9. Borrow From Your Future—Retirement Loan
Another way to consolidate debt involves borrowing from a retirement account. Just like borrowing from life insurance, this should only be considered as a last resort. If borrowing from a 401k account, it’s important to note that any loan must be repaid within a five-year period. If it is not, the money borrowed will be treated as an early withdrawal and be taxed heavily, and subject to penalties. Further, if you borrow from a 401k established at work and you leave your employer, you will be required to repay the loan within 60 days of termination. Failure to do so will result in financial penalties as well.