<p>
</p>
<p>The caveat here is “can you stand the risk?” If you intend to payback the loan in about 2-4 years, then the risk is mitigated. If you are going to need 10 years to repay it, then in my opinion the risk is considerable. If you can get a fixed rate loan, and it is better than PLUS and there are no pre-payment penalties, then it is worth grabbing. If not, you need to decide your risk tolerance. Evaluate these loans just the way you will evaluate a ARM.</p>
<p>Yes borrowing from a 401 (K) is risky and has a down side and is good short term source, never be used for borrowing money that will not be repaid rather quickly.</p>