Also a couple of other things that should be mentioned about 401(k) loans in general: 1). Whatever amount you withdraw for the loan is not participating in investment earnings. 2). The interest rate is somewhat irrelevant, as that is credited to your account as payments are made. Obviously you wouldn't want to pay some exorbitant interest rate to yourself, but it is all going back in your account. 3). If your 401(k) account is a pre-tax account (not a Roth), your loan payments will be deducted from your paycheck after taxes. Unlike your normal employee contributions, which are pre-tax deductions. And last, if something happens with your job and you terminate employment with the company, you will be required to pay back the entire amount due for the loan within a relatively short time (90 days maybe?). If you do not pay it back, you would owe a 10% tax penalty in addition to regular federal taxes.