Weighing possible savings against costly risks
Should I Borrow from My 401k To Buy a Car?
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Is it wise to borrow from your 401k to purchase a new car? Sure, you're essentially borrowing your own money and the rate is likely lower than other financing, but there are also risks to consider. In this edition of Ask The Dollar Stretcher, editor Gary Foreman discusses the pros and cons of borrowing from your 401k so you can weigh the likely savings against the possible costly risks.
If you have a question for Ask The Dollar Stretcher, email it to Gary.
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter. Gary is also available for audio, video or print interviews. For more info see his media page.
Take the Next Step
- Use our calculator if you are thinking about borrowing from your 401(k) plan.
- Could you be hurting your retirement by taking a 401k loan now?
- Should you consider a 401k loan to repay a personal loan?
- The price of the car is only the beginning of negotiations. Avoid these 7 dealearship fees.
Share your thoughts about this article with the editor.