Loan: reduces future interest charges, pays off loan faster, may even push out your next payment due date (helpful if an unexpected expense makes it difficult to make a payment one month). If you plan to refinance, trade, or sell, you'll probably want the loan value to be less than the value of the property.
Invest: Possibly gain 50% each month, would owe taxes on your gains (I think 15%), could lose money instead of gaining. See if there are any fees associated with this (like trade fees for stocks). What in the world gains 50% each month?! I hope this is just an example you made up because that just sounds fishy. If this is a real example, please do your research.
Typically, the higher the return, the higher the risk - meaning at 50% gain each month there's a good chance you could lose everything you invest. If you're confident you can continue making on time payments on your loan and you'll gain a higher percentage (factoring taxes and fees) on the investment than your loan, you should consider it.
It's usually better to pay off any bills as fast as possible.
If you have a bill with $210 in interest/month (the interest goes down each month but I'm not sure of how much the future interest will cost), but you can pay off the payments faster. If you put aside $700 each month towards an investment (instead of that extra $700 towards paying off the bill faster), and can expect a 50% return each month no matter what (so you get an extra $350/month, and have a total of $1,050).
Is it smarter to do the investment to help pay off the bill faster, or just using the $700?
I think its obvious the investment would work better, but I'm just asking to make sure I'm not missing something.
I do not want the payments to take longer to pay off therefore having to pay more interest than I have to.
