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Old 12.08.2008, 09:09
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Student Loan question for all the Finance whizkids

I am interested in sending some money back to the US in order to pay off student loans and also be able to put some money on the side for savings. I recently moved out of an expensive apartment to share one with friends, which is saving me about 1000 francs per month. (aces!) I figure I could afford to send 1000 francs for the student loans and 600 to save/invest. I currently pay about $290 a month on my loans and it is a 10 year loan. (at around 4.2% interest)

The problem is that almost since the day I moved in, the US dollar has really firmed up and the Swiss franc has lost about 8% against the dollar and it doesnt seem to be slowing down which is starting to make me rethink my plans....i.e if am paying 4% on interest is is still worth it to make this commitment to pay it off faster especially since my money is worth 8% less now + exchange fees and etc.....

Anyone think the dollar will continue its rise?
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Old 13.08.2008, 10:05
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Re: Student Loan question for all the Finance whizkids

If any of us actually knew which way the currency was going to go we would already be living on a beach somewhere! Personally I hate having debt, even at 4.2%. Mainly because what I pay back in interest is money I cannot invest myself. While the markets may return 10% long term, you need to be invested long term and if you are paying off debt you cannot guarentee that you will be able to stay invested (eg. job loss). I would either pay it off asap (<2yrs based on your info), or try to switch to a CHF load to pay it back since CH loans are even lower %, then you don't have the complexity of currency risk in your debt portfolio...
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Old 13.08.2008, 10:23
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Re: Student Loan question for all the Finance whizkids

Today's rate is 1CHF = 0.92USD/ 1USD = 1.087CHF. (www.xe.com)

While this may not be so good as a few months ago, in the longer term this is still a very low dollar and IMO worth taking advantage of to pay off a loan in $...
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