The loan allows you to borrow from yourself by borrowing from your retirement savings. Interest is paid back to you, in lieu of the investment earnings that the borrowed amount would have earned. The interest rate is usually reasonable and loan payments can be made easy, often being deducted directly from your paycheck. Before taking such a loan, make sure you know and understand all terms and conditions. Investigate far enough in advance of needing the funds so you know how long it takes to apply and to get a check.
Some plans can illustrate payment schedules before applying.
There are penalties involved if you fail to repay and in some cases balances must be paid upon termination or separation of service. Opening the lid you spot the coveted can opener on top. Relieved, you pull out the can opener and are able to give the dog his dinner. Homeowners and mortgage insurance coverage are the first to come to mind. Of course, make sure you update your address with your auto insurance , your bank accounts, investment accounts and other financial obligations.