds very little of substance to any discussion.

Somebody...please ban wired and the IPs he logs on from (along with mr. avicci, RP37, DDS25) and let this forum be peaceful once again!

👍👍

 

[Bereno]

Come on guys, lets stop the bashing here. If you don't have something productive to say, don't say it. This thread has some good info in it (and some bad), so lets try and keep it from getting locked. 👍

 

[Kahr]

Now that everyone's essentially argued their points to exhaustion and provided plenty of personal research, and since obviously neither side is going to be convinced of the other's argument, can we please move on (or take it to PM)? It would surely be better than having this degrade any further.

I only comment because of the calling out for a ban, which clearly indicates this is creeping toward further agitation among parties (including any yet to speak), and eventual mod intervention, which I'm sure no one really wants!

I plan on just living wit my parents till I'm 50 like a boss n I'll have all this debt paid off by time I'm at least 35 that leaves me wit a solid 15 yrs of salary which I'll save to buy a winnebago so i can retire n drive to cancun n live there for the rest of my life. #perfectplan.....#extremesarcasm i kno this is a serious issue but some of ur guys gotta lighten up lol

Actually, this doesn't sound too bad. 😀

 

[2PacClone23]

This ruined my hopes of buying myself a Rolls Royce after D-School.

 

[wired202808]

This ruined my hopes of buying myself a Rolls Royce after D-School.

hey hygiene is always a good business. My friend is making $50 / hr and only went to a 2 yr school.

 

[2PacClone23]

hey hygiene is always a good business. My friend is making $50 / hr and only went to a 2 yr school.

Who said I want hygiene? I want dentistry *****!

 

[SexyMariGal]

Got ya. Well ye that's no doubt about the 30 yr plan being safer. I guess this all depends on how much you plan to take out. At 400K, I would probably do the 30 yr option. My loan will be equivalent to the average so I plan to do the 10 yr option and ride it out, so I can free up future cash flow.

At 400k, how about the 4 yr option - HPSP? Just throwing it out there. You lose out on 4 years, but you come out debt free (depending on your if living expenses exceed your monthly stipends), have 4 years of savings in the bank from military pay, and can use that money towards a startup.

On the other hand, if you are a great businessman, you could probably start up a practice and grow it to a point in 4 years where you would have enough to pay all of your student loans back in full. Not sure if that is a gamble worth taking though, the other route seems pretty solid.

 

[tRad]

We are in such a predicament because of these student loans. They say it's the next bubble and I hope that's right. All of you have to agree they have us in a pretty good choke hold just because we want to follow our dreams!

 

[2PacClone23]

The first few years, we won't be livin' as baller as we'd like.

 

[thewingman]

The first few years, we won't be livin' as baller as we'd like.

Seems like you should focus on brining up your grades, then worry about how you will be living.

 

[iralex801]

I'm not really gonna argue against you or him, I dont care how much you guys want to take out or how long you'll be in debt; that's your problem. What I was saying is the more RELEVANT information is that students should attempt to finish the loan during the regular 10 yr cycle vs. trying to "buffer" it by using the 30 yr plan. They'll probably overspend or break even. And unless you plan to live in a 10K a month house and drive a Ferrari you should be able to pay off the balance within 10 yrs time. That's it! The End!

Nvm. Decided not to try to make you understand b/c you probably won't listen anyways.

I don't even think Wired is a troll. He is just strongly opinionated, but not incredibly bright or adept at conveying his thoughts. Sigh...I guess age doesn't equal intelligence 🙂.

 

[2PacClone23]

Seems like you should focus on brining up your grades, then worry about how you will be living.

Will you be quiet? My grades are fine. Chill the hell out. I'm just making an observation.

 

[Cello]

What is so hard to understand about taking a 30 year loan for a lower interest rate, but instead paying it off in just 10 years? Why would you choose the higher interest rate and force yourself to pay off the loan in 10 years, rather than electing to do so of your own volition? It's not hard to understand that what many people are saying here is that a 30 year loan allows for a much lower minimum payment. So, *IF* you ever had an emergency and could only meet the minimum payment for a month or two, there is far more flexibility with a 30 year loan. There is nothing "magic" about it, and if there's no penalty for paying off the loan early, then you'd be insane NOT to do it this way if you have even a bit of financial discipline.

 

[destinedsirius]

Yes I'm not "smart" enough to create these magical "buffers" and sit in debt for 30 years. If you're so smart, then go ahead and do so. I really dont care about how much extra you spend paying off loans, thats's your problem. I'm gonna be ballllllllinnn after 10 yrs, debt free 😀

This will be my one attempt to explain and help you. What everyone else is trying to say is that they will be using the 30 year payment plan.... Which means lower monthly payments... But they are not going to pay just the minimum.... They will be paying like they were on the 10 year plan... Just like you they can be done in 10 years...

So now, I believe that you think 30 year costs much more than 10 years because the 30 year plan will have 30 years of interest rates piled up. Yes, that is true. If you use the whole 30 years to pay off, you will have 30 years of interest. What everyone on here is trying to help you to understand is that.... We are going to pay it off in 10 years instead of 30 years. This means the interest rate will be piling up only for 10 years.

So wired asks: what's the point??? Isnt that doing the same thing as the 10 year plan?

I Answer: no wired, if you go with the 30 year plan, the interest rate is much lower than the 10 year. So instead of having the 10 year repayment pile up for 10 years, you'll only have the 30 year repayment interest rate (which is lower) pile up for 10 years. Which means overall you pay less if you go with the 30 year repayment and pay it off in 10.

If you don't get this, I don't know what else anyone on here can do to help you. Good luck with your future in dentistry.

 

[MatthewCC]

That was a good read. I needed to laugh today, the DAT is stressing me out to much.