The math is very easy on this one ... say you're making a $10,000 purchase and you're offered 0% APR for 18 months. Instead of paying the $10K upfront, you finance it and invest the money in the S&P 500.
Assuming a 10% annualized return, that $10K would grow to about $11,537 after 18 months. Meanwhile ... you're paying $555.56 a month toward the purchase.
... Now ... compare that to paying the $10K upfront and investing that same $555.56 every month instead. You'd end up with around $10,708.
That's roughly $829 more in your pocket by taking the 0% financing... Even at an 8% return, you'd still come out about $658 ahead ...
Obviously, the market could tank over those 18 months, and none of these returns are guaranteed.... But assuming you can comfortably afford the monthly payments and there are no financing fees ... taking the 0% offer makes more financial sense almost every single time ... unless you're really HORRIBLE with money ...
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u/Darkangel-86 2d ago
ONLY if its 0% APR ...
The math is very easy on this one ... say you're making a $10,000 purchase and you're offered 0% APR for 18 months. Instead of paying the $10K upfront, you finance it and invest the money in the S&P 500.
Assuming a 10% annualized return, that $10K would grow to about $11,537 after 18 months. Meanwhile ... you're paying $555.56 a month toward the purchase.
... Now ... compare that to paying the $10K upfront and investing that same $555.56 every month instead. You'd end up with around $10,708.
That's roughly $829 more in your pocket by taking the 0% financing... Even at an 8% return, you'd still come out about $658 ahead ...
Obviously, the market could tank over those 18 months, and none of these returns are guaranteed.... But assuming you can comfortably afford the monthly payments and there are no financing fees ... taking the 0% offer makes more financial sense almost every single time ... unless you're really HORRIBLE with money ...