[Freedom4US]

Why do I have to pay back my own money? And pay myself interest too. I get it, but I don’t really understand that.
Taxes of course, but still.

[Alberta's Child]

Technically you aren't "borrowing from yourself." The lender is the company that serves as your plan administrator. You have to pay interest on the loan because it comes from a tax-deferred account and isn't truly "yours" yet.

It's acually a pretty good financial tool if you know how to use it right. I borrowed a pretty decent sum of money from my 401(k) account a couple of years ago to finance a business venture. The interest rate was very low (4.25%), and that rate was better than what I was getting on my bond funds anyway so I cashed them in to get the money.