Can I borrow using the Individual 401k and get a 401k loan?
Provided the 401k plan document has a loan provision you are permitted to have a 401k loan. 401k loans are permitted with an Individual 401k up to 50% of the total 401k value up to a maximum of $50,000. Most 401k loans are paid back monthly over a 5 year term. The loan payments (including the interest) are repaid back to your retirement account. 401k loans are received tax free and provided 401k loan payments are received on time then there are no taxes due. Failure to make the loan payments will cause a 401k loan default causing taxes and IRS penalties on the remain balance of the 401k loan.