Are you in danger of bankruptcy?
During bankruptcy proceedings, retirement savings accounts are usually protected, but a loan against your 401(k) would not be. That means it would be safer to keep your money protected in your 401(k) if you are in danger of filing for bankruptcy.
The bottom line: The old advice that 401(k) loans are always a bad idea is too simplistic. Sometimes, taking a loan against your retirement account can provide a much-needed cash boost. But make sure you have a long-term plan and understand the risks involved so you don't ruin your retirement funds and make a costly mistake.