Keep 401K loan or refinance with cash out?

[Arijit De]

Wondering if it makes sense to keep the 401K loan that helped purchase a property in cash OR should I refinance the property with cash out? The term of 401K loan is only 5 years resulting in larger payment every month but the interest is what gets paid to myself. On the contrary, refi with cash out will have the interest get paid to the lender but will reopen ways to close my current 401K loan.

Thoughts?

[Steve Morris]

Interesting proposition

1) Keep 401K loan (don't know rate) and get a nice predictable tax-sheltered growth in your fund while you can keep contributing to the limit OR

2) Borrow money to pay back the 401(k) and (if lower rate) increase your current and mostly tax-sheltered income.

Think I'd do 2).