> Is that hypothetical 3% gain worth keeping the debt, which has risks of its own? e.g. you are incapacitated due to an accident, or you incur a huge medical bill that you need to split into payments, but you can't pay much because, oh "i just have this loan at 5% that's not worth paying off.

Actually, if something bad happens you've got $10k in the bank. So when you are incapacitated, you've got several months' of living expenses -- or you can pay off the medical bill outright.

The common "pay it all off; no debt ever" advice that I've seen given out for free on the internet is geared toward people with tons of debt. This advice is not great for persons with small amounts of debt, good cash flow, and a healthy emergency fund. When you reach this point, you have the option to use debt as a tool, and you have the ability to negotiate with lenders to get better terms. (Implied here is that you can negotiate better terms because you have the ability to simply pay cash and walk away from the debt-negotiation table.)