Loan vs Investment Tradeoff Money Over Time

Decide what your extra cash should do: reduce debt (a guaranteed return) or invest (an uncertain return). This tool compares both paths over time, including taxes, compounding, risk bands, and a break-even return.

Inputs

Credit Card vs Market
Student Loan vs Index
Mortgage vs Retirement
Extra cash available
i
$
Time horizon
i
years
Loan details
Paying debt down is a risk-free return equal to your effective interest rate.
Loan balance
i
$
Interest rate (APR)
i
%
Loan type
i
Compounding (loan)
i
Interest is tax-deductible i
If deductible, debt payoff return is reduced by the tax benefit.
Investment assumptions
Investing has uncertainty. Turn on the risk band to see a likely range of outcomes.
Expected annual return
i
%
Investment tax rate
i
%
Compounding (investment)
i
Contribute timing
i
Show risk band (simulation) i
Runs a quick Monte Carlo range around your expected return using volatility.
How to use
  • Enter your cash and horizon, then your loan APR and investment return.
  • Use the break-even return to see what investing must earn to match the debt payoff path.
  • Turn on risk band to visualize uncertainty (10–50–90% outcomes).

Results

Summary
Timeline
Risk Range
Visual
Side-by-side outcome
Built for classrooms & real decisions. — WeekSpot.co