Normally, the interest payable is equal to the current prime lending rate, plus a percentage point or two. When is it a good idea to borrow from a k plan? Still, if you absolutely must borrow from your k plan in the event of a financial emergency, at least do it for the right reasons, and handle the entire k loan experience correctly — without getting the IRS involved and without gutting your k plan. By Bill Hardekopf. Debt Management.