Not all plans allow for 401(k) loans, but some do. When you borrow from your 401(k), you sign an agreement that details the terms of the loan, including interest rates and the repayment period. Be careful about borrowing from your 401(k) account balance. If you can’t repay the loan, the IRS considers it a withdrawal, and it's taxed as ordinary income. If you’re under 59 1/2, you could also end up owing a 10% early withdrawal penalty.