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Update on my car situation

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idkam posted 7/25/2014 12:11 PM

Well went to the dealership yesterday: i'm $14.000 upside down now.....thanks asshat......sooo the sales person told me i need to find a new car with a big rebate....another option is to save $5000 and try to get it refinanced and put the $5000 towards the loan.....so i had to do something i dreaded doing which was borrow money from my 401K... over 5 yr term 60 month period $47 comes out of each pay check ....

What do you all think about this??? I really hated to do this but i felt like i have no other options....i cannot afford to pay $583 plus ins.....

I pray that my credit union will refinance it for me.....

Faithful w/Love posted 7/25/2014 14:38 PM

Wow, I am sorry you had to do that. I had to give my car back because I couldn't afford due to the separation. It sucks I know. I had to get a older car... but it gets me where I need to be for now.

But, I know what you mean having no other options.

idkam posted 7/25/2014 16:46 PM

Thanks faith...

Giving the. Car bavk was one option but i do not want to ruin my credit.....

I pray the bank will refinance it..

gahurts posted 7/25/2014 16:50 PM

I think borrowing from your 401 is the best kind of loan you can get. You don't decrease your assets in the long run because you are paying it back. Usually the interest rate is lower than what you can get from a bank or credit union. You are borrowing the money from yourself and you pay interest to yourself so in a way you are making money off of yourself. If you need a loan and a 401K loan is available then I say this is the best way to go.

Of course everything in moderation and typically most plans have a limit to how much you can borrow so that you don't get carried away

HFSSC posted 7/25/2014 16:54 PM

I turned in the car I LOVED after our 2nd S because I could not afford the payments. They sold it at auction and billed us the difference. I was able to work out a payment plan for the balance and the company has truly been wonderful to work with. No interest and right now we are paying $50 a month to pay it off.

idkam posted 7/29/2014 12:15 PM

Thanks my SI friends....

The credit union termed me down for refinancing, wanted to give me a 10% interest rate..my credit score is 623 and its too low...

I will try my bank next..

Whalers11 posted 7/29/2014 13:32 PM

Most people will tell you borrowing from a 401k is a bad idea, because in the long run, you are probably losing out on the compounded interest you could be earning over time.

But honestly, if you are in a dire financial position, I still think it's better to borrow from yourself than getting a loan elsewhere...

The bigger concern, for me, is if you lose your job, you will be required to repay the full loan almost immediately. If you can't, you will have to deal with paying taxes/ penalties.

So I understand why people think 401k loans are a bad idea, but if you are experiencing a hardship, do what you have to do!

idkam posted 7/29/2014 14:45 PM

Well my bank termed me down..

I got an appt at CarMax this friday....i asked the finance co where my loan if i pay &5000 towards my loan would it lower my payments and she said it'll only lower the how long i would pay it..

norabird posted 7/29/2014 15:10 PM

Get rid of this car--your credit will recover. You can buy a used one for far less than a new one.

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