It is a thought creeping into more and more consumers’ heads: how am I going to get beyond all my high-interest consumer debts?

Many might not realize that they can borrow from their 401(k) plans to pay off these higher-interest debts, although financial experts disagree about whether or not this is a smart idea.

According to a Federal Reserve Bank article that published earlier this year, more consumers should take advantage of 401(k) loans, which are withdrawals of money that you have saved in your 401(k) retirement account. You’ll have to check with your specific plan, but borrowing money from your 401(k) typically includes a repayment schedule (five years for a short-term loan), plus interest.

You can use the money for almost anything, but your plan’s administrators will let you know of any restrictions. Most people can borrow up to 50 percent of their vested amount, or $50,000 – whichever is less. Being “vested” means you have worked for your employer long enough to reap the benefits of their employee-contribution matching (they will deposit a certain amount of money per your contributions). Each employer sets their own limits (usually three to five years), so if you quit before that time, you won’t be able to roll over all those earnings.

To learn about 401(k) loans as they apply to your plan, consult the financial institution that holds your savings. If you haven’t already set up an online profile for managing these funds, ask your employer’s human resources manager or accounting personnel for help.

Even with interest, the Fed says 401(k) loans are better than the high-interest rates of credit cards and other consumer loans. If each household used a 401(k) loan to pay off these debuts, they could each save almost $300 per year, according to the Fed, or 20 percent less than they are paying without the 401(k) loan. All told, those savings mean U.S. consumers could have saved $5 billion in 2007, the Fed estimates.

Bob Mullins, a volunteer educator with Consumer Credit Counseling Service of Mid-Oregon, suggests consumers think twice before dipping into their retirement.

“I would never suggest that a person borrow from his or her 401(k),” Mullins said.

And here’s why:

• If you lose your job you have to pay back the borrowed money in a very short time, usually 60-90 days, or you will have to pay taxes and a penalty on the amount that isn’t repaid in time.

• You have to pay back the loan with after tax dollars, and then you’re taxed when you withdraw the money, thus you’re double taxed on the money you borrow.

• Finally, you’re stealing from your retirement, and most people don’t save enough for retirement as it is.

The Fed anticipated some of these issues, asking consumers to consider the following questions before borrowing that money:

• If you did not borrow from your 401(k), would you borrow that money from some other source (e.g., credit card, auto loan, bank loan, home-equity loan, etc.)

• Would the after-tax interest rate on the alternative (non-401(k)) loan exceed the rate of return you can reasonably expect on your 401(k) account over the loan period?

• Would you be able to make your 401(k) loan payments without reducing your regular 401(k) contributions?

• Are you comfortable with the requirement to repay any outstanding loan balance within 90 days of separating from your employer, or pay income tax and a 10 percent penalty on the outstanding loan?

If you answer “no” to any of those questions, the Fed suggests you consider other options.