Is it a good idea to borrow money to pay off a loan?

This depends on the nature of your existing loan and where you are going to borrow money from. The safest course, really, is to NOT borrow more money and not add on to your existing debt. However, there are cases wherein it may be smarter to borrow money to get rid of an existing debt.

One such case would be if you have a credit card debt which is accumulating interest at astronomical rates. If you can get a personal loan at a much lower rate so that you can pay your credit card debt in full, you will be making a smart financial decision.