Does using a 401k Loan to pay off Credit Card Debt, Student Loans and build an emergency fund make sense? know it takes away from future returns but wanted another opinion or experience from it.

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If you do this make sure to have a plan to avoid credit card debt in the future. Most people fall back into old habits if there is no "pain" to pay off the consumer debt.

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No. Definitely not for emergency fund and student loans (assuming they’re reasonable rates). Credit card debt maybe, but you’ll miss out on the compound interest gains from pulling the money out of your 401k.

This.

This somewhat depends on how long it will take you to pay the 401k back. If you can do it relatively quickly, then a definite yes on CC debt and maybe for student loans. I certainly wouldn’t for an emergency fund though. If you lost your job and needed that emergency fund, you’d need to have used it to pay the 401k back or get hit with taxes and penalties, so no use there.

Yep. Id pay it back within 7 months max. Good point on the emergency fund.

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