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Author: johndoe3824 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25275  
Subject: Should I take a loan from 401k? Date: 1/28/2002 9:34 AM
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My wife and I (28 and 30, respectively) will be needing some extra money in the next 4-6 months to help with medical bills. It is possible that these bills could run as high as $10-15k.

At this point, we are slowly rebuilding our emergency savings (<$2000) and our personal stock portfolio is rather meek as well (~$5000) - although we are making regular contributions. However, on the plus side, we have no debt - other than our 2 cars and house.

My wife works part-time, but I have a fairly decent job. I have saved $40k in my 401k and I'm fully vested.

Based on this, I feel like our best situation is to get a loan from my 401k to help with the medical bills. I am being told I have ~$20k available in my 401k for a loan at an interest rate of 5.75%.

It's obvious I don't have money readily available to pay for these bills and the rate on the loan appears to be as low as I can get.

However, I'm not exactly sure how the "401k loan" process works. Please provide any insight on this and whether doing this is my best option.

Thanks.

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