Post by @moneymeetsmedicine

2 Doctors Are Trying To Pay Off Debt 📉 Same loan balance. Same interest rate. Completely different game plans. John has $200,000 at 7% and is in IBR (Income Based Repayment). His payments don't cover the monthly interest, so his balance grows during residency — he'll owe around $280,500 by the end of PGY-5. But that's by design. John is pursuing PSLF after training, so a higher balance doesn't hurt him. After 120 qualifying payments at a qualifying employer, the remaining balance gets forgiven tax-free. Kyle also has $200,000 at 7%, but he's in RAP (Repayment Assistance Plan) because he doesn’t plan on pursuing PSLF after training. Under RAP, when your monthly payment is less than the interest accruing, the unpaid interest is waived (forgiven basically), and the government also kicks in a flat $50/month toward principal. So while John's balance grows, Kyle's slowly shrinks — he'll be at around $197,000 after PGY-5. That sets him up to attack the debt aggressively as an attending and be debt-free fast. Both strategies work — but only because each one matches the doctor's plan after training. That's why copying somebody else's financial plan without understanding your own numbers is dangerous. Have private loans you are looking to refinance to the lowest possible interest rate (but on a monthly payment you can afford in training)? Visit moneymeetsmedicine.com/refi Follow for more personal finance tips for physicians! #physicianfinance #studentdebt #debtfreedom #financialplanning #physicianmoney