This is absolutly false. Whatever money you have in the savings account will GAIN a net of 1% interest over the course of that year. Regardless of the interest rate you are paying on an installment loan, that money still represents a LOSS of your overall net worth. Its outgoing money. The 12% represents the money you saved yourself on future interest paid on the loan if you were to only make minimum payments. Its does NOT represent any type of actuall monetary gain on your part, it just means you didnt waste as much as you could have.
For example if you get a $10,000 loan at 12% interest and make only the minimun payments over the term of the loan, you will end up paying closer to $13 to $15,000 depending on term and minimum payment. By paying money toward that loan ON TOP OF your monthly payment, every dollar goes toward the principle without interest, hence that dollar saves you a rate of return equal to the interest rate. It SAVES you money, it doesnt MAKE you money. If you have debt, it makes sense to put all of your extra money into paying that off, but you will get richer faster by saving your money till you can purchase an item rather than borrowing the money and spending exponentially more for that item over the term of the loan, than the person who used cash.