Free Debt vs Invest Calculator (US) – Pay Off Debt or Invest Extra Money?

Use this Debt vs Invest Calculator to test a common question: should extra money go toward paying off debt sooner, or investing for potential growth?

This tool compares two simplified paths: (A) pay minimum + extra toward debt, versus (B) pay minimum only and invest the extra. Results depend entirely on your inputs.

See months-to-payoff and interest paid
Estimate investment growth over a selected horizon
Compare net worth and an estimated breakeven return

Best practice: run 3–5 scenarios (lower return, higher return, different APR) to see how sensitive the outcome is.

Debt vs Invest Calculator

Compare paying down debt faster versus investing extra monthly cash using transparent assumptions. This is an educational simulation—not financial advice.

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Privacy-first

No logins. No saved inputs.

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Transparent

Clear assumptions + outputs.

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Educational

Not financial advice.

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US-friendly

Common finance defaults.

Inputs

Run multiple scenarios (3%, 5%, 7% returns) to stress-test the decision.

Debt

Debt balance $ Total amount owed today. APR % Annual interest rate on the debt.

Monthly minimum payment $ Required monthly payment. Extra monthly money $ Either invested or used to pay extra debt.

Investing assumptions

Expected annual return % Steady-return assumption for simplicity. Time horizon yrs Comparison window for results.

What this tool compares:

Scenario A: Pay minimum + extra to eliminate debt sooner.
Scenario B: Pay minimum only and invest the extra each month.

See personal finance tools for everything we have to offer.

Results

Estimated outcomes at the end of your chosen horizon.

Winner

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Net worth difference (B − A)

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Scenario A: Pay Debt Faster

Months to payoff—

Interest paid—

Debt remaining—

Net worth—

Scenario B: Invest Extra

Months to payoff—

Investment value—

Debt remaining—

Net worth—

Breakeven return Estimated

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Approx. annual return where outcomes are similar (range −10% to 30%).

Net worth over time Monthly simulation

Reference (educational): Consumer Financial Protection Bureau (CFPB) – Consumer Tools

Methodology & Data Sources

This Debt vs Invest Calculator is an educational simulation designed to help users explore financial trade-offs between paying down debt and investing excess cash. The calculator uses simplified assumptions such as fixed interest rates, steady investment returns, and illustrative tax treatment to demonstrate how different choices may affect long-term outcomes.

Concepts related to consumer debt and interest costs are informed by guidance from the Consumer Financial Protection Bureau (CFPB) , which explains how interest and repayment structures can materially impact household finances.

Retirement account assumptions, including 401(k) contribution concepts and general tax treatment, are based on publicly available information from the Internal Revenue Service (IRS) .

Investment return assumptions and risk considerations align with educational resources published by the U.S. Securities and Exchange Commission (SEC) , which highlights that investing involves risk and that outcomes are not guaranteed.

Information related to interest rates and household borrowing trends is broadly consistent with data and explanations provided by the Federal Reserve .

These sources are provided for general educational reference only. InvestingLab.com is not affiliated with any government agency and does not provide financial, tax, or legal advice.

For details on assumptions and limitations, see our How Calculators Work and Disclaimer.

FAQ

Common questions about debt payoff versus investing.

Is Debt vs Invest calculator a financial advice?

No. This is an educational financial simulation to help you understand trade-offs.

Why does high-interest debt often “win”?

Because paying it off is similar to earning a risk-free return equal to the APR avoided.

Why doesn’t this include market crashes or volatility?

Version 1 uses steady returns for clarity. You can stress-test by using the 3% and 5% buttons. We can add volatility scenarios in a later version of our tool.

What is this calculator comparing?

It compares two simplified strategies for extra monthly cash: pay down debt faster (Scenario A) or invest the extra while paying minimums (Scenario B).

Why is there a tax drag option?

Taxable investing can reduce effective returns depending on dividends and realized gains. Tax drag here is a simplified assumption, not personal tax guidance.

Is paying debt the same as “guaranteed return”?

Paying down debt avoids future interest at your APR, which behaves like a risk-free return equal to that APR (before taxes and other factors).

Why can the “winner” change when I adjust assumptions?

Because small differences in return, APR, and time horizon compound. If results are close, a modest change in assumptions can flip the outcome.

Does this include employer match or taxes?

This version is intentionally simplified for clarity. If you want, we can add advanced toggles like 401(k) match and tax drag, consistent with your other tools.

Educational Disclaimer

InvestingLab.com provides educational financial tools and simulations only. We do not provide financial, tax, or legal advice. Results are illustrative and depend on user-provided assumptions.