Paying Off Your Loans Versus Investing - What Should You Do?

How much debt do you have? Five, ten, twenty thousand? Let’s assume that you have a $10 k student loan debt. Now lets also say you happen across $10k. Should you pay off your loan or should you invest the money? Could you make more money on an investment than what your debt costs you? If so, then invest. If not, then pay off your debt. Its simple economics.

The USA Today article, Pay Off Debt or Invest? That is the Question, sums it up best: Imagine you are paying 16% interest on a credit card. The same high interest rate won’t apply safely and consistently on an investment. In this situation you should pay off the debt. Sometimes, the best investment is avoiding the interest on a loan. Read more…