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Student Loan Payoff vs. Invest Calculator

It’s an age-old question: Should you pay off your student loans or invest? The simplest answer is if your student loan debt has a higher interest rate than your expected return on investment, pay down your student loans first. If your investment earns a higher rate than your student loans will cost in interest, invest.

Many other variables, such as tax deductions and employer investment matching programs play into this equation. Use the Student Loan Payoff or Invest Calculator below to determine your repayment strategy.

OriginalWith PrepaymentSavings
Monthly payment$383$700$317
Interest paid$11,014$5,054$5,959
Time to repayment~10 yr~4.8 yr~5.2 yr
By paying an extra $317 per month ($700 total per month), you could pay off your loan in ~4.8 yr and save $5,959.
On the other hand, if you decided to invest the extra $317 per month for ~4.8 yr, here are your results:
OriginalWith Extra InvestmentSavings
Interest Earned$33,211$67,543$34,332
Final amount$49,811$102,529$52,718
By increasing your contribution by $317 per month ($517 total per month) for ~4.8 yr years, you will increase the balance of your retirement fund by $52,718 (including interest). The extra amount you contribute will continue to earn interest in your investment account for ~15.2 yr years after you finish contributing. You can see the long term results below:
Interest Saved/Earned$5,959$34,332

With your extra $317 per month over the next ~4.8 yr, you can save $5,959 in interest by prepaying your student loans and pay them off ~5.2 yr years sooner.

If you invested the $317 per month instead, over 20 yr you will have earned an extra $34,332 over the long term.

View our suggested resources:

Student loan refinancing rates as low as 2.56% APR. Check your rate in 2 minutes.

Student Loan Payoff vs. Invest Calculator FAQs

1. Should I take the calculations from the Student Loan Payoff vs. Invest Calculator and apply them directly to my financial situation?

No. The calculations here are for estimation purposes only. It’s important to note that this calculator in particular also factors in a lot of assumptions that may not hold true, such as annual expected return on investments as well as long-term tax rates. Additionally, there are other factors that this calculator cannot account for. As always, we recommend consulting a finance or tax professional when it comes to making your own financial decisions.

2. What value do I use for the “Extra Money Payment Amount” field?

This calculator assumes that you have extra money left over each month after you pay your monthly student loan bill. Enter the amount you have left over in the “Extra Money Payment Amount,” field. The calculator will then calculate where it may be best for you to apply this money (towards your student loans or an investment account).

If you do not have any money left over in your budget after paying your student loans, this calculator will not be helpful to you.

3. How do I make extra payments on my student loans and make sure the payments are applied correctly?

Check out this blog post to find out.

4. If I want to invest my money, how and where can I do that?

You can check out various investment options with our partners in the Student Loan Hero Marketplace.


  1. Prepaying student loans may be better than investing.
  2. Investing may be better than prepaying student loans.

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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.