2006-09-03 07:33:34 · 7 answers · asked by ken p 1 in Business & Finance ➔ Credit
FYI.. for those that don't know this, there are plans where you can take an actual LOAN against your 401k .. this is not a withdrawal and not subject to penalties. The payments are typically taken out of your payroll check for a length of time from 2 years to 5 years and the interest goes back to you. Bear in mind, your paychecks will now be much smaller. Sadly, the only way I would even begin to think that this was a decent idea is if you cut up the card and closed the account. Then call the CC company and negotiate the total amount down to $6,000 as a 1 time payment and see if they'll go for it. It's worth a try. If they agree to this, it would benefit you to take that Loan out. I figured if you even stretched it out to 5 years, at 23% you'd have to send them $366 a month to pay that amount off.
2006-09-03 11:07:16 · answer #1 · answered by CactusFlower 4 · 0⤊ 0⤋
I agree w/ albert. It depends if you are done with debt or not. If you are just using this as a way to have 6K more to spend, it is a horrible idea. If it truly will be used to pay the debt and you will not spend more, than 7% is a hell of a lot better than 23%. Maybe instead you move the debt to a new card with 0 introductory. If, that is, you can pay off the debt in 6 months.
2006-09-03 08:38:49 · answer #2 · answered by Byron W 3 · 0⤊ 0⤋
Only if you are serious about getting out of debt, meaning take the loan put it towards the money and NO NEW DEBT! If you're just going to do it to free up credit don't do it. And make sure you pay down the debr, pay back the 401K and max out employer matched contributions every year.
2006-09-03 12:32:05 · answer #3 · answered by Anonymous · 0⤊ 0⤋
You're still going to owe $7K. Are you paying any penalties from borrowing from your 401K? Can you not get a secured bank loan at a lower interest and pay the whole thing off? NOt only wuld you be taking money away from your future, you would still owe a sizeable amount. I'd say no, on don't borrow from your 401K.
2006-09-03 07:37:44 · answer #4 · answered by pamela_d_99 5 · 0⤊ 0⤋
That depends on how good your credit is. If you had good credit 700 of higher, I would just get 2 credit cards who will roll your other account into a 0% for 12 months. After that, do not close your $13,000 account, since it will lower your credit score. Just keep it and only charge their minimum amount per year and pay it in full.
The reason is part of your credit score is made up of available credit, and if you close it you lose out on $13,000 available.
2006-09-03 09:20:17 · answer #5 · answered by Richard B 3 · 0⤊ 0⤋
Not unless you are going to close the credit card account. You might go deeper in debt.
2006-09-03 07:55:43 · answer #6 · answered by Albert F 5 · 0⤊ 0⤋
Go watch Suze Orman
2006-09-03 07:40:32 · answer #7 · answered by I cant think of one 2 · 0⤊ 0⤋