nicodemus on Nostr: In this case, it’s a matter of collateral. The car is the collateral, along with ...
In this case, it’s a matter of collateral. The car is the collateral, along with your credit. The personal loan is expensive because there is no collateral. You can lower the interest on a personal loan by adding collateral.
Your fiancé giving you the money either means you’ve just received income (taxable) OR your actin as a fiduciary for her and it’s her investment.
At least, that’s how the law sees it.
What’s simpler is to borrow against your own 401k. The interest rate goes right back into your 401k. Yes, you have a loan. But to yourself. You gain the interest. The only downside is these loans are usually pretty limited ($50k-ish for average account sizes and plans) and, if you default, the unpaid amount gets treated as a distribution.
Recognize that leverage/loans means you are borrowing from your own future to pay for today. It can work out fine - but it can also be disastrous. You can’t predict the future. There is no free lunch. Borrow a fraction of what you can afford to lose.
Your fiancé giving you the money either means you’ve just received income (taxable) OR your actin as a fiduciary for her and it’s her investment.
At least, that’s how the law sees it.
What’s simpler is to borrow against your own 401k. The interest rate goes right back into your 401k. Yes, you have a loan. But to yourself. You gain the interest. The only downside is these loans are usually pretty limited ($50k-ish for average account sizes and plans) and, if you default, the unpaid amount gets treated as a distribution.
Recognize that leverage/loans means you are borrowing from your own future to pay for today. It can work out fine - but it can also be disastrous. You can’t predict the future. There is no free lunch. Borrow a fraction of what you can afford to lose.