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Pay
down non- tax-deductible debt (with over 8% interest) as quickly as possible.
Try one of the loan calculators on
the Calculators page,
to see how much interest you can
save by paying down your debt more quickly!
We will assume:
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You have a $100,000 loan. |
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The interest is not tax
deductible. |
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Your
interest rate is 7.5%. |
Your monthly payment amount and the total
interest paid will vary greatly depending on how long you take to pay off
your mortgage.
The following table shows that you can save
almost $80,000 by paying off a $100,000 loan over 10 years instead of 25
years:
Loan Term
(years) |
Monthly Loan Payment
@7.5% Interest |
Total Loan
Payments |
Total
Interest Paid |
Amount Saved Using
Shorter
Term |
| 25 |
$ 739 |
$ 221,697 |
$ 121,697 |
$
0 |
| 20 |
$ 806 |
$ 193,342 |
$ 93,342 |
$ 28,355 |
| 15 |
$ 927 |
$ 166,862 |
$ 66,862 |
$ 54,835 |
| 10 |
$ 1,187 |
$ 142,442 |
$ 42,442 |
$ 79,255 |
Tax
tip: Pay down all non-tax-deductible debt with over 8%
interest, then see our Save and
Invest page.
Revised: December 18, 2010
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