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Should I pay off a loan using my RRSP?
I did a stupid thing several months ago and took out a personnal loan that has a crazy high interest rate. I have the money to pay it off in my RRSP savings. Should I pull out the money and pay off the loan? I am new to this whole money management thing and I want to do what would be the best for my future.
2 Answers
- 1 decade agoFavorite Answer
Keep in mind that the difference in interest charges on a low rate & a Crazy high rate with a small personal loan less than $5k is minimal if not kept for 12 months+. If you still have 6 months of living expenses after using your RRSP account to payoff the loan, I'd make the move.
Source(s): Finance 10+ years - Anonymous1 decade ago
I also took out personal loans for my RRSP contribution when I did not have savings. I now contribute weekly rather than waiting until the last moment. I think you should pay off your personal loan as soon as possible. Getting a personal loan and paying on time is actually good for your credit rating. In the future plan your finances and RRSP contributions.