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Debt repayment prioritization

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I have zero credit card debt. Currently, I stand with:

  • $32k in Federal student loans with interest rates varying from ~4.5-6.6% with ~20 year term outstanding;
  • $9.7k in a 401k loan with an interest rate of 4.5% and a 4.5 year term remaining;
  • $15.0k auto loan with an interest rate of 4.35% and approximately 4.5 year term remaining; and
  • $108k mortgage loan with an interest rate of 3.875% and approximately 19.5 years remaining.

In March, I will receive my annual bonus which will be around $10k. I want to sink the bulk of this into my debt, but I'm struggling to decide between paring down the student loans or paying off the 401k loan.


My thinking:

  • Student loans are "safe" debt and there are protections in place should I lose my job, etc.
  • Student loans are at a higher interest rate than the 401k loan.
  • Student loans are visible on my credit report and thus effect my income-to-debt ratio.


  • 401k loan is paying back myself; I'm the recipient of the interest.
  • I'm losing earnings on my "missing" loan balance.
  • 401k loan isn't visible on my credit report thus paying it off would have no effect on my credit (currently sitting at Vantage 3.0 756).

There are other factors with each that I'm not listing here for the sake of brevity, but I ask:


Should use my bonus on my student loans or my 401k?


I'm a smart man, but numbers make me cry.

Thanks in advance!

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definitely the 401k. Then take the amount you were paying on that loan, and apply it to the next one.

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