Introduction
When it comes to managing our finances, unexpected expenses can sometimes arise. Whether it’s a medical emergency, a home repair, or a sudden job loss, many of us find ourselves in need of some extra cash. In these situations, one option that might come to mind is taking a loan from our 401(k) retirement plan.
Understanding 401(k) Loans
A 401(k) loan is a type of borrowing that allows you to take money out of your retirement account to use for immediate needs. Unlike a traditional bank loan, a 401(k) loan does not require a credit check or a lengthy application process. The amount you can borrow is typically limited to a percentage of your vested balance in the retirement plan.
