Managing debt in dentistry is a crucial aspect of financial success. Whether you recently graduated from dental school with student loan debt or purchased a dental practice, creating a plan to manage debt is a crucial aspect of success.
Debt can cause financial stress and lead to poor practice management, harming dental practices and patients. By creating an effective financial strategy, dentists can minimize debt and optimize their financial future.
Paying Off Dental School Debt
Most dental students must borrow heavily to pay for their classes, equipment, supplies, and testing fees. According to Lending Tree, the average dental school debt is $293,900. Over 42 percent of dental graduates have taken over $300,000 in student loans.
With the debt principal and interest, some students could end up paying over $500,000 to become dentists. Although most dentists make significantly more than the average graduate with a bachelor’s degree, it’s important to create a plan for paying off your student debt so you can start seeing a return on your investment (ROI).
You may be entitled to state or federal dental school debt forgiveness programs. For example, all U.S. states have programs to help qualifying students pay off all or part of their loans. The American Dental Education Association has a list of loan forgiveness programs for dentists based on which state you live in. The federal government also offers various loan forgiveness programs.
You may want to pursue an income-driven repayment plan if you need to lower your monthly loan payments. If you earn the average dentist’s salary of $164,000, you may still pay less through this type of plan, depending on your total unpaid loans. Refinancing your dental school loans to a lower interest rate could save you significant money and help you make your payments more easily. Paying off student loans aggressively and maximizing your earning potential can help you move forward financially.
Managing Dental Practice Debt
Dental practice owners usually must take on significant debt to start a new dental practice or purchase an existing one. In addition to facing significant student loan debt, the majority of dentists must pay off expensive, specialized equipment and mortgages if they’ve purchased a building.
Dentists frequently have lines of credit, corporate credit cards, and other types of debt. Careful planning can help dentists pay off their debt strategically rather than simply making minimum payments. Focusing on paying off higher-interest debts first can reduce the need to borrow more to pay bills and help free up cash flow.
Depending on your unique situation, consolidating all your debts into a single loan may reduce your overall interest rate. However, it’s important to carefully compare the terms and fees before consolidating your debt. Refinancing your loans to obtain lower interest rates is another option. Finally, working with an attorney who can help you negotiate with your creditors could reduce the total amount of your debts.
Contact a Dental Attorney Today
Managing debt strategically can help you thrive in your dental practice. Managing a busy dental practice is challenging enough, making it hard to find time to manage multiple debts at once. The attorneys at Mahan Dental Law are here to help. We will review your situation and help you develop a debt management strategy while protecting your personal and business assets. Don’t hesitate to contact Mahan Dental Law today to schedule a complimentary case evaluation.
