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Generally a bad idea. I would use a consolidation service like BestEgg, UpStart. Rates should be low right now. I did this a few years back for under 2% fixed.
Ah then that would make it tough. 401K may be the best move then.
Should absolutely never do that, the penalties will outweigh getting rid of debt
I was told there are no penalties as it's a loan and is paid back
The penalty being the 3.25% interest
Take the 401k loan, it is a no brainer. The money gets repaid back to your account and in most plans you are permitted to continue to contribute as well so $10k technically gets replaced in a few months if you're maxing 401k.
Do not pay credit card interest, take the 401k loan and pay off the CCs. Also in uncertain economic times, 401ks can be extremely useful tool to protect against a downturn, rebalance assets, and clear debt. Investopedia has a really good piece on the benefits of 401k loans.
You don’t pay penalty for a 401k loan.
Bad bad option especially now when who knows what will happen to our jobs. Take a personal loan from a credit union, if you'll pay it back that quickly the interest rate won't matter.
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Sounds like you’re robbing Peter to pay Paul. I think there might be deeper issues here. Obviously I can’t pass immediate judgement about the credit card debt, nobody knows what situation you went through. But if it’s not a GOOD reason, you really need to tone down your spending.
Sort of a perfect storm, mom got sick last year before corona, I used CC to move back and help her, dad lost job but looks like he might be going back to work soon. Shower pipe burst in wall this week and there is gonna be about 2.5k of out of pocket expenses so I figured I'd bite the bullet, take from my 401k to help with the current costs and relieve some CC pressure
I'd do it if I was in your boat. But maybe try to pay it back in 1 year to avoid being penalized if you leave. I also don't think you can match that interest and there are no other costs.
You should check the terms of the loan, typically you don’t get the returns on the loan amount.
With the market down you may miss out on the upside.
If you borrow from the 401k, the interest you pay will go back to you. I don’t see it as such a bad idea.
If you want to leave the 401k intact you should consider a balance transfer card. You should be able to transfer over your entire balance and not pay interest for like 18 months (intro offer)
Don't take the loan, save up and pay it off. Gotta attack the cause of the problem, not the symptom.