Eliminate Debt or Invest Calculator Help

See if it's better to pay down debt or invest your extra money until it can pay off the debt all at once. Will you pay more interest on your loan or earn more on your investment? Enter the information about your debt and investment and this calculator will show you how to lower debt the faster by showing what happens if you pay down debt first or put it into an investment until it grows to the pay off debt amount.

Input Fields:

Title A title for these calculator results that will help you identify it if you have printed out several versions of the calculator.
Additional Monthly Amount The amount, in addition to your Debt Monthly Payment amount, you can pay each month toward your debt or investment.
Cash On Hand Any cash you have available to be used as a lump sum payment toward your debt or as a lump sum deposit into your investment.
Federal Tax Rate The percentage of federal taxes you pay.
State Tax Rate The percentage of state taxes you pay.


Debt Balance The current total balance of your debts.
Interest Rate The interest rate (or average rate if there are multiple debts included in Debt Balance) you are paying on the debt.
Monthly Payment The principal and interest portion of each monthly payment. This may not be the amount you write a check for each month. Depending on the type of loan, your actual payment may include other amounts for escrow, private mortgage insurance (PMI), fees, or property taxes.
Tax Deductible Interest This box should be checked if the interest you are paying is tax deductible.


Starting Balance If you already have an investment plan that you will continue putting the additional money into, enter the balance here as a starting point.
Anticipated Rate of Return The rate you anticipate your investment will earn each year.
Taxable Returns This box should be checked if the investment earnings are reported on your yearly taxes.

Output Fields:

Invest Full Length
You will make minimum payments on the debt and additional money will be invested for the entire length of the debt. No money will be withdrawn from the investment even when the investment can pay pay off the debt.
Invest Extra to Pay Debt
You will make minimum payments on the debt and additional money will be invested. Money will be withdrawn from the investment to pay off the debt as soon as the value in the investment is more than the debt balance.
Invest After Debt Paid
All money will pay the debt until it is paid off, then all money will be invested.
Debt Payoff Time The number of years and months to pay off the debt using each strategy.
Effective After Tax Value The effective value of the investment at the end of the debt term. This may not be the actual value of your investment as shown on a statement. For comparison purposes and determining which strategy is best, this value has been adjusted for tax savings due to tax deductible debt interest and taxes paid on investment earnings.
Recommendation The recommended strategy always has the highest 'Effective After Tax Value', which is the investment value with tax savings added and taxes paid subtracted.


Total Interest Total amount of interest you will pay on the 'Debt Balance'.
Total Paid Total amount of principal ('Debt Balance') + interest you will pay while paying off the debt.
Tax Savings You will save this amount in taxes if the debt interest is tax deductible.
Effective Total Paid 'Total Paid' minus 'Tax Savings' is effectively what the debt will cost you.


Invested Time The number of years and months you will add money to your investment. Some strategies invest the entire time it takes to pay the debt.
Total Invested The total money added to your investment over 'Invested Time'.
Value Increase Also known as Return on Investment. Given the 'Anticipated Rate of Return', your investment will earn this amount during the time it takes to pay off the debt.
Total Value The investment value when the debt is paid. 'Starting Balance', 'Total Invested', and 'Value Increase' are included so the amount on an investment statement should be the same as this amount, assuming you did not withdraw money from the investment to pay taxes.
Taxes Paid The amount you will pay in taxes on the 'Value Increase' amount.
Effective End Value The investment's 'Total Value' minus 'Taxes Paid' reflects the true value of your investment for comparison purposes. The actual balance of your investment as shown on a statement will probably be higher since it is assumed you did not withdraw money from the investment to pay taxes.

Buttons and Checkboxes:

Show Amortization When checked, a section will appear below the calculator showing the complete amortization table.
Help Brings up this Help window.
Clear Clear (Use your browser's 'Refresh' or 'Reset' to restore default values.)
Printer Friendly Print Ready Format
Show Formulas Show Calculation Formulas
Show Additional Fields Show Additional Fields
Hide Additional Fields Hide Additional Fields

All calculators are made available as self-help tools for your independent use with results based on information provided by the user. All examples are hypothetical and are for illustrative purposes only. Calculated results are believed to be accurate but results are not guaranteed. Debt calculators are intended only to provide comparisons that may assist you with making decisions regarding how to handle your debt. All debt obligations need to paid each month by their individual due dates. Check all statements from creditors carefully to make sure you pay at least the minimum stated on each. If you have serious debt problems, please seek the advice of a qualified professional who is fully aware of your individual circumstances.
Presented by WebCalcSolutions.com and BizCalcs.com.
Copyright © 2005-2023 PeteSoft, LLC. All rights reserved.
Updated 04 Jul 2007