The percentage of people taking 401(k) loans has declined, but 1 in 8 people still did so amid the slow recovery last year, according to Aon Hewitt. Financial experts argue against the practice, noting the loss of compounded tax-deferred growth, lower contribution rates among those who have loans and the chance that the money could have to be paid back quickly because of a job loss. Better options include home-equity loans, personal loans or possibly even credit cards, says Pam Dumonceau of Consistent Values.

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