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Loan repayment – best investment

If you have the money left and you want to invest that money somewhere, like in stocks or securities, then I have one interesting proposal and it will pay off all your debts and then start thinking about investments! The credit is exactly the opposite of the investment, because you are not getting extra interest on the credit you receive, but you have to pay the interest for using that money.

Repayment Loan

Repayment Loan

That is why, if you are making money, then the best thing you can do with this money is to repay your loans , because then you will not have to pay these interest payments every month and, of course, the monthly principal payments, which will mean that you will be able to devote a greater part of your salary directly to creating savings or other spending that you could not afford to date.

When you no longer have credits you will no longer lose money, which is already very good in itself, but it is even better that you can start investing this money in different places and getting money instead of paying those percentages. Most people who have managed to get enough savings during their lifetime can then use these savings to generate passive income in the form of interest. And, for example, the issue of a loan to someone else is based on passive income, because you do not have to pay the interest yourself, but the person pays you that money and still pays interest.

Credit interest rates range from 4% per annum to several tens of%, and therefore it is usually the most advantageous to repay those debts that have higher interest rates and hence higher losses. If there are 2 credits where one has a 50% APR, and the other has only a 5% rate, then even without thinking it is clear that the first loan here is much less profitable and you lose even ten times more money than this. second credit.

And that’s why you have to start paying off with these extra funds at the beginning of a loan with higher interest. It is the same as if you wanted to invest, you would, of course, choose a place where you could get as much interest as possible, but when you repay the loan you get the interest, where you may find yourself facing a financial crisis or investing money. any other economic problems and you lose all your money and stay without these investments. So be careful and start with thinking about investing in cash, better think about repaying your debts and only if your return on investment is much higher than interest on credits and you’re 99% sure that this investment is safe then choose money to invest rather than pay credits.