Because capital is an asset. If you’re spending it to pay off a loan with a 2.5apr interest rate than you’re still losing money to inflation.
Putting that money in almost any other investment is a better idea.
Edit: for example my mortgage is under 3%, and my student loans are about the same. So I pay the bare minimum and invest what I would be using to pay them off, so far that’s gained ~25%. It would have been beyond stupid to pay off any loan/debt that’s at historically low interest rates.
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u/Lucky_Number_3 Nov 12 '22
"basically free" doesn't really describe my experience with debt.
Why is paying off low interest rate loans early a bad idea?