One of the great advantages of using an Individual 401(k) is that you are allowed to take out a loan from your plan in the amount of $50,000 or half of your current account balance, whichever is less (no more than $50,000). In many cases you will get to set the interest rate charged, so long as it is reasonable, and there’s a repayment plan based on how much you borrow and the interest rate you lock in. According to IRS rules, you have five years to pay back the loan, unless the funds are used to buy your main home, in which case you have more time to repay.
A Individual 401(k) loan does have some drawbacks, because you are paying yourself back with after-tax earnings, and you’re still removing money from your retirement account which could be growing tax-free or tax-deferred. This loss of time in the markets can work against you, however it does provide a tax-free way to access cash if its needed.