If you're paying more interest on your loan or debt than you're earning on your savings, it makes sense to pay off the debt first.
For example, if you have savings in an account earning 2% interest, and you have credit card debt that you're paying 19% interest on, you would be better off to pay off the credit card debt first, before putting money into the savings account.
However, this isn’t a rule that applies to every situation. For example, mortgages and certain loans have fixed repayment terms that are not negotiable. If possible, it would be wise to try and build up savings in addition to making those payments.
There are 3 key things to consider:
A blended approach could make sense. Referring to the example above, you might: