I have 16,000 on my 401k and owe 16,000 on my car loan. Is it meant to be?
2007-07-26 16:04:54 · 8 answers · asked by M Pagan 1 in Business & Finance ➔ Personal Finance
No! That is about the worst financial move you could ever make.
Sell the car. You can't afford it.
Plus 1) you probably wouldn't be allowed to do this until you quit your job and 2) you wouldn't wind up with the $16,000 that you need to pay off your car anyway. After taxes and penalties, you might get $10,000 if you are lucky.
2007-07-26 16:32:06 · answer #1 · answered by Lisa A 7 · 1⤊ 0⤋
No. I wouldn't touch that 401(k) unless it was an emergency. I mean if you need life-saving surgery, or your house burns down and you're homeless, or you get laid off and can't find a job and you're out of food...then use the 401(k) money. Otherwise, it's much smarter just to leave it there. In the long run it will help you more than simply buying you a car. Just pretend like the 401(k) money doesn't exist; Put it out of your head. When you're a 60 year old woman and that 401(k) has become a small fortune, you'll thank me!
2007-07-26 23:49:42 · answer #2 · answered by The Man In The Box 6 · 0⤊ 0⤋
No... There are few investment decisions you can make that would be worse than using using your 401K to pay your car off.
There is no "level" that this makes sense. You'll hate yourself 20 years from now (I did something similar... and I feel like the younger "me" stole from the older "me").
The cost in taxes and 10% penalty is also very high. Find another answer. Manage your money better. Don't ever think of this as a possibility again!
2007-07-26 23:42:54 · answer #3 · answered by Common Sense 7 · 1⤊ 0⤋
NO
the 401k can only be borrowed for a down payment on a home or for a hardship without paying penalties
paying off a car is NOt a hardship
keep the $ into the 401K or roll it into a Roth IRA
2007-07-26 23:09:53 · answer #4 · answered by Mopar Muscle Gal 7 · 2⤊ 0⤋
that would be the dumbest idea ever the whole idea of a 401k is to be able to retire when your around 60-65 keep your car loan and if you must take money out of your 401k only do it for a house loan
2007-07-26 23:52:37 · answer #5 · answered by Anonymous · 0⤊ 0⤋
depends on your rates on your car loan and the rate of your 401k. If your car loan has a higher rate then yes pay it now, if not... you might have to look for an other way to pay. 401k's are thier to secure you future. But your car, unless you maintain it LOTS, will not be there after 5-8 years.
You should look into other forms of repayment starting by frugile living and costing out unnecassary expenses. You will be surprised how much extra you'll be able to pay your car loan each month.
2007-07-26 23:11:12 · answer #6 · answered by prprincess 4 · 0⤊ 3⤋
NO,,,, You'll be hit with taxes like you wouldn't belive..
Go to your bank or credit union and apply for a loan to consolidate everything
2007-07-26 23:12:35 · answer #7 · answered by just me 5 · 1⤊ 0⤋
No.
2007-07-27 03:43:05 · answer #8 · answered by Anonymous · 0⤊ 1⤋