What if I need a loan? Tapping into your 401(k) plan may be an option, but you may want to take a loan rather than a withdrawal to avoid tax consequences. Of course, a loan will impede the potential growth of your retirement nest egg.
Loans are also available from credit cards and banks, but often at a high, fixed rate. Other loans include home equity loans and mortgage loans. These loans are usually more tax advantageous, as the interest on them can be tax deductible. The drawback is usually the costs associated with the closing of a second mortgage. Be sure to research all of your options and find the loan that best suits your personal situation.
Permanent life insurance products, such as whole life, universal life, and variable universal life offer cash value accumulation in addition to their essential financial protection. Over the long term, the cash value accumulation may be significant enough to help you. And the interest rates on these policy loans may be lower than a loan from a bank, but be aware that loans reduce the death benefit.
If you need a loan specifically for your own continuing education, or financing your child's education, check out the Your Children's Education section.
- FINAID's Web site
 lists details on loans for graduate, business, law, or medical schools.
- The Student Guide is the most comprehensive resource on student financial aid from the U.S. Department of Education. Grants, loans, and work-study are the three major forms of student financial aid available through the Department's Student Financial Assistance office. Updated yearly.
- The College Board's "Paying for College" section has lots of general loan information.
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