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Taking loan from 401K - yes or no?

bluegrl24ny Posted:

Taking loan from 401K - yes or no?

Kriss2c Posted:

Re: Taking loan from 401K - yes or no?

Not sure if you would be able to take the loan out from your 401K for this reason - not sure.

I do know that what you will pay in penalty fees would not be worth you taking the $$ out at all.

I would transfer to a lower rate and really concentrate on paying it down. I had more than you on 2 of my credit cards and was able to get them both to 0 balances in just over a year. I made huge monthly payments until the balances were diminished. It requires some budgeting and discipline but it can be done.

good luck.
sarahthegreat Posted:

Re: Taking loan from 401K - yes or no?

I am no financial expert, but I say do not take a lona aganist your 401k. I understand what you are trying to do, but that is your retirement money and you really dont want to start borrowing aganist that money. I know that it is technically 'your' money and you should be able to use it, but where i work, they strongly advise aganist that, they say only as a last resort and if it is a total emergency. hope this helps and good luck

luvsbob4603 Posted:

Re: Taking loan from 401K - yes or no?

No! I wouldn't borrow against it because than later on you will have to pay them back.

jozieb0925 Posted:

Re: Taking loan from 401K - yes or no?

There are a lot of 0% offers out there on credit cards. TRansfer your money to one of those..they charge no interest.. I did it with my wedding debt and tuition. The 0% is up in 2006. So from now until than, I am going to try and get my debt all paid off.

Good luck.

ETA: Just Fm'd you.
bxgell2 Posted:

Re: Taking loan from 401K - yes or no?

I did this a long time ago when I was working somewhere else. I took a loan against my 401k, I think about $3k or $4k, to pay off a very high interest credit card. The terms of the loan required that I make a monthly payment for a year to pay it back, plus interest. It was great because the money was taken from my paycheck before I received it, and I timed it just right that I did it just when I was getting a raise, so I didn't take a significant hit in my paycheck. And, the interest was paid back into my 401k account, so I was really just paying myself back...

NPbride Posted:

Re: Taking loan from 401K - yes or no?

Since you'd only be able to take out $1700 I wouldn't bother. I think it would be best just to transfer to a 0% card. Good luck!

spazybride04 Posted:

Re: Taking loan from 401K - yes or no?

I was in the same sich about 2 years ago.. I borrowed about the same from my 401K (but that was the balance on the cc) and I thought it was the greatest thing I could've done. You're paying back yourself... only bad parts are #1.. you are stuck to the monthly payments and in order to pay it off, you'd have to pay in full.. once you lock the rate it has to stay like that for the remainder of the loan.
and #2... if you leave your job (i knew i wasn't going anywhere), you have to pay it all back right away (you might just want to ask your HR rep to confirm that because I'm not 100% certain)
but... like the other post said.. you can have it taken out of your paycheck.. out of sight out of mind... at least for me.. LOL

Good Luck!
bluegrl24ny Posted:

Re: Taking loan from 401K - yes or no?

bluegrl24ny Posted:

Re: Taking loan from 401K - yes or no?

Posted by jozieb0925

There are a lot of 0% offers out there on credit cards. TRansfer your money to one of those..they charge no interest.. I did it with my wedding debt and tuition. The 0% is up in 2006. So from now until than, I am going to try and get my debt all paid off.

Good luck.


to those of you who were able to do this, can you give please give me some pointers on which credit cards extend this offer even if you already have a veryhigh balance on your cards???? I received a 0% no APR offer from Discover and when I applied for it - they denied me!! So I don't understand know how I can do this if I've already been denied and now I'm worried about how that looks for my credit rating.... Thanks!!
Kriss2c Posted:

Re: Taking loan from 401K - yes or no?

well I don't know who you got denied by, if you want to discuss in more detail feel free to FM me. But before you open up any new cards, why not try to work with your current cards. Call them up and see if they can give you a lower rate. It worked for me for a couple of my cards.
jozieb0925 Posted:

Re: Taking loan from 401K - yes or no?

Bluegrl - I leave work at 4:30..I will try an fm you tonight or tomorrow a.m. with more information..
Mandy77 Posted:

Re: Taking loan from 401K - yes or no?

FM

dm24angel Posted:

Re: Taking loan from 401K - yes or no?

IMO- to pay off CC debt it IS a good idea. Its never good to take a 401 K loan because your losing money in the end, but CC debt is a big thing and if your under 35( or so) , then you should worry more about the current debt as you have a lot of time in the future to pay more towards the 401 K.

Also when advisors say not to take loans from 401 K's, they usually are talking BIG loans, such as $10,000 or more. I recently took $2000 from mine, and asked my 401 K company for advise and I was told that they usually warn against a loan when its for much much more then what I was talking about ( hey the $2000 was a LOT to me...but not to them)

Good luck.
september2004 Posted:

Re: Taking loan from 401K - yes or no?

what does

'Conversion to coupon repayment is available should you terminate employment.'

mean?
bluegrl24ny Posted:

Re: Taking loan from 401K - yes or no?

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