Borrowing from a 401k has advantages and disadvantages. Some financial advisors state it is foolish and a last resort. They have a point however not every person’s situation is the same. The Pro’s – person has instant access to the funds, no credit check and the funds can be used for any purpose.
The Con’s – it is a loan, it has to be repaid with regular payments, the interest paid for the loan is NOT tax deductible and the interest will be taxed when a distribution occurs. For further information please get in touch with us.