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Should I take out money from my 401K to pay off my timeshare?
I have $20,000+ in my 401K account. I bought a timeshare with an ex-boyfriend five years ago.
Monthly payment: $168
Interest: 17%
Will be paid-off in 10 years. I have five more years to go.
Current balance: $6, 235.64 (amount left that I need to pay)
I've been paying the minimum every year for five years. I don't know why, but I just realized that I should try to pay this timeshare off as quickly as possible. Using Karl's Mortgage Calculator, my total interest would be 50.25% after everything is paid off!!
Should I take out the money from my 401K plan? The interest rate is 5% and I can try to pay it off within one-two years. There's no penalty if I pay it off early.
- Roberto Guzmán February 19, 2018, 2:03 pm
In these days, any timeshare company charges any penalties for payments in advance, however, it is recommendable, when you by a timeshare to get it financed by the same timeshare company so you can start paying them some months and then you can try to use it, if it doesn´t cover your need as offered, then you can start a cancellation process so if you are able to achieve the cancellation then you will save the remained balance to be paid, otherwise if you pay the full amount for "saving some interest" then you may lose the whole money paid if you decide to cancel the contract
Answer Sourcepersonal