Borrowing Money From Your 401K-Only In Emergency’s

Saturday, December 15th, 2012

Sometimes you really just find yourself needing some money. Unexpected events such as a car breakdown can put a damper in your budget no matter how well you plan. In situations where you need money and need it quick, you can look into Borrowing money from your 401 K. Typically, when someone makes a 401k plan they do not expect to take any money out of it until it has grown and matured.

But life does not always go the way we hope and sometimes we need to delve into whatever source of money we can find, and sometimes that means taking money from our 401k. This has been thought of and that is why most 401k plans will actually have that type of loan available.

While taking a loan from your 401k can often make the difference between paying off a bill and falling further into debt, there are risks involved. If you do not handle the loan carefully you can not only run the risk of having to pay much more down the road, but you also run the risk of ruining your 401k.

Not all 401k plans are the same and so there is no universal method for getting money out of them. You need to check into the specific plan you have and find out what restrictions apply when Borrowing money from your 401 K. For most plans they will require that you borrow a minimum amount of money, usually anywhere from five hundred to a thousand dollars. They often will also have a maximum amount that you can borrow, usually around fifty thousand dollars. However, again, every plan is different so you will need to look and see whether this applies to you or not.

While taking money from your 401k plan may be a life saver, you may not be able to. While most plans are different, there are usually similarities in the form of requirements. Most plans will not let you borrow money from them unless you can meet the requirements they put in place. If you do not meet these requirements they will not lend you the money. So this is another reason for why you should look over your plan carefully and read the fine print so that you are properly educated.

Like most loans, a loan from your 401k will have a set repayment plan that you will have to adhere to. This can be anywhere from 5 to 15 years depending on what type of loan you took out and what type of plan you are on. The nice thing about Borrowing money from your 401 K is that, while you of course have to pay it back, the interest rates are fairly low and are actually put back into your 401k.

While taking a loan from your 401k is a good option, there are some additional fees that you may have to pay. Such as yearly fees or fees if you miss a payment. If your company has someone who manages 401k plans you should talk to them in case you have any questions.

Borrowing Money From Family-Think Twice

Friday, December 14th, 2012

Borrowing Money From Family can be a tricky business to say the least. When you borrow money from say, a bank, and you are unable to make your payments they will simply come after you for collateral. But what happens if you lend money to a family member and they are unable to pay you back? Are you going to go and take their car? Of course not. This is what makes lending money to family members so difficult.

If you are planning to lend money to any family members, you need to be prepared to say goodbye to that money forever. In most situations the odds of you being paid back are quite small, so you need to be aware of that. Since lending money to family members can be difficult, there are some tips to help make it easier.

1: Never lend out money that you need or want. If you yourself are on a tight budget you can not afford to go giving money to friends and family. It may sound harsh but you have to come first, if you go broke who is going to help you? As I stated above, any money you give you need to be prepared to never get back. So if you have no money to spare, then you can not give any away.

2: Assess the risk involved. When someone is Borrowing Money From Family they will of course tell you they will pay you back. But you need to assess the situation they are in to see if they can pay you back. Every circumstance is different, but if that family member has a history of not paying back loans or are reckless with their money, why would you lend it? Make sure they are able to pay you back, or at least make sure you know what you are getting into.

3: Never co-sign on loans. In certain situations family members may require a co-signer for a loan. The bank may not like their situation enough to give them a lone unless they get someone to co-sign for them, and so they may turn to you. However, it is advised you do not co-sign on loans. It puts you at risk for having to pay back the money should the other person default on their payments, money you may not have.

4: Give money freely as gifts. Seems a bit counter productive since so far I have been saying to be careful when people are Borrowing Money From Family. But that is something we forget as we age. When we are teenagers we often get money as gifts, but we really do not need it. When we grow up and actually need the money, nobody will give it to us.

Give your adult children and family members money for birthdays or holidays, if you can afford to. Not only can it help them out, but it also gives you some leverage should you ever be forced to deny them a loan. So it ultimately helps both you and your family members.

Borrowing Money From Cash In Advance Business

Thursday, December 13th, 2012

Sometimes you really just find yourself needing some money. Unexpected events such as a car breakdown can put a damper in your budget no matter how well you plan. In situations where you need money and need it quick, you can look into Borrowing money from your 401 K. Typically, when someone makes a 401k plan they do not expect to take any money out of it until it has grown and matured.

But life does not always go the way we hope and sometimes we need to delve into whatever source of money we can find, and sometimes that means taking money from our 401k. This has been thought of and that is why most 401k plans will actually have that type of loan available.

While taking a loan from your 401k can often make the difference between paying off a bill and falling further into debt, there are risks involved. If you do not handle the loan carefully you can not only run the risk of having to pay much more down the road, but you also run the risk of ruining your 401k.

Not all 401k plans are the same and so there is no universal method for getting money out of them. You need to check into the specific plan you have and find out what restrictions apply when Borrowing money from your 401 K. For most plans they will require that you borrow a minimum amount of money, usually anywhere from five hundred to a thousand dollars. They often will also have a maximum amount that you can borrow, usually around fifty thousand dollars. However, again, every plan is different so you will need to look and see whether this applies to you or not.

While taking money from your 401k plan may be a life saver, you may not be able to. While most plans are different, there are usually similarities in the form of requirements. Most plans will not let you borrow money from them unless you can meet the requirements they put in place. If you do not meet these requirements they will not lend you the money. So this is another reason for why you should look over your plan carefully and read the fine print so that you are properly educated.

Like most loans, a loan from your 401k will have a set repayment plan that you will have to adhere to. This can be anywhere from 5 to 15 years depending on what type of loan you took out and what type of plan you are on. The nice thing about Borrowing money from your 401 K is that, while you of course have to pay it back, the interest rates are fairly low and are actually put back into your 401k.

While taking a loan from your 401k is a good option, there are some additional fees that you may have to pay. Such as yearly fees or fees if you miss a payment. If your company has someone who manages 401k plans you should talk to them in case you have any questions.