I made a bad decision and took a 401k loan last year. I question whether I could pay off the loan with a 529 account I have through Michigan education savings plan. I would not be pulling any money that had gains. For instance, if I had 50k in my child's MESP plan, I would only be pulling 10k out of this account to help pay off my 401k loan. Once I paid off my loan, I would work hard to reimburse that education account till it was back to 50k (and more).
Can I do this? I didn't save enough in my emergency account (I have around 10k in savings) and I don't want to rely on family or anyone to ask for a loan.
I know I really messed up and please do not lecture me on what I did wrong. I know this was all bad financial decisions and I am working to make this better. Can I pull from a 529 education plan to help pay off my 401k loan?
If I cannot, what other options do I have? Do I have to take out a loan from a bank? If so, what kind of loan would I take out? Would I need to tell the bank that it is for paying off my 401k loan?
My oldest child is only 10. I have two other children at 3 and 4. I hope that they will be attending school locally here in michigan. Possibly starting at a community college or simply a state university within our state of Michigan.