Generally, you have to include any previously untaxed amount of the distribution in your gross income for the year in which the distribution occurs. You may also have to pay an additional 10 percent tax on the amount of the taxable distribution, unless you:
1.Are age 59 1/2 or older, or
2.Qualify for another exception to this additional 10 percent tax.

Any unpaid loan amount also means you will have less money saved for your retirement.
Remember, your 401(k) plan is designed so you can save money while working for your retirement. So, before borrowing from your future, carefully consider all other alternatives.