If someone met the criteria of a “qualified individual” under CARES, and they wanted/needed to take the $100,000 out of their 401(k), what advantages would a loan from the plan have over a straight-up withdrawal?

For the sake of argument, let’s assume that the participant could and would pay back the withdrawal within the three-year window. Let’s also set aside the loss of compounding tax-deferred gains on the money, as that problem is present in either option anyway.

The “pro”s I can think of for the loan are: a.) no 1099R issued; b.) a longer window to put the money back in; and c.) if the plan doesn’t allow a COVID-19 withdrawal, you probably still have access to a loan option.

The “pro”s I can think of for the straight-up withdrawal are: a.) the flexibility to put the money back in (contribution, rollover/transfer) on whatever schedule you want; and b.) no interest accruing on the withdrawal.

Am I missing anything big – pro or con – for either option?

Thx.