Money tools
Should I take a 401(k) loan?
A 401(k) loan pays its interest back into your own account, so the rate is not the real cost. The cost is the growth the money misses while it is out, and the risk of a tax bill if you leave your job before it is repaid. See both, and how it compares with borrowing elsewhere.
The loan
Your plan sets it; often prime plus 1 or 2.
Up to 5 years.
Your account
A year, on what the money is invested in now.
Some people cut contributions to afford the repayments; ask your plan whether it restricts them during a loan.
Borrowing elsewhere instead
Leave any blank to skip it. A card here means paying it down on a fixed schedule.
If you leave your job
Enter the amount, your vested balance, the plan's rate and the term.
Rules to know
Your plan may not offer loans. Plans can, but do not have to; check the Summary Plan Description or ask the plan administrator. IRAs cannot lend at all.
The limit. Half your vested balance or $50,000, whichever is less. If half your balance is under $10,000 your plan may let you borrow up to $10,000, but it does not have to. Earlier loans in the past year can lower the limit.
Repaying. Generally within 5 years, with payments at least quarterly, usually through payroll. A loan to buy your main home can run longer. Repayments come out of take-home pay, because they are not plan contributions.
Missing payments turns the unpaid balance into a taxable distribution, which may also carry the 10% additional tax.
All four happen in your browser. Your figures are not sent anywhere — the email opens in your own mail app, already filled in.
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