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Will it be wise to borrow from my 401(k) to repay debt?

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I am not able to make a decision. Will it be wise to borrow from my 401(k) to repay some of my debts?

It should be your last option actually. You should borrow from a 401K account only when you have no other options left. The best part of a 401(k) account is that the loan won't be reported to credit reporting agencies. However, there are a few cons of borrowing from a 401k account. For instance, big tax and penalties. You will lose money if the market grows up.

Sub: #1 posted on Tue, 05/21/2019 - 22:32

David Martin David Martin

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Even if you have to borrow, make sure you repay the amount within the mentioned time period so that you get the full benefit at retirement.

Sub: #2 posted on Wed, 05/22/2019 - 06:44

Mabelle Page Mabelle Page

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No, that should be your last option. If you take out a loan from your 401k, then you will get less time to save enough money for your retirement. Because, you have to repay the loan. It is better to settle debts instead of taking out loan from 401 k. You can also take out a consolidation loan to repay your debts.

Sub: #3 posted on Fri, 05/24/2019 - 06:34

sanderspatricia29 sanderspatricia29

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I would say a big NO!! Choose other options, may be taking out a low interest loan, or balance transfer if you have credit card debts.

Sub: #4 posted on Mon, 05/27/2019 - 00:53

Barbara Delinsky Barbara Delinsky

(Posts: 432 | Credits: )

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