How fast can someone pay off 55k in loans with 66k salary?
How fast can an individual with no wife/girlfriend and kids and a $1500 monthly rent pay off 55k in loans with a annually base salary of 66k? Think I can do it in a year? Is it possible if I live below my means and just spend all my money on loans (also I’ll be doing a lot of overtime so I will probably make around 80k annually most likely if not more)
- Karen LLv 72 months ago
Hard to say. First, let's assume that $66,000 is your gross pay. We don't know what country you're in, so we can't say how much income tax you'll pay. If it's the USA, what you take home is probably going to be about $50,000, or less if your employer deducts things like health insurance premiums. Let's use $48,000. That works out to $4,000 per month that actually ends up in your bank account. Take off $1500 for rent. You now have $2500. Take off what you pay for food you cook at home, utilities if your rent doesn't include them, transportation, clothes, phone, internet, TV service if you have one, health care that insurance doesn't cover, insurance on your belongings, and other incidentals that most people pay for. Entertainment, restaurant meals and beverages, gifts, haircuts, etc etc. If you live a more or less normal life, you'll be lucky to be able to pay less than $500 a month in North America for all those things and many people pay more. If you are very very disciplined with all those things--few people manage it, especially when young and earning for the first time--then you'll have $2000 a month to do whatever you want with. A year of paying all of it towards the loan means you will have paid off $24,000 of your loan. I don't when the interest on this loan will kick in, but when it does it will increase the amount you end up paying.
- MSLv 72 months ago
Not likely in a year, unless you make some serious overtime and live WELL below your means. You also have to consider other things that will come out of your pay - taxes, health care, utilities, etc. Then you need to feed and clothe yourself and pay for some form of transportation I assume, whether it be gas for your car or a subway pass. It sounds like you have a lot of money, but you aren't going to have enough to pay down that loan in a year.
If you break it down just on these numbers (not considering all the taxes that will come out before you see anything or interest on the loan):
$55k loans/12 monthly payments = $4583
$66k salary/12 monthly paychecks = $5500 - $1500 rent = $4,000
So even there you don't have enough to cover the necessary monthly payment on your loan.
But if you do make $80k:
$80k salary/12 monthly paychecks = $6667 - $1500 rent = $5166
In that case you would have enough to make such a payment, but you'd only have about $500 left each month for other expenses. And you're certainly going to have more than that taken out in taxes and such. So you still don't have enough even at $80k to pay it off right away.
While it's definitely smart to pay it off quickly, you shouldn't suffer so much to do so. Live frugally and put a good chunk of money toward your loans. But don't live so frugally that you aren't taking proper care of yourself or meeting your other financial obligations.
- SumDudeLv 72 months ago
The answer can be found in a budget (that you develop) !!
- Spock (rhp)Lv 72 months ago
between rent, food and taxes, I doubt it. More like 2 years
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- 2 months ago
Not in a year.
Make up a list of all of your expenses for a month (not including your loan)
Subtract that from what you take home each month after taxes
What you're left with is what you can put towards paying off that loan.
Without knowing more, I can't give you better information. If I knew more details about your loan (the term of the loan, the interest rate, your minimum monthly payment, etc...), then I could tell you exactly what to pay each month in order to pay it off in a certain amount of time. But I don't have that information, so this is it for now.
- 2 months ago
hmmmmmmmm like a year and a 5th if thats net.
- 2 months ago
You did not mention what your monthly expenses are nor did you mention your APR rate. So it is very hard to say.. However, a year? I don't think so, especially on a 66,000 base salary. No way.
Also wrong category.