How fast can loans be paid off? Forum

[beesknees]

Assuming a T14, I think a better (more conservative) choice would be a salary of $120k but we'll run with 135. After SS, state tax, federal tax, and local income taxes, I think you'll net about 65% (23% federal, 4% state/local, 7.65% SS), or ~$88k. Assuming low expenses (~$23k), this leaves you about $65k.

210k debt @8% (150k @ 8.5%/60k @ 6.8%)

3 year repayment: $79,000/yr
4 year repayment: 61,500/yr
5 year repayment: 51,000/yr

Looks like 4 years is doable on a strict budget (see: no tropical vacations). 3 years would be virtually impossible w such a salary. Even if you lived like a student and found a market-paying gig (160k), 3 years would be extremely difficult.

This is what I approximated too, so it seems like 4 years is doable, depending on your self-discipline with finances. 5 years is probably more feasible, as someone pointed out it would be prudent to amass some financial cushion with 3-6 months salary in savings.

Also, just to clarify what I said earlier, I wasn't suggesting locking oneself into a strict 5 year repayment schedule, even though I don't think you can even do that with Stafford and GradPlus. I meant that assuming you want to pay it off in 5 years, this is roughly what it'd take.

[KG_CalGuy]

I forgot my ultimate plan: marry rich.

/problem

[beesknees]

I forgot my ultimate plan: marry rich.

/problem

This is probably the best advice lol. Though I hear the competition for that kind of gig is just as fierce as landing biglaw - many of your classmates could be eyeing the same prospect.

[nealric]

Assuming a T14, I think a better (more conservative) choice would be a salary of $120k but we'll run with 135.

This makes no sense. Almost nobody makes 135k (or 120k for that matter). They are either going to make 160k (biglaw) or 70k (fed government/small law). There are a few firms paying 120-135k, but most are in small secondary markets and represent a tiny fraction of the total graduate hiring.

Oh...
And car payments are asinine. Cash for cars.

[vanwinkle]

Assuming a T14, I think a better (more conservative) choice would be a salary of $120k but we'll run with 135.

I go to a T14, and calling $120k a "conservative" estimate tells me you don't know what the word "conservative" means.

[sanpiero]

Assuming a T14, I think a better (more conservative) choice would be a salary of $120k but we'll run with 135.

This makes no sense. Almost nobody makes 135k (or 120k for that matter). They are either going to make 160k (biglaw) or 70k (fed government/small law). There are a few firms paying 120-135k, but most are in small secondary markets and represent a tiny fraction of the total graduate hiring.

Oh...
And car payments are asinine. Cash for cars.

I was just trying to capture the uncertainty associated with landing a market-paying job (e.g. only ~50% at a given T14 go NLJ250). Why would you assume you have 100% probability of making 160k?

For instance,
50%*160k = 80k
20%*120k = 24k
30%*70k = 21k
(21k+24k+80k)=$125k

Didn't think I would have to explain my logic but there ya go.

[sanpiero]

Assuming a T14, I think a better (more conservative) choice would be a salary of $120k but we'll run with 135.

I go to a T14, and calling $120k a "conservative" estimate tells me you don't know what the word "conservative" means.

To me, "conservative" in this context describes an estimated salary that doesn't rely on an assumption that there is a 100% probability of making 160k.