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Pixy is so nice, sometimes I wonder if his comments might be misunderstood. He correctly said

Pros: You pay the money back to yourself. The interest you pay also is paid to yourself. The loan is easy to get.

Cons: You lose the compounding effect on your investments while the money is out of the 401k.


Most of us believe a return of 15% or better is possible with Foolish investments, although we may not make 15% in any given year. So when you borrow from your 401K, consider what the rate of return your 401K is earning. So if for the moment you could borrow the down payment, would you be willing to pay an interest rate equal to the return on your 401K?
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