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    brendaanne's Avatar
    brendaanne Posts: 1, Reputation: 1
    New Member
     
    #1

    Nov 9, 2006, 09:59 AM
    401 k
    Is there a penalty for borrowing on a 401 k?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
     
    #2

    Nov 9, 2006, 10:03 AM
    No. A 401k loan provision has to be written into the plan. But if it is you can borrow under the terms of the provision. Generally plans allow no more than 2 outstanding loans at the same time, usually 1. Interest is charged at a competitve rate to other secured loans. However, the interest you pay goes totally into your account so you are paying yourself interest.

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