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unhappyamerican

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debt consolidation with high interest personal loan or cash out some money from 401?
I have about $9k in debt between credit cards and medical bills. Lending Tree preapproved me for up to $10k loan at 30% interest-yikes! or I can get what I need from my retirement fund with a 10% penalty for early withdrawl. I will no longer use credit cards, tired of paying endlessly on them! Not crazy about using retirement funds but it seems any loss there would be less than years of credit card debt along with making payments for a long time on medical bills, that will end up also a bad ding on my credit report until they are cleared up. any thoughts or advise?

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The money you have been putting aside has been tax free.   When you withdraw the money, it moves to your income in addition to any penalty.  Thus, you'll be paying income taxes on the money from the applicable tax bracket.   If you medical bills amount of move than about 8% of your total income, you may quality for a hardship and the medical portion of the withdrawal may not be subject to the penalty itself.    You should weigh the financial impact of both items in which to make your decision.  If the ultimate goal is to to get debt free, you will want to avoid returning where you are now with the credit card debt.  It will be easy to slide back to where you are today.    As long as you are paying the medical bills, even at a monthly payment, you are probably not incurring a penalty or interest and that is something to consider as well..  

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