Scenario tools
Pay Down Debt or Invest
Debt or investing
Compare putting extra money toward debt with investing that same amount each month.
Use your own effective after-tax rate if a tax effect matters.
Use a conservative estimate. This is not a forecast.
Enter your debt, payment, extra monthly cash, timeline and expected investment return.
Both options should use the same required payment, extra monthly cash and comparison period. One directs the extra cash to debt; the other invests it. At the ending date, compare investments minus remaining debt, not just the size of the investment account.
For example, $8,000 invested alongside $5,000 of remaining debt is a $3,000 net position within this comparison. Being debt-free with $2,000 invested is a $2,000 net position. The first is $1,000 higher on those assumptions, but it still involves debt and market risk.
The reinvestment option assumes that money freed after payoff actually goes into investments. Turn it off when that is not your plan. A higher expected return is not equivalent to a contractual interest saving.
This is a simplified debt model, not a lender payoff quote. Promotional rates, daily interest, changing minimum payments and special student-loan benefits can require separate analysis. Use a verified effective tax assumption when relevant and keep an emergency reserve outside the extra cash being compared.
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