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Need A 401(k) Loan? It Just Got Less Dangerous

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  • Need A 401(k) Loan? It Just Got Less Dangerous

  • #2
    But still not much less terrible.  I have a colleague who took out a loan last year, thinking it was their money and it'd be cheaper than a private loan.  Well, with the stock market up 20% last year, I'd imagine they'd regret their decision if they knew how much it cost them.


    • #3
      WCICON24 EarlyBird
      I've occasionally toyed with the idea of taking a 401(k) loan to invest into the market.  Like a form of margin investing, but using my own money and paying myself interest. Have thought it could be particularly beneficial if I had a Roth 401(k) (which I don't, though I'm toying with flipping over in 2019--too late for me to flip over this year).


      Edit:  I did take a 401(k) loan to accelerate my student loan repayments, i.e., maxed out my 401(k) contributions to get the tax deduction and then borrowed what I could to pay down my 6.8%/8.1% loans. Then burned the 401(k) loan at a similar speed that I was burning my student loans. Didn't end up being a good idea in hindsight because the market outperformed my student loan rates, but still a decision I'm comfortable having made.