Many people these days have some type of 401K through their job, some others may have one voluntarily. When cash is tight and you need money, for many Floridians, one of the first thoughts they have is to borrow from their 401K. Though it is true that you will get the money you need, there are some things that you need to keep in mind before doing this.
Some people think it is a good idea to borrow from your 401K. After all, you are borrowing from, and paying interest to, yourself. However, this isn’t as good as it sounds. There are fees associated with borrowing from your 401K, most notably an administration fee of some kind. This can be several hundred dollars and will limit the amount you can take out.
Another thing that you should be aware of is your payment history. For example, if you know that you have problems with paying loans back, this may not be a great option for you. If you miss just one payment, you will put this loan into default and owe taxes on it. On top of that, if you take this loan out when you are under the age of 59.5, you will be charged a 10% fee. You should also be aware, if you lose your job for some reason, why you are paying the loan off, you will owe the balance in 60 days.
As you can see, a loan from your 401K may not be the best option for everyone. Luckily there are other things that you can do in order to get the money you need at low rates. One of these is to choose a car title loan. You will find that a car title loan is very easy to get, you can get your money in a matter of hours and you will easily be able to pay it off in the short term.
If you are interested in learning more about a car title loan, you will need to contact a local company like Embassy Loans. Contact them today and see how this type of loan can be a better option than borrowing from your 401K.