Is borrowing from your 401k a good idea? Well, not so much. First of all the government in the US did this with the social security fund, and now we’re pretty much screwed if you’re currently young. The bad thing though with a 401k loan is that:

• You’re robbing your future by raiding your retirement fund. You’ll lose any growth while the money is borrowed, and that’s the whole point of investing funds for your retirement.
• If you lose your job the loan is due immediately. This is the biggest issue now. It’s hard to get a loan when you’re unemployed.
• ince it’s hard to get a loan when you’re unemployed, most people I would assume end up just keeping the loaned money which will be considered a taxable distribution. Therefore you’ll pay a 10% penalty, get a huge tax hit at your current income level, and you’re retirement will still be hosed.