snowball question

iVillage Member
Registered: 01-16-2010
snowball question
4
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!

First Debt BUSTED 2/12/10 Second Debt BUSTED 2/26/10 Third Debt BUSTED 3/19/10
iVillage Member
Registered: 08-02-1998
Mon, 01-18-2010 - 5:04pm

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.



iVillage Member
Registered: 12-23-2008
Tue, 01-19-2010 - 10:41pm

I agree with the previous poster to flake toward the Credit card

XoXo Shannon 2010 YTD Flake $349.94 2010 YTD Flake to Savings $193.33
iVillage Member
Registered: 08-24-2007
Wed, 01-20-2010 - 12:49am

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


empty purse

iVillage Member
Registered: 07-10-2003
Wed, 01-20-2010 - 1:05am

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.