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Banking & Budgeting

Should I Pay Down Debt Or Invest My Monthly Surplus?

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When you receive some extra money it may be difficult to determine whether you should invest the funds or use them to retire debt. Financial theory recommends that if your after-tax return on investments is greater than your after-tax cost of debt then you should invest. However, remember to consider the inherent riskiness of the investment you select (i.e. you may lose the money you invest yet still have obligations to pay back the liability). Use this calculator to help analyze your situation.

Rates and Assumptions	Input
Interest rate on debt: (%)	(0-30)%
Is the interest deductible?	NoYes
Before tax return on investment: (%)	(0-12)%
Is the interest taxable?	NoYes
Marginal tax bracket: (%)	(0-50)%
Monthly funds available	(0-9999999)$

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Rates and Assumptions	Input
Interest rate on debt: (%)
Is the interest deductible?
Before tax return on investment: (%)
Is the interest taxable?
Marginal tax bracket: (%)
Monthly funds available

See All Calculators

{ "fields" : { "udata" : [ "debtInterestRate" , "interestDeductible" , "beforeTaxReturn" , "interestTaxable" , "taxBracket" , "monthlySurplus" ] } }

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This calculator is provided by Financial Calculators, Inc., and is intended solely for general information and educational purposes. You should not take any action on the basis of the information provided through this calculator. Please see the disclaimer for further information and limitations.

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Rates

See today's average rates across the country.

• Mortgage

  Loan Type	Today	Last Week
  30 Year Fixed	5.13%	5.16%
  15 Year Fixed	4.70%	4.60%
  1 Year ARM	3.98%	4.00%
  30 Year Fixed Jumbo	6.06%	6.10%
  5/1 ARM	4.30%	4.26%
  3/1 ARM	4.75%	4.80%

  Source: Bankrate
• Home Equity

  Loan Type	Today	Last Week
  $30K Home Equity Loan	8.35%	8.39%
  $50K Home Equity Loan	8.36%	8.41%
  $75K Home Equity Loan	8.39%	8.44%
  $30K HELOC	5.24%	5.26%
  $50K HELOC	4.99%	5.00%
  $75K HELOC	4.99%	5.00%

  Source: Bankrate
• Savings

  Savings Type	Today	Last Week
  6 month CD	1.13%	1.15%
  1 year CD	1.61%	1.63%
  3 year CD	2.28%	2.29%
  MMA	1.04%	1.05%
  $10K MMA	1.13%	1.13%
  $25K MMA	1.34%	1.35%

  Source: Bankrate
• Auto

  Loan Type	Today	Last Week
  36 Month New Car Loan	6.90%	6.96%
  48 Month New Car Loan	7.05%	7.12%
  60 Month New Car Loan	7.11%	7.18%
  36 Month Used Car Loan	7.39%	7.43%
  48 Month Used Car Loan	7.50%	7.51%

  Source: Bankrate
• Credit Cards

  Card Type	Today	Last Week
  Business Credit Cards	9.69%	9.69%
  Low Interest Credit Cards	11.91%	11.91%
  Cash Back Credit Cards	12.36%	12.36%
  Reward Credit Cards	12.85%	12.85%
  Instant Approval Credit Cards	13.32%	13.32%
  Balance Transfer Credit Cards	13.46%	13.46%

  Source: CreditCards.com

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