I was hoping for some advice on the best way to approach this.
Due to not fully understanding what I was doing when I was younger, I signed an auto loan at 15.99% interest. My payoff amount is now $7268.37.
I'm currently paying $436 a month for this loan. The maturity date is 22 months.
I have the option to borrow against my 401k. I am able to withdraw $5500 at 5.75% apr, with repayments being paid back bi weekly directly from my paycheck. I have the option to make the choice for how long repayment would take, and I'm considering setting it for 2 years, or 50 payments for $116.32 a check. That saves me about 200 a month which I could REALLY use.
As for the left over 1768, I would work on paying that down over the next two or three months, but figured if I were make a large payment of the $5500, that would pay down quite a bit on the principal balance, helping lower the amount of daily interest the loan is accumulating.
I would be able to make more than than the 230 each month, which would allow me to pay it off, but if I understand correctly, this would actually save me money due to the differences in the APR.
I do not have the option for refinancing, or paying the vehicle off with a personal loan, credit card, or anything like that. This is about my only option that I have to help free up a little space financially each month.
Thanks in advance.
Submitted February 29, 2020 at 07:44PM by jjlentini93 https://ift.tt/2Vwx4UC
