There's a laundry list of reasons why not to borrow from your 401(k). While the money is on loan, it's not working for you - and if you leave your job, you'll have to pay it back in 60 days or treat it as a taxable withdrawal.
Sentiment: NEGATIVE
You never cash out a 401(k) or IRA to pay off debt, unless it's to avoid a foreclosure or bankruptcy.
The problem is that borrowing money to pay back more borrowed money that will oblige you in the future to borrow even more money doesn't sound kosher. Because it isn't.
The only time I've ever taken out a loan is for the building work I had done at our house and I did that by extending the mortgage.
Especially if you're over 40, shortening the term of your loan to pay it off sooner could make you mortgage-free in retirement.
Just because someone will lend money to you doesn't mean you should borrow it.
When you borrow money, you should always think how you're going to pay it back.
You cannot spend your way out of recession or borrow your way out of debt.
Borrowing is not much better than begging; just as lending with interest is not much better than stealing.
Take free money. No matter how in debt you are, if your employer offers a matching contribution on a 401(k) or other retirement vehicle, you must sign up and contribute enough to get the maximum company match each year. Think of it as a bonus.
I would borrow money all day long, if the cost of borrowing is less than the expected return.