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Debt vs Invest Calculator
The classic dilemma: extra cash this month — pay down the loan, or top up the investment account? The answer is mathematical — compare your debt's after-tax interest rate against your expected after-tax investment return — but most online tools don't actually run the numbers. This one does, side by side.
Debt Rate
5.5%
Investment Return
10.0%
Spread
+4.5%
Pay off debt first
nets you $3,736 more over 30 years
Pay Debt First
$687,834
Debt-free in 5 yrs, then invest
Invest First
$684,098
$300/mo invested, $200/mo to debt
How the Debt vs Invest Calculator Works
How the comparison works
We project two scenarios with the same extra monthly cash: in scenario A, all of it goes to accelerated debt repayment until the debt is gone, then it pivots to investing. In scenario B, all of it goes straight into investments while you make minimum debt payments. We compare net worth at the end.
Frequently Asked Questions
When does paying debt win?
When the debt rate exceeds your expected investment return. High-interest debt (credit cards at 15–25%) almost always wins — there's no realistic investment that beats it. Mortgage debt (3–7%) is closer to a coin flip vs. equity investing depending on the rate.
What about the psychological factor?
Real, not modeled here. The math may say "invest" but if debt anxiety crowds out everything else, paying it down has non-financial value too. Use the calc as one input.
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