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I would pay back what you owe to the 401k. Then you have a clean slate and don't have that burden on your back anymore. Plus, you're paying 4.5% interest instead of EARNING interest, which is what your money would be doing if it were invested (in a mutual fund or whatever) within your 401k.

But isn't most of that 4.5% going back into the 401(k) account? So, instead of earning market returns (or the returns of whatever that money would have been invested in), it is earning 4.5% or close to it from the interest one is paying? If one is paying oneself interest, it sure doesn't sound all that bad.

If that interest was just disappearing to a creditor, I wouldn't be so quick to suggest funding the Roth IRA.
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