Having savings is important, especially when the savings are part of an emergency fund or a hedge against loss of income. But when you also have debt in the form of an outstanding credit card balance or loan, you might want to consider whether you're better off using the money you have in savings to pay down debt. Whether it makes sense or not is determined by the interest rate you're earning on your savings versus the interest rate you're being charged on your outstanding loan balance. The difference between the interest you earn and the interest you pay should give you a good indication of where you can get the best return.
Use this calculator to find out if you should pay off debt or save.
Change the numbers in each input field by entering a new number or adjusting the sliders. After entering your data into each input field, the calculator results will automatically update the summary statement and chart.
