Unless you want to pay the 10 percent penalty for early withdrawl you will have to pay the loan back. Also, by closing out the account early you will pay a 10 percent tax. 401k's are money put into an account before taxes. Even though it is your money you are required to pay taxes on it A roth Ira is a retirement account using money that you have aready payed taxes on.

You can close the account. The loan will default because you can only make payments to traditional loans through payroll. If you 15k out included in the 20 k, you are not going to get nuch. If you close the account they will deduct the outstanding loan balance from your entire vested balance, and withhold 20% federal taxes on the defaulted loan amount and any monies paid directly to you. So on 15k, the federal tax will be 3000- You can roll the remainder of your balance into an IRA or new plan, but unless you pay the loan back in full before the plan terminates, expect to pay the 20% federal tax, 10% early withdrawal penalty if you are under retirement age, and state tax in some states.

The response answered my question.

That was a good response answer to the question very direct and informative