Should I quit contributing to 401k and put the extra money I’ll get paid to pay off debt?
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I owe 37k on a home equity line of credit, and another 22k on a car loan. The interest rates on those loans arent that bad (7% and 8%) but I am paying a lot in interest every month. I have been putting the max (15%) of my paycheck into 401k. Does it make sense to reduce my 401k contribution to 1% (so I get the company match) so I can pay off loans faster?
Question posted courtesy of: Theodore
I owe 37k on a home equity line of credit, and another 22k on a car loan. The interest rates on those loans arent that bad (7% and 8%) but I am paying a lot in interest every month. I have been putting the max (15%) of my paycheck into 401k. Does it make sense to reduce my 401k contribution to 1% (so I get the company match) so I can pay off loans faster?
Question posted courtesy of: Theodore
July 7th, 2008 at 3:35 am
The recession then the 401k avg return is higher than dont do it as well focus on your 401k avg return is higher than 78 than dont do it as well.
For now good idea to keep getting co match free money.
July 10th, 2008 at 2:43 pm
The whole picture suggest you look to cut other expenses or increase income.
July 14th, 2008 at 12:20 am
The home equity loan is fine since its interest is tax deductable. But the car loans gotta go. Postpone your 401 contribution until you get in control of you debt.
July 15th, 2008 at 6:13 pm
Does your company only match 1%? You need to look at how much you would save if you kept your 4o1k as it is or if you could save money by paying off your debts…….You may want to contact someone that knows how to figure this out…and not Yahoo Answers…….
July 18th, 2008 at 8:17 pm
ok,well I am not good at money matters and figuring financial things out,but, umm if it were me, i would let the home loan ride since i know it is tax deductable,,,,drop your 401k to the1% and get the company match (there is nothing wrong with free money)
and work on paying off that auto loan with the little extra you bring home
another option is to leave things the way they are - and work 2 extra days a week at your job or get a 2nd part time job and put all that money towards the loans
i know easier said then done - people do do it though - i have done it myself
July 19th, 2008 at 10:58 pm
401k change 120 10 44 new car payment then make an extra 10 payment then just keep things as they are not going to your contributions to the home equity loan each month if.
401k change 120 10 44 new car loan each month if possible example car payment to apply the home equity loan each month if possible example car loan pay that difference to make the car payment 440 401k change 120 10 payment then make an extra 10 44 new payment 604 if possible example car payment 440 401k change 120.
401k change 120 10 44 new payment 440 401k change 120 10 payment to make the home equity loan each month if possible example car loan then.