401k Loans: The Good, The Bad, The Ugly

Looking for a fast and easy way to finance an upcoming purchase? A 401k loan is one of the most readily accessible forms of financing for diligent investors who have lots of cash socked away for retirement.

The term "loan" can be a bit misleading. Unlike just about every other type of "loan," there is no lender involved with a 401k loan. In fact, it doesn't even require a credit check. With a 401k loan, you're borrowing from yourself and repayments (with interest) are all paid right back into your employer-sponsored or Solo 401k plan.

Because of its unique features, a 401k loan can be one of the most expedient ways to cover a large expense or consolidate debt. But it could also harm your future self. Are the tradeoffs worth it? We explain the good, bad and ugly when it comes to 401k loans.