find mortgage and refinancing information Akron Ohio

Channel:

We would like to thank the local libraries, schools, and universities for recommending students to visit us when doing research on any of our information topics.
 Please check back frequently as new topics are added and current topics are updated daily.

 

Home Equity Loan - Still a Better Idea Than a 401(K) Loan


Anyone who borrows money is always looking for the cheapest source of funding. That makes sense; no one wants to pay more in interest than is absolutely necessary. And anyone with a sizeable amount of debt, such as credit card debt or a student loan, would be wise to consolidate their debt with a lower interest loan. One source of such a loan is a 401(K) account, which many consumers may have through their employer. Since the interest rate on Federal student loans rose on July 1, many students who missed that deadline may be wondering if consolidating through a 401(K) loan is a good alternative. Is it?

In a previous article, we have outlined several reasons why borrowing against a 401(K) account may be less favorable than using a home equity loan instead. The reasons include the fact that the interest on a 401(K) loan is not tax deductible, and that the borrower loses the ability for his or her investment to compound over time. If you have borrowed the money, it can't earn interest and the cost over twenty or thirty years could be dear. In addition to those, there are other reasons why a home equity loan would be a better source of consolidation funds.

The 401(K) loan is tempting. There is no credit check, the interest rate is usually favorable, and you are paying the interest back to yourself. The additional disadvantages are considerable, though. The money you borrow from your retirement account was money invested before taxes. The money you pay back is after-tax money, effectively increasing the amount that has to be paid back. Worse, should you lose your job, the 401(K) loan must be paid back immediately, in full. Should this not be possible, the loan is treated as a distribution, requiring the payment of a 10% penalty in addition to state and Federal taxes. With the job market still rather volatile, the additional risk of borrowing against a retirement account is substantial.

Borrowing against a tax-deferred retirement fund is rarely a good debt consolidation option. The tax disadvantages, the threat of penalties and immediate repayment and loss of compounding generally make such a loan a bad idea. Those with existing student loans should probably keep them; the interest is tax deductible and the rate is still lower than with most other consumer loans. For most anyone else, a home equity loan would be a better choice, offering deductible interest, fewer risks, and a fixed repayment schedule. Anyone considering a consolidation loan should consider all of these options carefully, as the cost of choosing poorly could be substantial.

©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation and credit counseling information and HomeEquityHelp.net, a site devoted to information on mortgages and home equity loans.


TODAYS NEWS BY OFFICEJAX FREE ADVERTISING AND AD EXCHANGE SOLUTIONSMORE RESOURCES updated Tue. September / 22 / 2020


































CardMatch™ | Bankrate  Bankrate.com



































































used office furnishings-supplies-equipment-desks-cubicles-service-counters for sale in Akron Ohio   Die cast model cars for sale in Akron Ohio  
used cars for sale in Akron Ohio   unfurnished homes for rent in Akron Ohio

Click here to
OfficeJax free ad space available here

Find used office equipment in Ohio at www.OfficeJax.Has.It

Find the best fleamarkets at www.FleaMarketWorld.Has.It

www.Akron.Has.It

Find electric powered vehicles at www.NoGas.Drives.It

Akron City directory

Free Automatic Link Exchange

Flea Market World

Find homes for rent
in Akron Ohio
www.homes4rent.has.it

iphone-4-less below wholesale prices

 

Place your AD here. Click here for more details.

Click above to place your AD here

[Back to Top]

Ohio RealEstate

auction news and listings for Akron, Ohio

Akron crafts and hobby news center

best home remedies and do it yourself tips

Akron currency trading

Akron Ohio pet news

Advertising and promotions Akron, Ohio

The Akron blogging news center

Akron Ohio web site design news

Akron Mortgaging and refinancing

Web site design tips

 

HOME | SITE MAP

© 2012 - 2020 All Rights Reserved
Increase pagerank with HitsSurfer

free page rank checker and seo evaluation tools 

first second ARM compare rates find the best rates current in your area lenders read reviews calculator adjustable rate loan home lenders brokers quotes florida houston gmac washington interest only 2nd software debt consolidation reverse senior equity texas maryland options lending bad credit  option one ameriquest chase first banks emc residential california miami dallas est branch marketing home company commercial yahoo online bad credit low credit no credit