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No. of Recommendations: 2
All thank you. So AJ do you mean sell my stocks in my Etrade account which I have about $50k or 30k of it... is better than borrowing from my 401k?

It depends. What are the terms for the 401(k) loan? How long would it take you to just save up the money instead of selling stocks? What capital gains taxes would you have to pay if you sold stocks? If you have to make 401(k) loan payments, will you be able to continue to max out your contributions?

Especially if your 401(k) loan has a 'due within xx days of termination (voluntary or involuntary)' clause, or you can't both max out your 401(k) and make the loan payments, it would probably better not to take out a 401(k) loan. And unless you can get really good terms (less than 3% - 4%, interest only) on a small business loan, it would probably be preferable to sell stocks.

If you didn't want to sell the stocks, you could see what kind of terms you could get on a margin loan in your eTrade account. That carries other risks - like having the loan called - but if you can get a good deal, it might be a good alternative.

AJ
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