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No. of Recommendations: 2
I think that DW should probably look at the numbers before making a decision. To me, having to pay $13.8k in deductible interest over the next 10 years would be much more preferable than having to pay $19.3k in penalties and taxes in the next 14 months.

Nice analysis, AJ.

I would add to your analysis the possible return on the 401(k) by repaying the current $48k 401(k) loan with the HEL. While the OP could be paying $13.8k in deductible interest over the 10 years on the HEL, he could also be earning about $28k on the $48k in the 401(k) assuming a modest 5% return (assumed constant) over the 10 years. That's even more reason not to pay the penalties and taxes.

PSU
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