Borrowing from your 401k can be a lifesaver for many people. One example would be someone who needs a large amount of money to complete a home renovation prior to selling.
Let’s say a renovation would cost $15,000. You could take a loan out against your 401k for that amount, and have the work completed on the house.
Ideally, this renovation would cause the value of the home to increase by at least $15,000, but hopefully much more. Other similar situations where you would be able to pay off the loan as quickly as possible and turn a profit, is a good use borrowing against your 401k.
Obvious reasons to not borrow against your 401k would be to finance a family vacation,
