Some 'Insensitive' Advice on 401(k) Loans

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Debt of AL 12:11AM August 31, 2009

I think the idea is good but you need to modify it a little.

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soundtracks of AL 5:09AM July 17, 2009

I borrowed 22,000 on my 401k over 4 years ago and still owe over 6,600.
I am thinking of paying off the entire loan.
I have been giving several different opinions.
a. pay off the loan because your are losing money.
b. continue paying off the loan monthly because you are paying yourself back with interest.
What would you advise?

Steve Minshew of TX 1:07PM May 12, 2009

i recently defaulted on my 401k loan which was around $10,000.if i pay taxes and a penalty on this amount it still is a lot less than paying back the full amount of $10,000.sinci i did it in march of 09 i will not owe the taxes and penalty until the 2010 tax year.if i put back the same amount they were taking out of my paycheck each weel(in this case $55.00 a week) then by the time the taxes and penalties were due i would have saved enough to take care of the matter and still be ahead of the game because ultimately i don't have to pay the full amount of the loan back.

william of PA 4:06PM April 10, 2009

Finding objective advice when it comes to 401k plans can be frustrating. Perhaps we can help: www.401kAdvisory.com. We offer personal advice -- via email -- from Certified Financial Planners.

401k Advisory of LA 3:12PM February 07, 2009

I would agree that taking a 401k loan out to go on vacation is foolish.
What if it was to pay off credit card(s) balances & create a CD ladder?

mark of OH 1:19PM February 03, 2009

Except for the "losing your job" scenario, I believe taking a loan out of your 401(k) is not a bad idea, especially if your company will take the money out of your paycheck for the loan payment every month. So here's my complex figuring on why this makes sense:
I lost 41% of my 401(k) last year. That's a LOSS.
If I take a loan out of my 401(k), I pay myself back WITH INTEREST. That's a GAIN.
Questions?

crc of VA 12:20PM February 03, 2009

if you look at how much $ we have all lost due to the stocks falling it would have been wise to take away say$20000 from these so called financial advisors, & pay yourself back plus interest, so that they dont loose it all for us. All these so called financial experts NEVER calculated the possibility that they would be LOSING MONEY with OUR PRINCIPLE, SO if we were to have taken this $ away from them before they lost it, we would have more of our principle now! plus be paying it back to us with int. REMEMBER, the people telling us not to do this want us to keep our $ with them in the stock market, so that they could invest it wisely!! thats how they make their living.

Phil Panno of OH 5:28PM January 31, 2009