How Can I Borrow From My Retirement Plan? 
How much can I borrow from my retirement plan ? Now if I could flick your ear like your dad used to do , I would say `` why would you want to ? '' Just because a loan provision can be included within your plan , it does n't mean you should exhaust EVERY other possibility first . Borrowing from your retirement plan is far and away the last possible choice to make . That said ... The limits for loans can be set by your plan . Borrowing provisions can be set up by your plan . Payback interest rate is set up by your plan . Your plan advisory board will decide if a loan request has merits . Usually the money you take from your plan is no longer participating in plan returns , so if you 're investment is earning 10 % and your loan payback provision is 4 % , you 're making 4 % on your money . If you get laid off or quit your job , your loan from your retirement plan is `` called '' immediately . Failure to pay it back when called results in a `` premature distribution '' which makes your `` loan '' income , along with a penalty , so your income taxes could change considerably . Try to remember just because a feature is available , does n't mean you should use it . 