Borrow from 401K to payoff High int Car debt?
Newbie here,
I'm 48 and recently discharged from a chap. 7 (2-1/2 years now).
I bought a car 6 months ago to re-establish credit, $21,000 @ 14.4%.
My question is, should I BORROW from my 401K @ 7% to pay off the car @ 14.4%?
I can still contribute to the 401K with a 6% company match so I'll continue to save and by "borrowing", I do not have to pay IRS penalties so the 7% interest is what I'm charging myself.
Other than the car, I have zero debt but I'm trying to buy a house to get away from high apartment rental and get some tax relief (being single).
Is this prudent? Without the car note, I can afford a $115,000 home vs. a $65,000 home. By the way, my 401k is down 5% ytd.
Any help appreciated, as I seem to screwup when it comes to financial maters!
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