Debt vs Invest Calculator. Pay Off Debt or Invest?
Where should the extra money go?
Compare putting spare cash toward a debt with investing it, and see which leaves you with more net worth after the years you choose.
- Free, no sign-up
- Runs in your browser
- Shareable results
- Educational only
Enter your numbers.
What you owe today.
The yearly interest rate on the debt.
The payment you must make each month. It must be above the monthly interest.
The spare cash you could use either way.
The yearly return if you invest, before tax and after fees.
Whole years, from 1 to 40.
These are hypothetical assumptions for learning, not forecasts or advice.
Result
Net worth under each choice.
View the year-by-year table
What the numbers mean.
Paying debt is a sure return.
Every dollar sent to a 7% debt saves 7% in interest. Investing has to beat that after tax and risk to come out ahead.
Risk is the missing number.
The investment return is an assumption and can be negative. The debt saving is certain, which is why the same average return is not an equal choice.
Rates decide the answer.
High-interest debt usually wins, and low-interest debt often loses to a reasonable investment return. The presets show both cases.
About this debt vs invest calculator.
A debt vs invest calculator compares two uses of spare cash: paying down a debt faster, or investing the money while you pay the minimum. Enter your debt balance, its interest rate, the minimum payment, the extra money you have each month, the investment return you expect and the number of years. The calculator shows the net worth under each choice and which comes out ahead.
The answer turns on the debt rate against the return you can expect, and on how much risk you accept. See inflation and investing for how returns are measured against prices. The compound interest calculator shows growth on its own, the savings goal calculator turns a target into a monthly figure, and the real return calculator shows growth after inflation.
How the debt vs invest calculator works in practice.
Using the default inputs: debt balance $20,000; debt interest rate 7%; minimum monthly payment $400; extra money each month $500; expected investment return 6%; years to compare 10 years.
Net worth, debt first: $109,987
Net worth, invest the extra: $109,412
Debt-free after, debt first: 2.0 years
Debt-free after, invest the extra: 5.0 years
Interest paid, debt first: $1,483
Interest paid, invest the extra: $3,715
Investments, debt first: $109,987
Investments, invest the extra: $109,412
Guaranteed return from paying debt: 7.00%
Assumed return from investing: 6.00%
With the “Higher debt rate (12%)” preset, paying the debt first is ahead by: $4,016. With the “Strong market (10%)” preset, investing the extra is ahead by: $1,694. With the “Low-rate debt (3%)” preset, investing the extra is ahead by: $1,178. Change one input at a time to see which assumption matters most.
How to choose your inputs for the debt vs invest calculator.
Debt balance. What you owe today.
Debt interest rate. The yearly interest rate on the debt.
Minimum monthly payment. The payment you must make each month. It must be above the monthly interest.
Extra money each month. The spare cash you could use either way.
Expected investment return. The yearly return if you invest, before tax and after fees.
Years to compare. Whole years, from 1 to 40.
How the debt vs invest calculator works.
Both choices use the same total cash each month, the minimum payment plus your extra money. In the first, all of it goes to the debt until it is gone and then to investing. In the second, only the minimum goes to the debt and the extra is invested.
Investments next month = investments × (1 + monthly return) + money not used for the debt
Net worth = investments − debt remaining
The model ignores taxes, the tax treatment of interest, investment risk, fees and the changing mix of payments. It compares net worth at the end of the years you choose and assumes steady returns.
Limits of this debt vs invest calculator.
The calculator assumes steady returns and a fixed debt rate, and it ignores taxes, fees and investment risk. A guaranteed saving from paying down debt and an assumed investment return are not the same kind of number, so the result should not be read as a recommendation. Interest on some debts may be tax-deductible, and an employer match or emergency fund may change the best order of priorities.
Common questions about the debt vs invest calculator.
Should I pay off debt or invest?
It depends mainly on the debt’s interest rate, the return you can expect after tax and your tolerance for risk. High-interest debt is usually worth paying first.
What interest rate makes paying debt better?
When the debt rate is above the return you can reasonably expect after tax and risk, paying it down comes out ahead. The calculator lets you test both.
Is paying off debt a guaranteed return?
Yes, in effect. Each dollar repaid saves interest at the debt’s rate, with no market risk. An investment return is only an assumption.
Does the calculator include taxes?
No. Interest on some debts may be deductible and investment gains may be taxed, depending on your country. Both would change the result.
Can I do both?
Yes. Many people split extra money between the two, or capture an employer match first. This calculator compares the two extremes.
More calculators.
Educational illustration only, not a forecast or personal investment recommendation. Results depend entirely on the assumptions entered.
Further learning: Glossary · Investor.gov: Financial tools and calculators · Research methodology · Financial disclaimer