Use our student loan payoff vs invest calculator to work out estimated interest-avoided proxy. Enter student loan balance and loan interest rate (%) — result...
Formula
const months = Math.max(1, Math.round(Number(inputs.years || 1) * 12)); const monthlyLoanRate = Math.max(0, Number(inputs.loan_rate || 0)) / 100 / 12; const monthlyInvestmentRate = Math.pow(1 + Math.max(-99.99, Number(inputs.expected_return || 0)) / 100, 1 / 12) - 1; const extraPayment = Math.max(0, Number(inputs.extra_payment || 0)); let remainingPrincipal = Math.max(0, Number(inputs.loan_balance || 0)); let principalPaidEarly = 0; let interestAvoided = 0; let investmentBalance = 0; let totalContributions = 0; for (let month = 0; month < months; month += 1) { const contribution = Math.min(extraPayment, remainingPrincipal); remainingPrincipal -= contribution; principalPaidEarly += contribution; interestAvoided += principalPaidEarly * monthlyLoanRate; investmentBalance = (investmentBalance + contribution) * (1 + monthlyInvestmentRate); totalContributions += contribution; } const estimatedInterestAvoidedProxy = Math.round(interestAvoided); const modeledInvestmentGrowth = Math.round(investmentBalance - totalContributions); const investmentGrowthMinusInterestProxy = Math.round(modeledInvestmentGrowth - estimatedInterestAvoidedProxy); return { estimatedInterestAvoidedProxy, modeledInvestmentGrowth, investmentGrowthMinusInterestProxy };Student Loan Balance
35,000
Loan Interest Rate (%)
6.5
Extra Monthly Payment
300
Expected Annual Investment Return (%)
7
Comparison Period (Years)
5
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With the default inputs, applying $300 per month for 5 years produces an estimated $2,974 interest-avoided proxy at a 6.5% loan rate. Investing the same monthly amounts at an entered 7% annual return produces about $3,480 in modeled investment growth above contributions. The investment-growth-minus-interest proxy is $506.
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The estimate combines Student Loan Balance, Loan Interest Rate (%), Extra Monthly Payment and returns Estimated Interest-Avoided Proxy, Modeled Investment Growth Above Contributions, Investment Growth Minus Interest-Avoided Proxy.
If the result changes your decision, verify the current quote, rate, eligibility rule, or provider term before acting.
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This calculator provides estimates based on the inputs provided. It does not constitute financial advice, investment recommendations, or tax guidance. Past performance does not guarantee future results. Consult a qualified financial advisor, accountant, or tax professional before making financial decisions.
Reviewed by the CalculateThis.ai editorial team. Updates: check back for latest parameters. Tools are for estimation only — verify with current provider terms.