[USER]

Just got a solid pay bump and debating what to do with it—should I throw an extra $1,000 into my 401k (which would max it out) or use it to aggressively pay down a $16k loan?

Doubling my loan payments would cut the payoff time in half.
Already contributing to my Roth and have a 6-month emergency fund in a HYSA.

What would you do—invest for the future or crush the debt faster?

[Scott]

Whatever the interest loan rate is, it’s probably for something that goes down in value.

Payoff the loan.

[Mac]

What rate is that loan at? Logic says you can get 3.7% from HySA and a conservative return from the market at 8% over a long period time (not guaranteed).

If the loan rate is above or equal to both of these then pay the loan down to free up money.

If the rate is below both the invest it in a hysa if you need it soon and the market if you are comfortable letting it be for the long haul.

$$$$ management is personal so you do what you want =]

[Tom]

Perhaps it’s because Dave Ramsey has taken over parts of my brain but I’d pay off the debt first.

[Brown]

You didn’t say what type of loan and the interest rate. I have a car loan at 0.9% interest right now that I am itching to pay off but it’s not worth it becuase the interest is so low.

If your interest on the loans is 3% or less, I would put the extra money in a Roth/401k.

Also, consider putting it in the HYSA for now while you start to explore and learn about real estate.

By the time you learn you could invest in a rental property, reit, etc with the money you have saved

[Zach]

I’d pull money from the emergency fund to pay off the loan now. Then I’d put the $1000/mo back into building up the emergency fund along with what you’re paying towards the loan already.

[Shaw]

Do both, like 50/50. I’d actually put it into a brokerage account. The short-term interest you save is usually peanuts compared to time in the market.

[Jean]

Doubling your loan payments will cut the payment time by more than half.

Throw your numbers into an amortization calculator.

[Elizabeth]

Paying off the loan should be top priority, being out of debt affords you the clarity of peaceful mind

You could put some money of that money into digital assets and hold until listing, then take profits to either pay off debt or put into 401k or you could do both depending on the ROA (your capital still returns dividends after listing)

[Paula]

How old are you? If you’re twenties into thirties then I’d max out 401k.

Forties to fifty then pay off the loan early.

[Author]

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