Tap your 401k loan with a debit card
Personal Finance February 16th, 2008More and more employees following a 401k plan are being offered a debit card to access 401k loan funds. The card thus issued is known as ReservePlus.
How does this work?
When a company offers a 401k plan to any employee, the latter has to transfer the approved loan into a Reserve Plus account online. Then the employee receives a debit card which they can use to take out less than 35% of the loan amount they have been approved for.
The loan starts off as soon as an employee removes cash from the account. The employees receive the bills directly and not through payroll deduction. They can pay back the loan in the same way as they pay off their credit cards. Depending upon the employer, the employee may also get a revolving loan thereby taking out money and paying it back within a specific time period.
Since 2003, there have been a growing number of employees applying for the ReservePlus debit cards and as such experts feel, the program has lured even the reluctant consumers to participate in retirement plans.
Interested to know the pros and cons? Well, you have to wait for my next post:)
Technorati Tags: 401k loan and debit card, reserveplus
February 26th, 2008 at 4:10 am
Interesting post caron, just waiting for your next post:)
November 12th, 2008 at 2:53 pm
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