Paying off a loan at twenty percent is the same as an investment that returns twenty percent, guaranteed and tax free. Nothing you can buy does that. So the order is simple: cushion first, then every spare euro goes to the most expensive debt until it is gone, and only then do you invest.
Not all debt is the same. A fast loan or a credit card at fifteen to fifty percent is an emergency. A car loan at eight percent is a bad habit. A mortgage at three percent, with prices rising faster than that, is close to free money, and there is no hurry to pay it back early.
The test is one number: the interest rate on the loan, next to the return you honestly expect from investing. Whichever is higher gets the euro.
Two people, twenty and forty years on
Both start with the same debt, two months of spending at twenty percent. Ana puts every spare euro into it until it is gone, then invests. Ivo invests from the first year, pays the interest for ten years, and only then clears it.
In Bulgaria, as of September 2026
Loans in Bulgaria are cheap at the moment. A mortgage costs around three percent a year, a consumer loan a few percent more, and a fast loan is capped by law at roughly fifty percent. With inflation on the high side, a cheap loan costs you little in real terms; an expensive one is the fastest way I know to undo years of saving.