Let us assume that the currency-protected loan is less than 4%. Now, borrow money using this currency-protected loan and invest it into US bonds. You will have a risk-free profit!
Let us now assume that the currency-protected loan is more than 4%. You do the inverse. You borrow USD money at a rate of 4%, invest it into EUR bonds at a rate of 1%, and act as ...
Max out your 401k
Having paid off this debt, now, max out that 401k. Not to the match; all the way. And get $20k in there for 2019 still! Because you don't want to eat up your 2020 contrib limits, so you can max it out in 2020 also.
I gather your low expenses are because you still live with your parents, which I imagine puts you on your 20s. This is ...
Another aspect worth mentioning: taxes.
Without taxes, paying off a loan at 6.8% is equivalent to earning 6.8% on a guaranteed investment.
However, earnings on an investment are taxable in most jurisdictions, but there is no tax due on the money you save by paying off a loan early.
If you're in the 20% marginal tax bracket, then saving 6.8% on a loan is ...
Pay them off now.
Paying off your loans is a guaranteed 6.8% return on your money. Consider it this way: would you take out another loan at that rate now so you could do something else with the money? I highly doubt it. The stock market has returned more than that historically on average, but not enough more and not reliably enough to make it worth ...
Reasons to not close your debt:
You can make more than 6.8% return somewhere else
You fear an unexpected expense in which you need temporary cash
Reasons to close your debt:
Even if you believe you can make more than 6.8%, nothing is guaranteed and you end up losing money on interest.
Debt is leverage. That extra $20k is not yours. If you lose it, the ...
Short answer: Pay off all the loan. Always check out the possible early loan payoff penalty and find a way around it.
Assume you are living in the USA, the saving account is paying you less than 1% interest for the cash inside the bank account.
Unless the loan is part of your business that gives you a monthly positive cash flow against the interest paid, ...
To put this into perspective, you are paying ~$1500 interest annually (gradually decreasing), or $132 monthly.
All the while, you have money sitting in your bank account doing seemingly nothing.
Looks to me you're off to a good start being debt-free at this point, while still keeping a healthy chunk of cash in your bank account.
It is not clear to me that you are thinking about this formula correctly.
The uncovered interest rate parity formula is used to help judge if forward exchange rates fairly reflect interest rate differentials.
For example, suppose we wish to look at EURUSD one month forward. We begin by looking up the spot fx rate. We would then consult the interest rate ...
With the following variables
s = loan amount
r = monthly loan rate
n = number of months
d = monthly payment
the standard loan equation is
s = 900000
n = 12
d = 84000
(d - d (r + 1)^-n)/r - s = 0
Note, this cannot be manipulated to an expression for r.
You can use a solver in your program. E.g. Math.NET Root finding
RealRoots.OfFunction(r => (d - d *...