While it’s never a bad idea to get rid of debt as soon as possible, you should first consider whether you can invest your surplus monthly cash and earn a greater return than the interest cost of your loan.
If your debt has a higher interest rate than what you’d expect to earn from an investment, then you should always pay down your loan first. However, if you’ve locked in a really low interest rate, can afford your monthly payments, and have opportunities to earn more than your loan’s interest rate then it’s smart to consider investing.
Before making your decision, you should consider other factors such as tax deductions on interest expense, impact of rising interest rates on a variable rate loan, and riskiness of the investment.
Is Interest Tax Deductible?
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