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Old 04-08-2008, 10:35 AM
cooliemae cooliemae is offline
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I know this is going against the grain, but I would pay-off the 401k first and here's why

Assuming modest gains (6% per year) on the 401k over the next 25 years the $8000 would turn into $34000.

Assuming you payoff the 401k loan and can apply $400 per month to the credit card loan you will have paid somewhere in the neighborhood of $1000 in interest over the next 2 years.

So because the life of the 401k is so much longer, I would pay it off first and invest the money at the same time you are paying off the loan.
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