Pay off student loans
or invest? Your exact answer.

Three stages. Rough answer in 30 seconds, then refine as much as you need. Formula-driven — no guesswork.

✓Formula-driven, not AI-guessed ✓IRS 2026 rules applied ✓No data stored or sent ✓Updated 2026

Stage 1 — The quick answer

Start from a profile, or enter your own numbers below

Not sure of exact numbers? Estimates work fine at this stage — you'll refine them in Stage 2. Use round numbers and get the rough picture first.

Loan balance

Your remaining balance

Interest rate

Your annual rate

Extra monthly cash

To put toward debt or investing

Enter all three values to see your result

Your rough answer

—

Pay off clearly Invest clearly

Break-even investment return

—

If your investments earn above — annually, investing likely wins. This is your loan's effective rate after the tax deduction.

Methodology last reviewed April 2026 · View sources →

Stage 2 — Refine your answer

Adding your real numbers will make this more accurate. See exactly how the answer changes.

Expected investment return

S&P 500 real avg ≈ 7%

Federal tax bracket

Affects deduction value

Remaining loan term

yrs

Standard = 10 years

Refined answer

—

Pay off clearly Invest clearly

Break-even return (refined)

—

After your 22% bracket deduction, this is your loan's true effective cost. Any investment return above this builds more wealth.

Stage 3 — Add a life event

What kind of event?

In how many years?

yrs

From today

Amount

One-time payment

Apply

Impact on your Freedom Date

—

🗓

Multi-phase planning coming in Phase 2

Model complex sequences like minimum payments for 3 years, then a lump sum, then split invest/payoff strategy. Get notified when it launches.

⚠ Educational tool only. Not personalised financial advice. How we calculate this.

Explore scenarios

Expected investment return 7.0%

Extra monthly cash $400

Loan interest rate 5.8%

Pessimistic

—

4% returns

Realistic

—

Your input

Optimistic

—

10% returns

Invest path growth Payoff interest saved Return range 4–10%

Your scenario analysis is ready

Get an audit-ready PDF with all scenarios — for less than one hour of advisor time.

✓ Amortisation. Standard amortisation formula. Extra payment is applied to principal first each month, reducing the interest base going forward and compressing the payoff timeline non-linearly.

✓ IRS Publication 970 (2026 tax year). Student loan interest deduction: up to $2,500/year deductible against ordinary income. The break-even rate displayed already reflects your after-deduction effective cost. IRS Publication 970 →

✓ Deduction phase-out thresholds (2026). Phase-out begins at MAGI $75,000 (single) / $155,000 (joint) and is fully phased out at $90,000 / $185,000. Set your tax bracket to 0% in Stage 2 if your income exceeds the upper limit.

✓ Investment return source. Default 7% sourced from NYU Stern's Damodaran dataset — S&P 500 arithmetic average real returns, 1928–2025. Past returns do not guarantee future results. NYU Stern Damodaran data →

✓ Privacy. All calculation runs in your browser. No data transmitted.

Limitations. Does not account for: employer 401(k) match (always maximise this first), state income taxes, income-driven repayment (IDR), Public Service Loan Forgiveness (PSLF), or inflation. Consult a licensed CFP for your specific situation.

Common questions

Does the $2,500 student loan interest deduction affect this?

Yes — applied automatically. The deduction phases out at MAGI $75k–$90k (single) or $155k–$185k (joint) for 2026. Your break-even rate already reflects your effective after-deduction cost. If you're above the phase-out threshold, set your tax bracket to 0% in Stage 2.

What if I'm on PSLF or income-driven repayment?

Forgiveness programmes change the maths fundamentally. On PSLF, aggressive extra payments can mean forfeiting forgiven principal — the opposite of efficient. Use the Teacher/PSLF preset as a starting point and note that minimising payments (not maximising them) is often optimal if forgiveness is likely.

Why should I maximise my employer 401k match before using this?

Employer match is an immediate 50–100% guaranteed return on your contribution. No debt payoff or market investment comes close. Maximise match first, build a 3–6 month emergency fund second, then use this calculator to decide between extra debt payments and further investing.

Pay off student loansor invest? Your exact answer.

Pay off student loans
or invest? Your exact answer.