Having savings is important, especially when the savings are part of an emergency fund or a hedge against a loss of income. However, when you also have debt, in the form of an outstanding credit card balance or loan, you might want to consider whether you are 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 are earning on your savings versus the interest rate you are being charged on your outstanding loan balance. The difference between earning interest and paying it should give you a good indication of where you can get the best return.
Save or Pay Off Debt
Save or Pay Off Debt?
Debt Payoff vs Savings Summary
Interest Reduction on Debt
$ 132.02
Interest Earned on Savings
$ 15.18
By using your $50 per month to pay off debt rather than save, you will save $116.84 in interest charges and pay off your debt in 23 month(s) rather than your 24-month debt payoff term.
The accuracy of this calculator is not guaranteed by First Citizens Bank [or its affiliates] and is intended for informational purposes only. The calculator displayed does not constitute the advice of, or reflect actual products, services, rates and/or terms available from First Citizens Bank [or its affiliates] and nothing contained in the calculator shall constitute an offer or solicitation of a product or service by First Citizens Bank [or its affiliates].