From: Sandra Loosemore 
Newsgroups: misc.invest.financial-plan
Subject: Re: Payoff Loan
Date: Fri, 22 Jun 2007 10:56:49 -0500
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akhan@att.net writes:

> Sorry took me a day to gather info. It was a credit line from BofA on
> a 12% interest rate, I was paying $259.00 per month and I can still
> afford to pay that or little more.
> 
> I checked with my 401K plan advisor, I can borrough 18K on 9.25% bi-
> weekly payment through payroll which comes out as $173.00 p/p.chk, if
> I sperated from the company I have 90 days to pay it off, Chase offer
> on personal loan is 13%, I am 45 and own a home, you think HEL is the
> way to go, I also have a car paid off worth around $25k, should I re-
> finance my vehicle and go that route. Somehow I am keep thinking about
> 401K loan and pay back the interset to myself rather than to others, I
> guess wishful thinking.

It sounds like you've been doing too much wishful thinking already, and
living way beyond your means.

Sell the expensive car and use the proceeds to pay off your debt.  You
should have enough leftover to buy yourself a less expensive used car
with cash, or try walking, riding a bike, or taking public
transportation for a while, until you get out of the hole you've dug for
yourself.  

If you must borrow money, a home equity loan is usually the way to go,
because of the preferred tax treatment on the interest.  Borrowing
from your 401(k) plan is robbing yourself of your retirement savings,
and taking out a loan on a depreciating asset like a car is just a
Dumb Idea generally.

-Sandra the cynic