wovenwonder
DIS Veteran
- Joined
- Feb 12, 2001
When you take a loan from your 401K, you have to pay taxes on the money twice. (You pay back the loan with after tax money, and then the money is taxed again when you take it out of the 401K at retirement). So it's not a good idea! Better to get a second job!
She is going to pay that same amount back with after tax money no matter if it is paid to the credit card company or to her 401k account. Either way, she is using after tax money to make the payments so that isn't really a good argument.