Anyone took 401K loan ?

[GelakoduKri]

Pros cons.. fidelity 401 here 

[karna11]

I took , cons emundi. Nuvvu katte intrest nee account lo kee add avuthundhi.

[Tellugodu]

20 minutes ago, GelakoduKri said:

Pros cons.. fidelity 401 here 

I took paid back, took again , still hold small amount as loan. Taking 401k loan should be last option to consider. Because they give it to you by selling the portion of your portfolio (hence you might incur lose, if market is in red) and potential of those asset future gains. Atleast a good thing is you pay interest on loan to yourself, compared to taking the loan outside. Other thing to note is, if you leave the job/layed off, you need to pay back the loan amount within few weeks/months, if not loan is considered withdrawal , causing 10% penalty and tax bill on the remaining amount.

[GelakoduKri]

14 minutes ago, karna11 said:

I took , cons emundi. Nuvvu katte intrest nee account lo kee add avuthundhi.

Oh ok , so $50k tesukuna and paid off with 10k interest I will have $60 k back in my account with no penalities?  

[GelakoduKri]

Just now, Tellugodu said:

I took paid back, took again , still hold small amount as loan. Taking 401k loan should be last option to consider. Because they give it to you by selling the portion of your portfolio (hence you might incur lose, if market is in red) and potential of those asset future gains. Atleast a good thing is you paid interest on loan to yourself, compared to taking the loan outside. Other thing to note is, if you leave the job/layed off, you need to pay back the loan amount within few weeks/months, if not loan is considered withdrawal , causing 10% penalty and tax bill on the remaining amount.

Oh yaa I forgot about the growth and investment when its with them , Thanks bro 

[Tellugodu]

2 minutes ago, GelakoduKri said:

Oh yaa I forgot about the growth and investment when its with them , Thanks bro 

Also, check with fidelity, if you lose job/resign, what’s the buffer time you have to pay back the amount. If you can’t pay back, it’s considered withdrawal and incur 10% penalty and tax bill as well.

[Galactus]

don't , use that as a last resort, I would check other avenues

readup on the negatives and then make a decision

[CosthaBidda]

13 hours ago, GelakoduKri said:

Oh ok , so $50k tesukuna and paid off with 10k interest I will have $60 k back in my account with no penalities?  

Yes. But you are taking the money out of investment which would have otherwise become 70k

[karna11]

13 hours ago, GelakoduKri said:

Oh ok , so $50k tesukuna and paid off with 10k interest I will have $60 k back in my account with no penalities?  

Yes, penalties enti loan kattestee

[karna11]

21 minutes ago, CosthaBidda said:

Yes. But you are taking the money out of investment which would have otherwise become 70k

Might be 70k or 45k depends on market

[rmJU72]

Don’t use unless no other options, you will lose a lot more in potential appreciation.

[adavilo_baatasaari]

Yeah as mentioned above, the main issue is opportunity cost, missed growth potential esp. in these markets.

Also, if something happens with the job, you are required to pay the entire amount within 2 months or so.