4. 401(k), loan

Pros:

Unsecured loans have lower interest rates.

Credit score has no impact.

Cons:

It can also reduce your retirement savings.

If you are unable to repay, there will be severe penalties and fees.

You may need to pay your loan back quickly if you lose your job or quit your job.

It is not recommended to borrow money from a company-sponsored retirement plan like a 401(k). This can have a significant impact on your retirement.

It is best to consider it after you have ruled out balance transfer cards or other types of loans.

The loan will not appear on your credit report so it won’t have any impact on your score. However, there are some drawbacks: If you don’t pay the loan back, you will be subject to a penalty and taxes. You may also end up with additional debt.

Also, 401(k), loans are usually due within five years unless you lose your job, or quit. Then they’re due the following year on tax day.

>>> The benefits of a 401(k), loan