Pay off loan or invest?
spare money: early repayment = guaranteed 'yield' at the loan rate vs a taxed investment
Inputs
Verdict
Better option
Invest
edge 47 465,00 ₴ over 8 yrs
Interest saved
≈79 360,00 ₴
Investment gain
≈126 825,00 ₴
Break-even: the investment must yield ≥ 20,80% gross to beat a 16% loan (net 10,80% after tax).
Yr 1paydown 109 920,00invest 110 780,00
Yr 2paydown 119 840,00invest 122 722,00
Yr 3paydown 129 760,00invest 135 952,00
Yr 4paydown 139 680,00invest 150 607,00
Yr 5paydown 149 600,00invest 166 843,00
Yr 6paydown 159 520,00invest 184 828,00
Yr 7paydown 169 440,00invest 204 753,00
Yr 8paydown 179 360,00invest 226 825,00
Paying down a loan is a risk-free yield equal to its rate: beating a 16% loan takes ~21% gross after tax. Exceptions: subsidised loans (eOselya 3–7% — investing wins there) and when you need the liquidity.
About Pay off loan or invest
Pay off loan or invest — early repayment vs investment — break-even rate. Finance: Personal finance management. Use our tools without registration or installing software. All calculations happen in your browser — your data is never sent to a server.