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Hello,
I need to payoff a loan of $18K, It was with BofA and somehow BofA
sold it to a Mortgage company and they are asking me to either pay it
off or the interest rate will go up, my options are as follows:
Get a personal loan from my bank (chase) and pay this off and make
monthly payments to chase
Borrough money from my 401K and make monthly payment to 401k account
Other ideas are welocome.
Thanks
Abid
a...@a...net wrote:
> Hello,
>
> I need to payoff a loan of $18K, It was with BofA and somehow BofA
> sold it to a Mortgage company and they are asking me to either pay it
> off or the interest rate will go up, my options are as follows:
>
> Get a personal loan from my bank (chase) and pay this off and make
> monthly payments to chase
>
> Borrough money from my 401K and make monthly payment to 401k account
Not enough details. What kind of loan was the BOA? I mean, what were the
terms? If it was a fixed loan, a set a mount with monthly payments, the
new owner of the loan has to honor the original terms. If it was a
variable rate, there are still terms that must be honored, often, you
have a choice to not 'accept' the new terms, and pay off at the original
offer. If you did the 401(k) loan (not recommending just yet), how much
can you afford top pay back each month? That will be part of any advice
you get here.
JOE
On Jun 21, 10:01 am, joetaxpayer <j...@n...com> wrote:
> a...@a...net wrote:
> > Hello,
>
> > I need to payoff a loan of $18K, It was with BofA and somehow BofA
> > sold it to a Mortgage company and they are asking me to either pay it
> > off or the interest rate will go up, my options are as follows:
>
> > Get a personal loan from my bank (chase) and pay this off and make
> > monthly payments to chase
>
> > Borrough money from my 401K and make monthly payment to 401k account
>
> Not enough details. What kind of loan was the BOA? I mean, what were the
> terms? If it was a fixed loan, a set a mount with monthly payments, the
> new owner of the loan has to honor the original terms. If it was a
> variable rate, there are still terms that must be honored, often, you
> have a choice to not 'accept' the new terms, and pay off at the original
> offer. If you did the 401(k) loan (not recommending just yet), how much
> can you afford top pay back each month? That will be part of any advice
> you get here.
> JOE
Also, what are the terms of the 401(k) loan? Can you continue to make
monthly payments if you were to become "seperated from service" or is
it the loan due in full at that point?
If the former, do you have to leave your 401(k) with the company to
make monthly payments (usually the case)? If the latter, what is the
likelyhood you could payoff the loan? Your age and marginal tax
bracket would also help us solidify some potential consequences.
Do you own a home (are HELOCs and HELs available)? What kind of loan
terms do you expect to get from Chase?
On Jun 21, 10:39 am, kastnna <k...@a...org> wrote:
> On Jun 21, 10:01 am, joetaxpayer <j...@n...com> wrote:
>
>
>
>
>
> > a...@a...net wrote:
> > > Hello,
>
> > > I need to payoff a loan of $18K, It was with BofA and somehow BofA
> > > sold it to a Mortgage company and they are asking me to either pay it
> > > off or the interest rate will go up, my options are as follows:
>
> > > Get a personal loan from my bank (chase) and pay this off and make
> > > monthly payments to chase
>
> > > Borrough money from my 401K and make monthly payment to 401k account
>
> > Not enough details. What kind of loan was the BOA? I mean, what were the
> > terms? If it was a fixed loan, a set a mount with monthly payments, the
> > new owner of the loan has to honor the original terms. If it was a
> > variable rate, there are still terms that must be honored, often, you
> > have a choice to not 'accept' the new terms, and pay off at the original
> > offer. If you did the 401(k) loan (not recommending just yet), how much
> > can you afford top pay back each month? That will be part of any advice
> > you get here.
> > JOE
>
> Also, what are the terms of the 401(k) loan? Can you continue to make
> monthly payments if you were to become "seperated from service" or is
> it the loan due in full at that point?
>
> If the former, do you have to leave your 401(k) with the company to
> make monthly payments (usually the case)? If the latter, what is the
> likelyhood you could payoff the loan? Your age and marginal tax
> bracket would also help us solidify some potential consequences.
>
> Do you own a home (are HELOCs and HELs available)? What kind of loan
> terms do you expect to get from Chase?- Hide quoted text -
>
> - Show quoted text -
Thanks Joe and Kastnna,
Sorry took me a day to gather info. It was a credit line from BofA on
a 12% interest rate, I was paying $259.00 per month and I can still
afford to pay that or little more.
I checked with my 401K plan advisor, I can borrough 18K on 9.25% bi-
weekly payment through payroll which comes out as $173.00 p/p.chk, if
I sperated from the company I have 90 days to pay it off, Chase offer
on personal loan is 13%, I am 45 and own a home, you think HEL is the
way to go, I also have a car paid off worth around $25k, should I re-
finance my vehicle and go that route. Somehow I am keep thinking about
401K loan and pay back the interset to myself rather than to others, I
guess wishful thinking.
Abid
======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a
FEW lines to add context, the previous post is deleted.
a...@a...net writes:
> Sorry took me a day to gather info. It was a credit line from BofA on
> a 12% interest rate, I was paying $259.00 per month and I can still
> afford to pay that or little more.
>
> I checked with my 401K plan advisor, I can borrough 18K on 9.25% bi-
> weekly payment through payroll which comes out as $173.00 p/p.chk, if
> I sperated from the company I have 90 days to pay it off, Chase offer
> on personal loan is 13%, I am 45 and own a home, you think HEL is the
> way to go, I also have a car paid off worth around $25k, should I re-
> finance my vehicle and go that route. Somehow I am keep thinking about
> 401K loan and pay back the interset to myself rather than to others, I
> guess wishful thinking.
It sounds like you've been doing too much wishful thinking already, and
living way beyond your means.
Sell the expensive car and use the proceeds to pay off your debt. You
should have enough leftover to buy yourself a less expensive used car
with cash, or try walking, riding a bike, or taking public
transportation for a while, until you get out of the hole you've dug for
yourself.
If you must borrow money, a home equity loan is usually the way to go,
because of the preferred tax treatment on the interest. Borrowing
from your 401(k) plan is robbing yourself of your retirement savings,
and taking out a loan on a depreciating asset like a car is just a
Dumb Idea generally.
-Sandra the cynic
On Fri, 22 Jun 2007 10:56:49 -0500, Sandra Loosemore
<s...@f...com> wrote:
>If you must borrow money, a home equity loan is usually the way to go,
>because of the preferred tax treatment on the interest.
Perhaps. While the equity loan may be partially deductible (I say
"partially" since the amount of interest up to the Standard Deduction
does not help), equity loan interest on proceeds not spent on the home
is not deductible for the Alternative Minimum Tax. Oops.
-HW "Skip" Weldon
Columbia, SC
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