KaMLuNg

iTrader: (5)

when i bought my first house a few years ago, i took a loan on my 401k to help me with the down payment and closing costs... 8 months after i closed on the house, i was approved for a equity line of credit... i was thinking about using the line to pay off the 401k loan...

with the market doing well, i am missing out on my full potential of my 401k investment opportunities since that portion is being used to repay the loan... interest i'm repaying on the 401k loan is 6.25% plus any opportunity costs on the investments vs the 5% on the l.o.c. any interest repayments on the loc are also tax deductible if i am not mistaken...

is my thinking right? or am i just shifting between left hand and right hand?

TIA

doopstr

I would go for the home equity loan. If you lose your job (or change jobs) you would need to pay back the 401k loan within 60 days of your termination or the tax man will come get you.

Will Y.

Repay the 401K NOW with the HELOC!

dallison

heloc. i don't know If any of that is tax deductible. And what Willy said.

LaCostaRacer

The home equity line is Tax Deductible and may not be available if you should lose your job and then desire pulling the trigger on this line. Pay off the 401K ASAP- 6.25% is a tad high in today's market.

Majofo

loan on 401k

I didn't know banks loan money on volatile equity.. what could go wrong?


:ib4govtbailout:

Anachostic

It's your money. If you default on the loan, it's considered a distribution and you get penalized with taxes and a taser.