I have a 401k loan used for a house down payment and now I am changing jobs: What should I do?
I guess this could be a cautionary tale, but I am hoping it can be remedied.
I had a job that I am leaving, but I had took a 401k loan to put down on a house. I don't have the money to pay it back so my idea was this.
Borrow the balance that I owe from a bank, roll over the replenished 401k to an individual 401k (through LLC I am establishing) and then take another 401k loan out again and then pay of the bank loan. Can I open a individual 401k if I also have a full time job and the LLC will be on the side? Any funds I contribute to the individual 401k will be after taxes.
or
Take the tax hit.
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The first step is to contact the company you are considering using as an administrator. Ask if they have a loan provision.
For what it's worth, I looked at Schwab, and it seems to indicate they do not offer loans against this type of 401(k). That doesn't mean no one does, just that you may need to look around.
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