Borrowing from 401k?

I just went to my Fidelity 401K web account and looked to see what the loan terms are. You can borrow up to 50% and the rate quoted for me was 9.25%

Even though you're paying the interest to yourself, it's still a bit steep in my opinion.

Also, the max is 50% or $50,000, whichever is smaller.
 
One more thing Options Poet/Risk Genius...Something about this site...people spend more time picking apart questions and highlighting selections as you do and copy/pasting them so you and others can harp all over them, to prove they are superior or smarter, or simply more clever than the poster. I notice it all the time. Is this American Idol, and you are in Simon Cowell's seat so you can be the boss, the tough guy, what have you? It's ridiculous..why not get back to trading? I plan to after this message.
 
The 401k loan is probably better than any other loan you could get. I understand what people are saying here but its your money. I took out a 5k loan 3 years from my 401k. I set it up to be payed back over three years. I think there is a limit of 50k or half of your balance. Nt for sure about his. Who cares what your gonna use the money for and I dont think anyone will even ask. Jim
 
I agree Steve, thats very high...higher than a Sallie Mae loan if you were to borrow to pay that back...which at one time I was considering. I actually found that getting a Prime Equity Line of credit was much cheaper for that.
 
Quote from stevegee58:



Even though you're paying the interest to yourself, it's still a bit steep in my opinion.
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I don't understand this statement.

Wouldn't you rather pay 10% on a 401k loan (paying interest to yourself) than borrow at 1% from a bank?
 
I'm sorry. I am a simple person. I borrow as little money as possible, from myself or anyone else. The semantics of borrowing from yourself, paying interest to yourself, etc is specious at best.

If you need money, work and save. Only spend money you have. That's all. This sounds very old fashioned, but it's kept me out of trouble.
 
Quote from pdwst33:

Options Poet, what in the world are you talking about? I just thanked you for your advice, sincerely. I guess since this is a forum, it has to be like every other forum out there in cyberspace where there has to be the tough guy who puts the smackdown on me and throws out the staple "this is a public forum what do you expect" rhetoric. Thanks again. Can we end this?
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My apologies. I'm trying to eliminate the last few unnatural things in my diet and it's killing me. I've just gone 3 days w/o coffee. So I'm a bit irritable. Remember my initial post and forget about the second one...

OP
 
Quote from Jaxon:

I don't understand this statement.

Wouldn't you rather pay 10% on a 401k loan (paying interest to yourself) than borrow at 1% from a bank?
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Agree. Who cares what % it is...it's moving the funds from your right pocket to your left pocket.
 
There are a few 401 brokers that allow this to happen. It is possible to take out multiple loans if your money is split into more than one qualifying plan.

Pioneer allows it, and a place called 401Brokers.com can set it up with multiple funds.

Assuming that you have set up your own 401k, taking the money out and paying it back is arguably a better strategy than simply leaving it in place.

Some of the comments about this are rather odd, one might expect trader's to have a better than average knowledge of finance.
 
True..but at my firm, and I suspect many others, finance is not a prerequisite. You'd be surprised how many Physics geniuses convince themselves that they are smarter than the market and end up imploding because of this hubris.
 
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