Can I Borrow Money from my 401k?

Can I Borrow Money from my 401k?

The answer is yes, you can borrow money form your 401k, and taking out a loan rather than simply withdrawing your money is always a better option, since you’ll avoid the 10% early withdraw penalty. Here are few things to keep in mind:

• 401k loan has to be repaid
• If you plan to change jobs, you’ll have to repay the loan before you make the move.
• If you’re laid off you’ll have to pay the entire amount back or you’ll face the early withdraw penalty

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