Should I cash Savings Bonds to pay off a loan?

Should I cash in Series EE Savings Bonds issued in 1991 to pay off current debt with interest rates at plus 6%?

Tom's response

Your Savings Bonds are earning 4.00%, so you'd make more than 2% a year by cashing the Savings Bonds and using the money to pay off the loans. Keep in mind that not all of the Savings Bond money will be available to you - you should hold some back for taxes.

However, for this to work, you have to continue making the same monthly loan payment to yourself. The deal isn't complete until you've bought new Savings Bonds to replace the ones you are cashing.

If you don't have the discipline to do that, you may be better off keeping the Savings Bonds as an emergency cash fund.