snowball question
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snowball question
| Mon, 01-18-2010 - 4:05pm |
I just figured out all of my debt & am trying to decide what to pay off first. Here are my options:
1. 401K loan for about $950. I pay $160 per month on this & it has a 3.25% interest rate.
2. credit card for about $750. I pay $50 per month on this & it has a 14.99% interest rate.
I can't decide because the 401K loan has a much larger payment, so it would free up more money for debt each month but the credit card has a much larger interest rate so I want to get it paid off quickly.
Any suggestions would be greatly appreciated!

Personally I would put any extra snowballs toward the credit card. You will have the 401k paid off in about 6 months anyway and then you can put the $160 towards your credit card and have it paid off a couple of months later.
You are doing great.
I agree with the previous poster to flake toward the Credit card
I think it's going to be unanimous ... I agree with the other two posts that you should snowflake onto the credit card.
(And I agree that you're doing great!)
Kate
Kate
Is the 401K through your current employer? How secure is your job right now?
If I remember correctly if you lose your job while you still owe some of that 401K loan, it will then become a payout rather than a loan and just like if you took money out early from the 401K they take 20% off the top as a tax.