spanky

i'm going to take out a 401k loan to pay off some debt and pay off my truck because of the insane interest on it but i have a question

would it be better to get a 40 mo loan @ 204/2wk or get a 48 mo loan @ 172/2wk and pay 200 instead of 172?

DarkStarr

is the interest the same on both? I'd prob shoot for the 48mo one and make the extra payments. It would look better and youre still going to pay it off in relatively the same time as the 40mo.

But I'm no expert.

spanky

Yes, same interest rate.

spanky

if my calculations are correct, an extra $28 per payment times 96 payments (bi-monthly) comes to 2688. divided by the minimum 172 payment comes to 15.6 payments or 7.8 months.

Unless I'm missing something, which I probably am, that is pretty much exactly the same as the 40 month option.

DarkStarr

well, it's only $8/mo difference if you're going to pay the extra on the 48mo..

Dweezel

If you don't need the lower payment than go for the 40 month option. No need to make the loan more complex than it needs to be. Are there prepayment penalties?

spanky

no

whats great is that since it's a 401k loan, payments are pre-tax. combined with a 4.25% interest rate makes it hard to beat. especially since the interest is going back to me.

Draconius

I hate ygat you have to pay back on your 401k or 403b plans. It's your damn money!

I would love to take my 403b and pay off almost 3 loans and boost my credit score.

spanky

you can take out but you have to pay taxes on it. with the loan, it says in your account and you are essentially paying yourself back with interest. not a bad deal, really.

DakarM

you do know not all of the interest goes back to you right? but still it's a lot smaller amount than what you would normally pay for a loan.