Essentially: I have roughly $25k left on a debt consolidation loan (balance is a little lower, payoff amount a little higher per last statement). Interest is fairly high and I'm paying roughly $900 a month for it, with resolution expected in May 2024 if all payments are as scheduled. There is no early payoff penalty.
I can do a 401k loan from my current employer, who I have no intentions of leaving, for pretty close to that full amount needed - less than $1k, which I can scrounge up for. Payback would be an after tax payroll deduction for 5 years, so roughly $416/month - almost $500 less.
I also presume my credit score would go up.
Potential pitfalls: Unrealized gains on some market activity. If I leave my work before the payments are up, the full amount is due immediately.
Potential gain: Credit score up, personal debt on high interest gone, $400ish a month vs $900ish a month - extra $500ish to do as needed as life happens. Would probably be great to pay a little extra back on that 401k loan if possible.
Is that a good grasp of the situation or is there anything I am overlooking/not considering?
Submitted June 07, 2021 at 09:22AM by pecker0nipapercut https://ift.tt/3zasqNG
