There are times when you want to pay down (or off) debts so that the payments are no longer pulling down your monthly budget. There are also times when you are better off keeping the debt and investing the extra money that you have.
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1. No interest loans – these are the specials that many companies run (particularly at this time of the year). If you have the money to buy the item why not utilized the no interest loan and put the money into an interest baring account. You could even set up payments to come directly from the account if you are worried about forgetting to make a payment. The interest you gain may not be a fortune but it will be more than you would have made if you had paid cash.
2. Low interest debts – introductory rates on credit cards or even some loans make it viable for you to put extra money in a higher interest baring account instead of paying down the debt. As long as you are making more in interest than you are paying out it is a good choice.
3. Tax deductible debts – some loans (or at least the interest from the loans) can be written off on your taxes. This can make it possible to make more by investing additional payments instead of paying off a loan early. Talk to your tax professional about how paying down a tax deductible debt will ultimately affect you.
Keep in mind that when you have the money available to pay off a debt (even if it is invested in some other account) this is credit and not debt. The goal for a prosperous life is to always have the money to provide for your life.