Taking a loan out of your 401k is never desirable as it can hinder saving for retirement. Here are 11 401k alternatives that won’t thwart retirement planning and give the money you need.
Personal Loan
A personal loan can provide you with several thousand dollars, or more, within a few business days. Depending on your needs, this may be enough to cover your needs.
Depending on your interest rate, a 401k loan may be more affordable, but it leaves your retirement savings intact.
Take Money From Your Savings
Emergency funds serve a purpose. This may be one of those times. If your need doesn’t liquidate your savings, it could be a wise move.
Once you’re able, start immediately to replenish your savings.
Use a Cash Advance App
Cash advance apps aren’t perfect, but they can provide you with an influx of cash to cover short-term needs. The funds are essentially an advance of your paycheck.
This won’t cover a large need, but could help if you’re in a pinch.
Start A Side Hustle
If your need for cash is going to be ongoing, don’t overlook starting a side hustle. Perhaps you have a skill you can monetize on the side, or you can do work like driving for delivery apps to make money on the weekends.
Funnel the cash to your need and your retirement savings remain untouched.
Ask For Extra Hours at Work
Your best choice for extra cash may be right in front of you – your job. Ask your employer for additional hours. If available, throw all of your earnings at your need.
Get a P2P Loan
Peer-to-peer loans (P2P) are an alternative to bank loans. If you don’t qualify for a traditional loan, or don’t need a lot of cash, a P2P loan could be a substitute.
Sites like Prosper let you crowdsource your need, and you make monthly payments to satisfy the indebtedness.
Open A Zero Percent Credit Card
The right credit card can be a legitimate alternative to a 401k loan. A zero percent credit card gives the ability to have no interest charges for at least 12 months, and sometimes 18 months.
Just make sure to make your monthly payments to avoid making your situation worse.
Take Out a Home Equity Loan
It’s never fun to tap the equity in your home, but doing so is a reputable alternative to a 401k loan. You borrow funds from the equity and make monthly payments to repay it.
Interest rates are relatively low, which is helpful if you need a sizable amount of cash.
Borrow Money From Family
Borrowing money from family or friends is always tricky. However, you may have someone that wants to help. Don’t overlook this, and set clear expectations for repayment.
Tap Other Investments
If you have other investments, it may make sense to sell some of your holdings to free up cash. However, take into consideration any tax implications.
Selling stock may result in a taxable consequence. That may cause further issues come tax time, so speak with a tax professional before taking this step.
Get a Home Equity Line of Credit
A home equity line of credit (HELOC) is another suitable alternative to tapping your 401k. Interest rates fluctuate, so payments can be unpredictable.
If you need the option to borrow a lot, but with flexibility to borrow what you want, a HELOC could be a good choice.
11 Jobs That Pay $20 an Hour and Don’t Require a Degree
A college diploma is terrific, but it’s not always necessary to earn a good living. Consult this guide to identify other ways to earn at least $20 an hour without a college degree.
Jobs That Pay $20 an Hour and Don’t Require a Degree
How to Save Money on a Tight Budget
Saving money feels impossible when you’re struggling to make ends meet, but you can do it. Use these tips to save money each month, even on a tight budget.
How to Save Money on a Tight Budget
21 Best Under-the-Table Jobs That Pay Cash
Jobs that pay cash are a helpful way to help make ends meet. Thankfully, there are lots of ways to make money on the side.
Best Under-the-Table Jobs That Pay Cash
How to Cut the Cord on Cable or Satellite
Record numbers of Americans are cutting the cord on cable and satellite. This guide shows the best way to end your contract and replace it with a top streaming service.
How to Cut the Cord on Cable or Satellite
7 Steps to Break the Paycheck-to-Paycheck Cycle
Making ends meet is hard on a limited income. However, it is possible to break the cycle and find financial stability. You just need to know where to start.
How to Stop Living Paycheck to Paycheck
Related