For many borrowers, one of the primary advantages of spending down lower-interest debts such as for example mortgages and student education loans is the fact that “return on investment” is fully guaranteed. You always save on interest if you pay off the loan early. With investing, you might make an increased price of return, but it is maybe not assured.
Unfortuitously, the “guaranteed return” from very very very early financial obligation repayment is gloomier than it seems. Even though you may think you are saving 4%, or 6%, or whatever your interest is, make sure you remember about inflation and fees. Continue reading