Do some online research about borrowing or taking out a loan from your 401(K) plan and you will see about 99% of the sites you visit will tell you to never borrow money from your pension.
So, why did I borrow from mine? I will tell you.
First, mine is not a 401(K). It is similar and called a TSP Thrift Savings Plan. It is run by the US Government and is one of the largest pension plans in the world.
I wanted to invest in some property and looked at my options. My first option was a home equity line of credit. I have a condo now for about 20 years so I have some equity in it. My credit is good, and it was an easy acceptance from the lender.
The problems were the fees and interest rate.
The interest rate was actually decent but the fees were in the thousands of dollars.
I looked for an alternative and found that I could borrow from myself. So here are the reasons I took out a loan from my pension fund.
1. I had enough money in the fund. I was allowed to borrow 50% or 50,000, whichever was less. I borrowed $50,000. To view and download this full PLR article, you must be logged in. Registration is completely free. Once you create your account, you will be able to browse, search & downlod from our PLR articles database of over "1,57,897+" on 1,000's of niches and 200+ categories without paying a penny. Click here to signup...
2. The interest rate was the lowest in town. I borrowed the money on February, 21, 2008 at 3.5%.
