I'm hoping you let me offer another answer to this question. Everything
that DrDave said is absolutely right (with the only exception being
that an extended term for paying off school is 30 years, not 20 but that
is insignificant because lenders will pretty much let you set up any
term you want). And his advice is sound. What I'd like to help with
though are some ideas that will help you to realize how important it is
to dramatically decrease the first part of DrDave's equation (how much
loans you take out). Let's assume for a minute that you take out around 300K in loans between medical school and undergraduate school. This is pretty common for private medical schools. Please remember your interest will be accruing during residency so at 7% (low side) interest rate after 4 years of a psychiatry residency you will be 400K in debt. Then comes repayment. Your monthly payment on a 10 year plan is $4645, and on a 30 year plan is $2661.
Now let's assume
you can half that debt (this is extremely doable) to 150K on
graduation. That is 200K at end of residency and 10 year payment is
$2,322 (Int rate 7%) and 30 year is $1,330.
If you want to be wealthy in your life (most doctors do not retire millionaires even though the median income of millionaires is 130K a year and doctors median income is 190K a year), so if you want to be out of the norm for doctors and retire wealthy, a 30 year plan is just plain out. That big a payment for that long will kill you. So 10 years is what you should shoot for. On a psychiatry pay (160K a year on average), a 10 year plan with 300K after graduation is very VERY difficult. But a 10 year plan with 150K at graduation is very doable, and you should even be able to pay that off more quickly (5 years or less in some cases depending on your income). That will open the door for you to get the debt monkey off your back and start becoming wealthy.
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