Saving Versus Borrowing Calculator

The power of compounding, where gains from savings or investments are reinvested to generate additional earnings over time, makes saving for a given financial goal less expensive than borrowing.

This calculator will allow you to input the amount of money you need to save, along with the length of time you have to save and interest rate, and then determine the cost difference between saving and borrowing.

Click the NEXT button to see an example.

Here's an example:

  • Amount Required: $50,000

Years to:

  • Save 10 years at 7% annual growth
  • Borrow 10 years repayment at 7% interest
Save
Borrow
Difference
Monthly Amount
$292
$575
Total
$35,077
$69,002
$33,925

A family that aims to accumulate $50,000 in savings over a 10 year period only has to save $293 per month at 7% annual growth rate, whereas a family that borrows $50,000 at 7% interest when their student starts college will have to pay back $580 a month over a 10 year period. That's a difference of $33,925 in total payments!

Click the NEXT button to try it for yourself.

How much money do you need?
$
How do you want to save?
%
How do you want to borrow?
%
Save
Borrow
Difference
Monthly Amount
Total

Saving for $10,000 over a 10 year period is $6,785 less expensive than borrowing the same amount and paying it back over 10 years.