## Calculating debt repayments after LS

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
arvcondor

Posts: 371
Joined: Sun Oct 03, 2010 11:33 pm

### Calculating debt repayments after LS

How do I do it? For example, if I take on \$100,000 in debt, what should I expect to pay back monthly? I haven't actually begun the process of applying for loans (still have yet to file taxes), so I'd like to know how to anticipate this.

RPK34

Posts: 521
Joined: Tue Mar 02, 2010 6:31 pm

### Re: Calculating debt repayments after LS

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

This is an awesome resource. So, if you were to take out 100k in debt, at 7.0% interest, you'd pay about \$1100 a month if you wanted to pay it off in ten years. Also, you'd have paid 40k in interest over those four years.

If you wanted to pay it off in 5 years, which you'd probably need a big law job for 3-4 years to do, you could pay \$1980 a month for five years. You'd also only pay about 18k in interest if you could do this.

delusional

Posts: 1200
Joined: Thu Jul 15, 2010 7:57 pm

### Re: Calculating debt repayments after LS

Based on the above calculations, why would anybody take out \$200,000 in loans? Pick your poison - over ten years, you'd need a salary of like 300,000 to make a 10% payment possible. Over thirty years, you'd be paying about \$500,000 for your JD.

Related - does IBR mean the death of the thirty year plan?

A12345

Posts: 231
Joined: Fri Dec 24, 2010 3:53 am

### Re: Calculating debt repayments after LS

delusional wrote:Based on the above calculations, why would anybody take out \$200,000 in loans? Pick your poison - over ten years, you'd need a salary of like 300,000 to make a 10% payment possible. Over thirty years, you'd be paying about \$500,000 for your JD.

Related - does IBR mean the death of the thirty year plan?

because they are idiots unless they are going to one of the top 15-20 schools imo

delusional

Posts: 1200
Joined: Thu Jul 15, 2010 7:57 pm

### Re: Calculating debt repayments after LS

A12345 wrote:
delusional wrote:Based on the above calculations, why would anybody take out \$200,000 in loans? Pick your poison - over ten years, you'd need a salary of like 300,000 to make a 10% payment possible. Over thirty years, you'd be paying about \$500,000 for your JD.

Related - does IBR mean the death of the thirty year plan?

because they are idiots unless they are going to one of the top 15-20 schools imo

That is axiomatic for anyone on TLS. My question is, what about the people who ARE going to the top schools, and WILL get the biglaw jobs? It's still difficult to pay back 28,000 a year on an income of \$160,000, especially in the big cities where market is \$160,000.

A12345

Posts: 231
Joined: Fri Dec 24, 2010 3:53 am

### Re: Calculating debt repayments after LS

delusional wrote:
A12345 wrote:
delusional wrote:Based on the above calculations, why would anybody take out \$200,000 in loans? Pick your poison - over ten years, you'd need a salary of like 300,000 to make a 10% payment possible. Over thirty years, you'd be paying about \$500,000 for your JD.

Related - does IBR mean the death of the thirty year plan?

because they are idiots unless they are going to one of the top 15-20 schools imo

That is axiomatic for anyone on TLS. My question is, what about the people who ARE going to the top schools, and WILL get the biglaw jobs? It's still difficult to pay back 28,000 a year on an income of \$160,000, especially in the big cities where market is \$160,000.

no it's not. you just don't live like you are making 160,000 till you get that debt paid off. you should basically act like you are on a salary of about 80k and just pay as much as you can on the loans.

swc65

Posts: 1003
Joined: Wed Jul 22, 2009 11:27 am

### Re: Calculating debt repayments after LS

delusional wrote:
A12345 wrote:
delusional wrote:Based on the above calculations, why would anybody take out \$200,000 in loans? Pick your poison - over ten years, you'd need a salary of like 300,000 to make a 10% payment possible. Over thirty years, you'd be paying about \$500,000 for your JD.

Related - does IBR mean the death of the thirty year plan?

because they are idiots unless they are going to one of the top 15-20 schools imo

That is axiomatic for anyone on TLS. My question is, what about the people who ARE going to the top schools, and WILL get the biglaw jobs? It's still difficult to pay back 28,000 a year on an income of \$160,000, especially in the big cities where market is \$160,000.

There are so many options for federal loans that some of the fear about going into debt is overblow. There's IBR, ICR, Extended, graduated, extended-graduated, etc. You could even defer for a few years until you are making enough to afford the payment. Plus, it's an unsecured loan at an interest rate that won't be too bad when things are back to normal and regular interest rates and wage inflation are higher.

I would never recommend paying off school loans in a just a few years, unless you're only taking the BigBucks job to pay off the loans. To me, it is much better to have assets (cash, etc.) and unsecured debt than no cash and no debt. I mean, if you lose your job and cant pay the loan payments, there are a million options to defer or reduce the payments. However, if you spend all of your money paying off the debt and then lose your job and have no assets because you paid off the debt, you'll starve!

jacquibala

Posts: 4
Joined: Wed Apr 06, 2011 4:37 pm

### Re: Calculating debt repayments after LS

http://www.glAdvisor.com/lawpresentation - I got this from a friend the other day, and this is a pretty good resource too. It goes through IBR and PSLF and shows you how much you can save on your debt by using these programs.

RPK34 wrote:http://www.finaid.org/calculators/loanpayments.phtml

This is an awesome resource. So, if you were to take out 100k in debt, at 7.0% interest, you'd pay about \$1100 a month if you wanted to pay it off in ten years. Also, you'd have paid 40k in interest over those four years.

If you wanted to pay it off in 5 years, which you'd probably need a big law job for 3-4 years to do, you could pay \$1980 a month for five years. You'd also only pay about 18k in interest if you could do this.

Rooney

Posts: 1179
Joined: Thu Feb 03, 2011 3:43 pm

### Re: Calculating debt repayments after LS

swc65 wrote:
delusional wrote:
A12345 wrote:
delusional wrote:Based on the above calculations, why would anybody take out \$200,000 in loans? Pick your poison - over ten years, you'd need a salary of like 300,000 to make a 10% payment possible. Over thirty years, you'd be paying about \$500,000 for your JD.

Related - does IBR mean the death of the thirty year plan?

because they are idiots unless they are going to one of the top 15-20 schools imo

That is axiomatic for anyone on TLS. My question is, what about the people who ARE going to the top schools, and WILL get the biglaw jobs? It's still difficult to pay back 28,000 a year on an income of \$160,000, especially in the big cities where market is \$160,000.

There are so many options for federal loans that some of the fear about going into debt is overblow. There's IBR, ICR, Extended, graduated, extended-graduated, etc. You could even defer for a few years until you are making enough to afford the payment. Plus, it's an unsecured loan at an interest rate that won't be too bad when things are back to normal and regular interest rates and wage inflation are higher.

I would never recommend paying off school loans in a just a few years, unless you're only taking the BigBucks job to pay off the loans. To me, it is much better to have assets (cash, etc.) and unsecured debt than no cash and no debt. I mean, if you lose your job and cant pay the loan payments, there are a million options to defer or reduce the payments. However, if you spend all of your money paying off the debt and then lose your job and have no assets because you paid off the debt, you'll starve!

very interesting point!