Date: Thu, 2 Aug 2007 18:29:45 -0500
From: kastnna 
Newsgroups: misc.invest.financial-plan
Subject: Re: Heloc-pay off 401k loan
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On Aug 2, 12:35 pm, big_rag...@webtv.net (Marty) wrote:
> Hi Group
>
> Can a person apply for an equity line of credit to pay off a 401k loan
> if one loses his(her) job? The 401k loan is already reality with 3 years
> left on the balance.Losing the job could be in two months, two years, in
> between,or never.


It is totally plan dependent, but I have seen many 401(k)s that allow
you to continue to repay an existing loan even after you are seperated
from service (fired, quit, etc). Plans that allow for this also
require that you leave your funds with the plan until the loan is
repaid. If you rollover your balance to an IRA or new 401(k), the loan
is automatically in default. Check with you plan admin or the plan
document.

We have discussed leaving or rolling over old 401(k)s ad nauseam. I
recommend a quick search to find the pros and cons of doing so, if
this is an option for you.

To answer your original question directly, yes, you can use a HELOC or
HEL to payoff your existing 401(k) loan. Whether it is the smartest
move for you or not depends, among other things, on the various loan
terms.