White: There’s no expense for a 401(k) plan loan, aside from maybe an administration fee that is small.

Yellen: Actually? Only an administration fee that is small? Fidelity Investments charges $50 in order to set within the loan. (several other companies charge more). And overnight—for a $25 fee if you need your money faster than snail mail, Fidelity will send it to you.

That totals around an astonishing 15% in costs on a $500 loan!

White: perchance you should borrow significantly more than $500, so that the percentage will be less?

Yellen: Get genuine! If somebody steals $75 from your wallet, do you really just clean it well? Plus, many plans charge an administration that is ongoing for each and every 12 months your loan is outstanding! Continue reading →