I am 26 and have around $20,000 in debt on a quite low interest credit line, originating as a student loan, personal debt, and a car loan. The number has been bothering me for sometime, and even though it hasn't affected my credit rating as I have been able to more than meet the minimum payments and I am paying it down slowly (~$335 biweekly plus all earnings from a 2nd job I took specifically to pay down my debt as quick as possible), I feel paralyzed by the debt and I feel afraid take a career step that I really want to, because it will involve taking a lower paying position for awhile, even though it offers far more potential in the future and is more inline with want I want to do in life, and I am afraid I will be in over my head and will either no longer be as able to pay down my debt quickly or have to give up my apartment, which I love.

I have $8700 in a Personal Pension Plan, although I stopped contributing so I could pay down my debt instead. I want to use my PPPs to pay down my debt. I realize I'll lose 20% to taxes, but I project I can pay off my debt a year sooner if I do, which will be a huge weight off my mind. With it I can pay back the debt by next year, and spend the following year building a base back up and replacing my PPPs. Otherwise I would have to 2 years before paying it off, which means an extra year of stress, and probably an extra year before I feel comfortable to make a career change. My debt has been steadily decreasing for the last 6 months, so I'm not worried about cashing my PPPs and the debt just building right back up again and it all going to waste (it's been an ugly learning experience, but I understand how to manage money now, so it hasn't been without value!). Besides for the year and 1/2 before that, my debt load hovered at a constant amount, not really building or decreasing significantly.

Is that a bad idea? My current thinking is, I'm young enough and the amount is so small that it wouldn't be a huge deal in the long run and it would be a whole lot of peace of mind in the short run. I talked to my bank rep already who was against it, but I didn't feel her answer was without bias, I went to speak to her about doing this... Thanks!

Hey i dont think u should do it..You might have good intentions and say to yourself that once the debts are paid off, you will have extra money with which to build up your retirement savings. Some folks will be able to do this, but most of us will find another use for the money. Further, if you’ve lost a job or seen your compensation reduced, this is even harder to do.
hope this could help u..
thanks..

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frugal living

probably not the best idea but I can see why you have done that - there are other ways in which you can do this speak to either the citizens advice bureau or go to a debt company where they can sort out a repayment plan for you.

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