I signed up with MBNA 4 years ago and was paying approx. 9% interest. In the past year, I have had some financial challenges and became 30 days late twice. This resulted in my interest rate vaulting to 20%. I called them and requested a lower rate. I persisted citing that I had some personal hardships; they soon became nasty and said that the rate was the rate. So, I am prepared to access my 401K to pay off the 21,000. My question is: do i have some leveraging power to request that they remove the derogatory marks in turn for a cash payout? My suspician is that they will not care and offer BK if I cannot handle paymnets. Any sound advice is greatly appreciated.
Just be CAREFUL accessing a retirement vehicle to pay off a debt. If it's a loan then if you do lose your job you may owe 21k up front in TOTAL. As long as you job is stable it may be worth it but I wouldn't risk it just to do what you want to do.
Would it not be possible for you to look into a loan from the Credit Union or Bank for the amount owed? This would give you the lower rate you want and keep your retirement stash safe.
will a credit union process a loan as secured with 401k funds? i think they may lnd up to 80% of portfolio value. if so, i think my rates would be too high as my credit scores have slipped recently. i think i will bite the bullet and end this vicious cycle by paying off and then going on a strict budget. thanks for your feedback.
...or not pay it for abouta year and settle for half being that MBNA most likely will just be a pain the arse on your credit report
If you do not pay for about 90 days, they will offer you a hardship program, lowering your APR and monthly payments. But, that will screw up your credit even more. Not a good option, but still an option.
