Prepay vs Invest Calculator

Should you invest or pay off debt?

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.

Loan Details

Is Interest Tax Deductible?

Investment Details

Amount Earned Investing


Amount Saved Prepaying Loan Off




What are the assumptions used in this calculator? read more
What does it mean?
Based on your inputs, it appears that you would be better off paying down your debt as rapidly as possible. You’re expected to save $xxx in interest expense and eliminate xx monthly payments. Your expected savings are $XXX more than the $XXX you’re expected to earn if you invested the extra cash.
Based on your inputs, it appears that you would be better off investing the extra money while continuing to make your scheduled monthly loan payments. By investing the $xxx each month at x.x%, you would earn $xxx over the remaining life of your loan. Your expected earnings are $xxx more than the $xxx you’re expected to save if you applied the extra cash to your loan payments each month.
Monthly Payment results
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