Couldn't find a specific spot on the forums to pose this thread, so hopefully this is sufficient.
I've been pondering taking out a loan against my 401k to pay off a vehicle loan. This seems like a good idea, so long as it stays disciplined and on track for re-payment as I understand there are significant costs to withdrawing from the 401k early.
If I understand correctly, the interest paid against a 401k loan comes back to me and does not go to a financial institution like a vehicle loan does. So, let's make the following assumptions (just throwing numbers out there):
Person buys a vehicle with a $20,000 loan through financial institution @ 3.9% APR. Monthly payments approximately $400 over 5 years.
At 2.5 years, loan is half paid down and over $1500 has gone to interest alone. Would it make sense to pay off the vehicle loan at $10,000, with a 3 year loan from 401k and interest rate of say 9.5%? The payments would be cheaper by about $100, and the 401k would gain about $1000 in the end (plus a cost avoidance of another $1500 going to the bank). I also understand that the $10k taken out as a loan would no longer be compounding in the 401k account, but it seems more sensible to pay myself interest in the long run rather than someone else?
Is there a good reason why not to take a 401k loan out? Just fielding for some answers here as I know there is a lot of knowledge on the forums.
I just figured that it is easy enough to just get a 3 bank so when the boat is not in use I can keep all 3 batteries charged. I have not bough a charger yet, maybe I will give it some more thought.
Edit: After thinking this over, with the size, weight, and heat output of the charger (as well as the cost) I think it makes sense to just
buy a 2 bank charger, I have a smaller charger i can use on the starting battery when the boat is sitting at home. Forgive me, for i am a retired engineer and I have to obsess over everything...
Congrats on the motor! I think you’ll like it.
I can’t say much on the charger location but I’ve seen them under the lid in back compartments and under center rod lockers. 160 degrees is more than I expected to hear.
Curious why you’re opting for a 3 bank charger with a 24V trolling motor. Unless you don’t feel you be running you big motor enough to keep that battery up as well?
I did buy an Minnkota Ulterra, thanks for the recommendations. I had a bunch of Cabela"s bucks saved up, which helped. Now i need to
get an onboard battery charger. Where do you guys mount these things in your boat? The manufacturer I am looking at {Noco genius)
says tht their 3-bank charger will run at 160 degrees, seems like a lot of heat in an enclosed compartment? Thanks for any input on this.
Wasn't terrible at a state park beach. Antelope island maybe. I wouldn't recommend it as a beach destination tho. Figured I was there, I'm getting in it.
Question
shnelson
Couldn't find a specific spot on the forums to pose this thread, so hopefully this is sufficient.
I've been pondering taking out a loan against my 401k to pay off a vehicle loan. This seems like a good idea, so long as it stays disciplined and on track for re-payment as I understand there are significant costs to withdrawing from the 401k early.
If I understand correctly, the interest paid against a 401k loan comes back to me and does not go to a financial institution like a vehicle loan does. So, let's make the following assumptions (just throwing numbers out there):
Person buys a vehicle with a $20,000 loan through financial institution @ 3.9% APR. Monthly payments approximately $400 over 5 years.
At 2.5 years, loan is half paid down and over $1500 has gone to interest alone. Would it make sense to pay off the vehicle loan at $10,000, with a 3 year loan from 401k and interest rate of say 9.5%? The payments would be cheaper by about $100, and the 401k would gain about $1000 in the end (plus a cost avoidance of another $1500 going to the bank). I also understand that the $10k taken out as a loan would no longer be compounding in the 401k account, but it seems more sensible to pay myself interest in the long run rather than someone else?
Is there a good reason why not to take a 401k loan out? Just fielding for some answers here as I know there is a lot of knowledge on the forums.
Now - Please, discuss
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