Should I take out money from my 401K to pay off my timeshare?

I have $20,000+ in my 401K account. I bought a timeshare with an ex-boyfriend five years ago.

Monthly payment: $168
Interest: 17%
Will be paid-off in 10 years. I have five more years to go.
Current balance: $6, 235.64 (amount left that I need to pay)

I've been paying the minimum every year for five years. I don't know why, but I just realized that I should try to pay this timeshare off as quickly as possible. Using Karl's Mortgage Calculator, my total interest would be 50.25% after everything is paid off!!

Should I take out the money from my 401K plan? The interest rate is 5% and I can try to pay it off within one-two years. There's no penalty if I pay it off early.

By: Elisa | January 3, 2013, 11:29 am
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