I have $20k in savings, I owe $6,000 to my 401k loan, that’s the only loan I got. I am debt free otherwise except for my house. Should I use my savings to pay off? Since people are talking about unemployment and being fired, I wanted to make sure I have enough, 👩🏾‍💻... What should I do? I initially took the loan to add to my home equity when I sell my house for a new house then covid hit.

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Pay it off...you will have greater flexibility if laid off to wait for a better opportunity if completely debt free.

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Keep as liquid as possible til you get a better sense of your job stability. Then reasses.

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My thought is keep your savings liquid. You can pay it off if you get canned. Otherwise no harm no foul

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A loan from your 401K is a loan to yourself. So you’re paying interest back to yourself! So interest payments are going back in your own pocket and in case of a hardship it turns into a withdrawal without penalty (you’ll need to research what qualifies as a hardship).

So yeah, don’t pay it down. Keep cash liquid and ensure you have enough cushion to coast through this pandemic related downturn

smartfunny

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