SHORT TERM BORROW AGAINST 401K TO HELP GET OUT OF A HOLE?

Currently my boyfriend is laid off, I am working full time, but we are struggling a lot with a new baby and everything else. Since my car is only a 2 door, I have been driving my parents 2nd car because it is 4 doors. My parents said that if I could sell my car, I could drive theirs still for a while, with no car... show more Currently my boyfriend is laid off, I am working full time, but we are struggling a lot with a new baby and everything else. Since my car is only a 2 door, I have been driving my parents 2nd car because it is 4 doors. My parents said that if I could sell my car, I could drive theirs still for a while, with no car payment til we get things straightened out financially. However, I am going to get probably about $2000 less than what I owe on the car. I have someone that offered to buy it, but I need to come up with the $2000 to pay the difference. I know it is not the best thing, but if I borrowed against my 401k, paid that off, got rid of the car, and had the payments to my loan taken out of my paycheck directly I will not get hit with any tax penalties. I actually will probably pay it in full after the first of the year comes and I get my income tax return. So really I'd only be borrowing from my 401k for a few months. My boyfriend and I are arguing about whether this is a ridiculously stupid idea, or if it will help. (I think it will help, he thinks its stupid). ANY advice would be SO welcomed because I want to make a good decision and wasn't quite sure where to turn. Thank you!
8 answers 8