Is There Any Reason Not To Pay A Debt Off As Fast As Possible?

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Yes.

Two reasons.

Contrary to popular wisdom there is nothing fundamentally wrong with debt. The problem is with expensive debt. It’s the interest rate attached to most debt that makes the debt a bad thing.

If you could borrow £100 and pay back £100 a week, or even a year later, there’s not really anything wrong with that.

So the first instance in which it may not be important to pay off a debt as quickly as possible is when the debt is essentially free.

The second scenario is a little more complex.

If you can borrow money with an interest rate of 3% but you’re buying an asset that will reasonably appreciate at 10% over the same period, you’re still going to benefit to the tune of 7% over the lifetime of the debt.

This is the main argument as to why taking out a mortgage is a sound financial decision to buy a house. Given that houses, over the long term, appreciate in value.

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