You might experience difficultly when attempting to obtain a loan during the current economic status. If you do need to borrow money, one possibility is to borrow against your 401(k) account. Before you take this opportunity be sure to consider both the pros and the cons of that potential choice. 

Pros

Most employers will allow their employees to borrow from their account. However, the Federal law will limit such loans to roughly 50% of the invested 401 (k) limits these loans to 50% or $50,000, whichever is the lesser amount. These loans are obtainable without difficulty. For instance, your chance of being rejected is reduced because of your credit score or low income. These loans are also processed easily with little to no paperwork.

Once your 401(k) is borrowed from, you'll debt that accrued from paycheck deductions. In other words, instead of paying a bank interest, you'll be repaying yourself.  The terms of the loan assure your money is placed into your retirement account with interest.

Cons

If 401(k) loans are simple and straightforward, what are the negatives? Any reduction in normal pay check money can seem daunting, and it might be a harder adjustment than you think.

Also you could run into a tax trap as well. Because the money used to repay the debt comes from your regular paycheck, not from your gross income amount – you’ve technically already paid tax on it. Eventually, you’ll also pay tax on your 401(k) withdrawals; in essence, you'll pay tax twice on the same money.

Also consider the current economic climate when borrowing any amount of money. As opposed to some contingency plans for bank loans, typical 401(k) borrow loans have to be paid back within 60 days of leaving the company. Failing to do so, you’ll probably owe income tax on any unpaid amounts and a 10% early withdrawal penalty if you're younger than 59 1/2.

So tread lightly when you consider borrowing from your 401(k). Do it only under extreme conditions and if you’re sure of your job security.