Why repaying debt is a return
Every euro of debt you repay early stops costing interest from that day on.
If the loan costs 15% a year, repaying it early saves 15% a year on that euro, with no risk and no fees.
Few investments promise 15% a year, and none that do can guarantee it, which is why the debt versus invest calculator treats repayment as the benchmark.
Debt versus invest example
Example: €200 a month for 36 months, a loan at 15% a year, and a crypto scenario of 20% a year followed by a 50% fall.
| Choice (example) | Value after 36 months |
|---|---|
| Paid in | €7,200 |
| Extra loan repayments, with interest saved | About €9,023 |
| Crypto, if it rises 20% a year | About €9,510 |
| Crypto, if it rises 20% a year and then falls 50% | About €4,755 |
Illustrative scenario calculated with the debt versus invest calculator above; the crypto rise and fall are assumptions, not forecasts.
Even when crypto rises by 20% every year, it beats repaying a 15% loan by only a few hundred euros, and a single fall at the end leaves it far behind.
Which debts to repay first
| Debt | Typical interest pattern | Priority before investing |
|---|---|---|
| Credit card balance | High | Repay first |
| Consumer loan or instalment plan | Often high | Repay first |
| Car loan | Moderate | Usually repay or keep paying on schedule |
| Student loan | Often low | Depends on the rate |
| Mortgage | Often lowest | Usually keep paying on schedule |
General patterns; check the interest rate on your own loans.
The higher the rate, the stronger the case for repaying before investing in anything risky.
What the debt versus invest calculator leaves out
- Fees: buying and selling crypto costs fees, which lower the crypto result.
- Taxes: gains on crypto may be taxable, while interest saved is not taxed.
- Early repayment terms: some loans charge a fee for early repayment; check your loan agreement.
- Your buffer: do not use your emergency fund to repay debt if that leaves you with no cash for surprises.
Borrowing to invest in crypto
The opposite case, taking a loan to buy crypto, combines a guaranteed cost with an uncertain result.
If the price falls, the loss is yours and the debt remains in full.
The card purchase calculator shows what buying crypto on credit costs.
Struggling with debt? Many countries offer free public debt advice. If loan payments are hard to manage, talk to a debt advisory service before thinking about investing.
A sensible order of steps
- Small cash buffer: so that an emergency does not create new debt.
- Expensive debt repaid: credit cards and high-interest loans.
- Full emergency fund: with the emergency fund calculator.
- Then investing: with the investing budget calculator, keeping crypto to a share you can afford to lose.
Debt versus invest: interest rates compared
Example: €200 a month for 36 months put into extra loan repayments, at different loan rates.
| Loan rate | Value of extra repayments | Interest saved |
|---|---|---|
| 3% | About €7,524 | About €324 |
| 8% | About €8,107 | About €907 |
| 15% | About €9,023 | About €1,823 |
| 25% | About €10,567 | About €3,367 |
Calculated with the debt versus invest calculator's formula, compounded monthly; illustrative.
At low rates the saving is modest, and the choice is closer; at high rates, repaying the loan is a strong, guaranteed result that crypto would have to beat after fees, taxes and risk.
Debt versus invest: what "guaranteed" means here
Repaying a loan early does not create money, but it stops interest from being charged on the repaid part, and that saving is certain once the payment is made.
An investment, by contrast, can rise, fall or be lost, and its result is known only when you sell.
Comparing a certain saving with an uncertain return is why the calculator shows a fall scenario next to a rise.
Debt versus invest: special cases
- Mortgages: low rates and tax rules in some countries make early repayment less compelling; many people keep paying on schedule.
- Student loans: repayment terms vary widely; check the rate and conditions.
- Credit cards and instant loans: usually the most expensive; repaying them first is the common advice.
- Early repayment fees: some loans charge them; include them in your comparison.
Debt versus invest: a step-by-step order
- List your debts with balance, rate and monthly payment.
- Keep a small cash buffer so a surprise does not create new debt.
