Situation
- I am graduating an american university in one month, which I have been attending for the last 4 years.
- 4 years ago when I started the program the exchange rate was 0.92 USD/ CAD
- Today the exchange rate is 0.74 USD/CAD
- I am a Canadian citizen.
- I have accepted a job in California which will guarantee me a minimum of $12,000 USD up to $22,000 (before taxes) a month starting August. I am also offered an employer 401k match of 6%
- I have determined that I would like to allocate $2500 a month for living expenses
Current Debt
$250,000 CAD private Canadian loan @ 2.7% (prime variable)
- interest-only payments due starting graduation
$100,000 CAD gov. Canadian loan @ 2.7% (prime variable)
- Repayment begins January 2018
- max 10 year repayment period
$38,000 CAD gov. Canadian loan @ 5.2% interest (prime + 2.5%)
- Repayment begins July 2017
- max 15 year repayment period
- may hold off payment until Jan 2018 (interest still accrues)
$39,000 USD private American loan @ 5% (fixed)
- repayment begins February 2018
- must be payed in 10 years
- $100 minimum monthly payment
Current Savings
- $10,000 CAD Canadian savings account (7% growth)
- $20,000 CAD - Can checking account
- $10,000 USD - US Checking
Question
- I am a bit lost in designing an optimal repayment strategy.
- Since the exchange rate is currently so favorable for the US dollar, it makes me think that I should take advantage of it and repay my Canadian loans as soon as possible. In an ideal world, I would accept a new American loan to pay off the Canadian loans immediately but due to my non-immigrant status in the US, it would be difficult to find a loan under 10% interest rate for me (the US loan I have is through my university). Perhaps after I start earning a US income this could change.
- Due to the low-interest rates, I would have liked to allocate maximum funds towards retirement savings accounts and make minimum payments towards my loans but this exchange rate is challenging this idea for me.
- I am wondering if anyone has an opinion on what exchange rate I should adapt my repayment strategy. Does anyone have any recommendations for my repayment strategy?
Thank you for taking the time to read through this.
Submitted May 24, 2017 at 05:56PM by Financialadviceplea http://ift.tt/2rB5eYJ
