Need some help with student loan payment plan

[conniebird]

Hi, I'm a new attending and need help figuring out my student loan payback plan....

2016:

I am maxing out 403b - $18,000 (+generous company match)

Back door Roth $11,000 (2015+2016 this year)

Emergency Fund $15,000 (doing this slowly, goal is 30K by end of 2017)

Paying off student loan $8,800 @ 5%

I have no other debt besides student loans

 

In 2017, I will be contributing to a 457b in addition to the above, will likely max it out, $18,000.

 

Loan amounts:

$8,800 @ 5%

$28,600 @ 4%

$46,076 @ 3.13%

$17,000 @ 2.75%

$18,865 @ 2.07%

$80,000 @ 2.9%

Total =  ~ $200K

Min. monthly student loan payment $1200

 

Will be paying off the 5% loan this year. Then the plan was to attack the 4% loan next. As you can see, the rest of the loans are pretty low interest. Besides having $0 in loans, is there really a reason to pay these off super fast? Right now I'm thinking I can pay them off within 7 years. I have to buy a car the end of this year so that will need some cash then.

I should also bonus a decent amount and was going to throw most of that towards loans as well. I live in a very expensive city so my take home pay isn't as much as it could be after rent. Yes I know I could pay less in rent but I couldn't stomach having a roommate at this point in my life.

 

[Zaphod]

conniebird wrote:

Hi, I’m a new attending and need help figuring out my student loan payback plan….

2016:

I am maxing out 403b – $18,000 (+generous company match)

Back door Roth $11,000 (2015+2016 this year)

Emergency Fund $15,000 (doing this slowly, goal is 30K by end of 2017)

Paying off student loan $8,800 @ 5%

I have no other debt besides student loans

 

In 2017, I will be contributing to a 457b in addition to the above, will likely max it out, $18,000.

 

Loan amounts:

$8,800 @ 5%

$28,600 @ 4%

$46,076 @ 3.13%

$17,000 @ 2.75%

$18,865 @ 2.07%

$80,000 @ 2.9%

Total =  ~ $200K

Min. monthly student loan payment $1200

 

Will be paying off the 5% loan this year. Then the plan was to attack the 4% loan next. As you can see, the rest of the loans are pretty low interest. Besides having $0 in loans, is there really a reason to pay these off super fast? I was going to pay an additional $1500-2000 per month towards student loans, ~ $20,000 a year. I should also bonus a decent amount and was going to throw most of that towards loans as well. I live in a very expensive city so my take home pay isn’t as much as it could be after rent. Yes I know I could pay less in rent but I couldn’t stomach having a roommate at this point in my life.

 

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The higher interest loans arent a large principal, but I'd consider refinancing them soon. The fed is likely to raise rates this summer, and while it wont dramatically change anything rate wise, there is still quite a disconnect in the rates the market currently has and what the fed has going on. You should be able to get down towards 3%, unless rates have changed dramatically from 2 weeks ago.

What you do after that has to do with your personal plan and goals. Many people would crush their loans, and thats fine. At those rates I would not, but ymmv.

[conniebird]

Thanks Zaphod, the 4% and 5% are fixed (private loan via my med school and perkins).

Paying off the Perkins at 5% this year, then will knock out the 4% loan over 2-3 years likely.

 

I feel the same way about the rest, but feel like I should at least set an end date or else they might stay around forever.

 

 

[Zaphod]

conniebird wrote:

Thanks Zaphod, the 4% and 5% are fixed (private loan via my med school and perkins).

Paying off the Perkins at 5% this year, then will knock out the 4% loan over 2-3 years likely.

 

I feel the same way about the rest, but feel like I should at least set an end date or else they might stay around forever.

 

 

Click to expand...

I refinanced plenty of fixed 4-5% loans to variable 10y terms at 2.94 last week, and thats not their best rate either. Choose your end date by the whatever the term on the loan is, unless its ridiculous like 25y or something and you dont want that hanging around until retirement.