Thursday, March 5, 2009

Getting out of Debt and Staying out of Debt

Yesterday I posted about borrowing from your 401 (K) to get out of debt or purchase a home. Another thing some people do when interest rates are lower is to refinance their home and take some of the equity as cash to pay off bills. This is fine if you change your spending habits. But many people do this and then rack up big bills again. Then where are they, a higher mortgage and high bills again.

Also, as stated in the last post. If you borrow from you 401 (K), that has to be paid back within 5 years or if you leave that job. If you use it to pay down debt but keep spending like you were, you will be hard pressed to pay the loan back in the time you are suppose to.

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