 TITLE: Should I Pay Off Debt Before I Invest? CONTENT: Look at Debt APR vs. Your Investment's Expected Return\n------------------------------------------------------\nOnce you have your basic needs taken care of, the easiest way to decide whether you should pay off debt or invest is to look at the interest associated with both choices.\nIf you know the rate your investment portfolio—or an investment such as a mutual fund or stock you're considering if you don't already have a portfolio—earns, use it as a benchmark to determine which debts to pay off before you invest.\nSay your portfolio yield is 7.5%. If you have credit card debt at a 17% interest rate, you'd effectively be earning 17% in the form of interest savings when you eliminate that debt. On the flip side, if your only debt is an auto loan that charges a 3.5% annual percentage rate (APR), you'll earn more by investing your extra cash than by using it to pay down the car loan more quickly.\nDebts such as payday loans, auto title loans and personal loans with repayment terms of less than one year generally charge very high interest rates, and thus paying them down should almost always take priority over investing.\nIn some cases, you may see an interest rate instead of an APR—the two are not the same. While an interest rate represents how much interest the lender is charging you to borrow money, the APR represents the full cost of financing, including fees and other charges. Use an online APR calculator to find out what you can expect to pay on your debt. END