Quote:
Originally Posted by 1795
Of course, you could always take out a loan against your 401K if you had one with enough money in it. Then, you would be paying yourself the interest. However, there may be limits on how much you can borrow from it and the term is usually short.
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I do not recommend taking a 401K loan unless you are certain you plan on staying with the company and you are sure that the company is doing well. I took a 5 year 401K loan a bunch of years ago to pay for part of my divorce. I planned on staying with the company and thought the company was stable. I was about half way thru the loan term when the small company I was working for ended up un-expected laying off most of the employees. I think there is a grace period to pay the balance back in full when your employment ends. If you do not pay the balance back in that time frame, the balance due will then be considered a distribution to be taxed as income with a 10% penalty.