Weighing possible savings against costly risks
Should I Borrow from My 401k To Buy a Car?
Ask The Dollar Stretcher
401k Loan Calculator
Borrow Your Own Money? Understanding 401k Loans
The 401k Layoff Trap
Buying a Cheap Reliable Used Car
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 and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter or visit Gary Foreman on Google+. 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.
Share your thoughts about this article with the editor.
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save and I could use help dealing with it! or No, debt is not a problem but I am trying to get ahead financially!
More Money Tips & Tools
- Could you be losing thousands of dollars a little at a time?
- Is your financial behavior rational? Or not?
- Avoiding the 'same as cash' trap
- Saving-money secrets of the rich and frugal
- 5 low-risk ways to earn higher interest now
- How to save money fast
- 7 IRA withdrawals that don't trigger a penalty
- This week's Readers' Tips