Originally Posted by

**TKHunny** True, that minimizing interest is not a reasonable goal, but the claim can be investigated. Just make a list of terms and total interest. I'll use 8% Annual Interest, Monthly Payments, and a $100,000 loan.

30 years - Total Interest $164,155

25 years - Total Interest $131,544 - Saved $32,611 from previous

20 years - Total Interest $100,745 - Saved $30,799 from previous

15 years - Total Interest $72,017 - Saved $28,728 from previous

10 years - Total Interest $45,593 - Saved $26,424 from previous

5 years - Total Interest $21,658 - Saved $23,935 from previous

I think the advisor's point may be: "Wouldn't you rather save $32,000 than a mere $24,000?" The marginal interest savings do indeed decrease as you decrease the term, but ONLY because there is much less interest to decrease! For example, it would be very hard to save another $32,000 from the 5-year term, since there is only $22,000 to save!

1) Getting out of debt is almost always a good idea.

2) The specific terms of your contract MAY change the rules of interest if you try to pay it off early.

3) Certain types of securitization of these loans don't get paid at all if it is paid off too early. This may irritate investors and motivate a more sever implementation of point #2.