- Pay extra on the highest-rate debt while paying the minimum on others.
- Move to the next debt when the first is cleared.
- Build the full buffer, then consider investing.
Debt versus invest and emotions
Paying off debt can feel less exciting than investing, especially when friends talk about crypto gains.
But a cleared debt reduces monthly costs permanently, and it makes any later investment safer, because a fall in prices no longer threatens your ability to pay a loan.
Debt versus invest calculator: a worked comparison
Example: €3,000 of credit card debt at 18% a year, or the same €3,000 invested in crypto.
| Choice | After one year | Certain? |
|---|---|---|
| Repay the debt | About €540 of interest avoided | Yes |
| Invest, price up 30% | €900 gain, but €540 interest still paid | No |
| Invest, price flat | €0 gain, €540 interest paid | No |
| Invest, price down 50% | €1,500 loss, plus €540 interest | No |
Example only; simple interest on the full balance for one year, before fees and taxes.
In this example, the investment only comes out ahead if prices rise by more than 18%, while repaying the debt always gives the same result.
Debt versus invest calculator: debts with low interest
Low-interest debts such as many mortgages are a different case from credit cards or consumer loans.
Even then, a mortgage payment is fixed and must be paid in every market, while crypto can fall sharply, so investing instead of keeping a buffer still adds risk.
The calculator compares rates, but your ability to keep paying in a bad year matters as much as the rate.
Debt versus invest calculator: payday and buy-now-pay-later loans
Short-term loans and some instalment plans have very high effective annual rates once fees are counted.
No realistic investment plan justifies keeping such debt while buying crypto.
If debt is causing stress, free debt advice is available in many EU countries through public services or non-profit organisations.
Debt versus invest calculator: questions readers ask
What about a 0% offer? A true 0% period has no interest cost, but it ends, and investing borrowed money still means you owe it whatever happens to prices.
Should I invest while repaying a student loan? It depends on the rate and terms; compare the rate with what you might realistically earn, and keep the emergency fund first.
Is borrowing to buy crypto ever sensible? The card purchase calculator shows why it greatly increases risk, because you can lose the money and still owe the debt with interest.
Debt versus invest calculator: the effect over several years
Example: €3,000 of debt at 18% a year, left unpaid with interest added once a year.
| Year | Balance if not repaid |
|---|---|
| 0 | €3,000 |
| 1 | €3,540 |
| 2 | €4,177 |
| 3 | €4,929 |
Example only; real cards often add interest monthly, which makes the balance grow slightly faster.
After three years, the debt has grown by almost €1,930, which an investment would have to beat after fees and taxes just to break even.
Repaying the debt first removes that hurdle completely, whatever the market does.
Once the expensive debt is gone, the money that went to repayments can become a planned investing budget, as the crypto investing budget calculator shows.
Paying more than the minimum each month shortens the time the debt takes to clear.
Every euro of debt repaid saves its interest with certainty.
Frequently asked questions
Should I pay off debt or invest in crypto?
For expensive debt, repaying usually comes first, because it gives a guaranteed return equal to the interest rate. Crypto gives no guarantee and can fall sharply.
How does the debt versus invest calculator value repayments?
It treats each extra repayment as saving interest at the loan rate, compounded monthly, which is roughly what repaying early is worth.
What interest rate makes repaying debt the better choice?
There is no fixed line, but the higher the rate, the harder it is for any risky investment to beat it reliably.
Should I repay my mortgage before investing?
Mortgages often have low rates, so many people keep paying them on schedule. Expensive consumer debt is a different matter.
Is it a good idea to borrow money to buy crypto?
No. A loan has to be repaid whatever happens to the price, so a fall can leave you with a debt larger than the crypto is worth.
Is my data saved when I use the debt versus invest calculator?
No. Everything runs in your browser and nothing is stored or sent.
Every figure on this page is checked against the ESMA register, the exchange's own terms and fee pages or another primary source, and the sources are listed above. Editorial policy · How we rate