Trying to give my mom advice. She got a settlement from car accident, and can payoff either Prosper or 401k loan, but not both, what the best advice. She only has 2 cc and both low. I told her not to put in savings, payoff debt.
401k - 5%, owe $19500 - bi-weekly pymt = $215
Prosper -10.25%, owe $13500, monthly = $306.23 (5 years)
I told her Prosper cause of interest rate. Am i wrong.
Many will tell you "Never borrow from your Retirement Funds!", and that's generally good advice. But, for your mom's personal finances, she's paying that 5% interest on the 401k loan to herself, the interest is credited to her 401k balance. (Depending on the 401k plan there might be a small admin fee for administering the loan, but the bulk of the interest payment is credited to her 401k balance.)
The 10.25% interest to Prosper is throwing money out the window, it goes straight to Prosper. Pay off Prosper.