Debt Investment Calculator

Before you rush off to the stock markets, make sure that you are investing some of your money into your own debts. For instance, if you have credit cards with Annual Percentage Rate (APRs) of 21%, you can earn a 21% return on your investment if you make more monthly payments towards that 21% APR credit card, rather than investing in the stock market. Furthermore, any money you save on NOT having to pay the 21% APR is tax-free. Thus, use this Debt Investment Calculator to find out your earnings had you increased your monthly payments on any of your debts (preferably credit cards with the highest APRs).

Enter the current monthly payments you make towards your debt. Then, add the additional monthly payment you could squeeze out in order to pay off your debt faster. Then, click on "Compute" and you will see the Return on Investment (ROI) on your debt.

Principal Balance Owed
Annual Interest Rate
Current Monthly Payment
Additional Monthly Payment
Interest Savings
Annual Return on Investment
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Todd Comments on March 27th, 2007

I owe $5000 in student loan debt, so I entered in the appropriate values. The results I get are:

If you add $50 to your monthly payment, you will pay off this debt in 38 payments instead of 60, and you will save $352 in interest charges. This savings translates into a guaranteed, tax-free, average annual return of 5%. And that's not even considering the emotional returns you'll get when you pay off this debt 22-months (1 years, 10 months) ahead of schedule!

Awesome calculator!