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Money & Debt

Debt vs Save

Attack the balance or grow the cushion?

Your inputs

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Results

PAY DEBT
$17,048 interest saved
score 97/100
SAVE
4% APY on deposits
score 3/100
Interest saved
$17,048
aggressive vs minimum payments
Payoff time
18 mo
vs 164 at minimums
Effective return
22.9%
guaranteed, by paying off
Rate gap
18.9 pts
debt APR − savings APY

High confidence · 97 vs 3 — a clear separation given your priorities.

Strongest reasons

  • Paying this debt off is a guaranteed 22.9% return — far above your 4% savings rate.
  • Aggressive payments save ≈ $17,048 in interest.
  • Debt-free 18 months from now vs 164 at minimums.

Main tradeoffs

  • Your emergency fund ($1,500) covers less than 1 month of expenses — build a $2,800 starter fund first.
  • Discipline required: freed-up payments should not be re-spent.

What would change the result

  • If your debt APR falls below 4.0% → SAVING FIRST becomes the better option.
  • If you can only pay less than $164/mo → the minimum, talk to a counselor before deciding.
  • Once savings exceed $8,400 (3 months of expenses) → shift all extra to debt.
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Assumptions: Minimum payment modeled as 2% of balance (min $25). · Savings APY held constant; no taxes on interest included. · No new charges added to the debt.. Pearto is a decision-support tool, not financial, legal or medical advice.

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