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Vairum99: The upside is that you would reduce the amount of interest that you are paying.

Downsides: 1. Check your plan, but in many plans loans are immediately due if you leave your current employer (voluntarily or involuntarily). If you can pay the loan it is then considered a distribution, meaning that income taxes are due as well as the 10% penalty if you are lesss than 59 1/2;
2. You would be foregoing the possibility of earning more than 6% on a substantial portion of your 401-k (approximately 40%); or phrased another way, you would be locking in only 6% return on a substantial portion of your 401-k.

Last, I beleive that you cannot borrow from an IRA, only a 401-k (and then only pursuant to terms of the plan). Your question referenced 36,000 in 401k - ira. Hope this helps. JAFO
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