Home  >  Financial Articles and Q&A  >  I already have an existing loan from my 401k plan,I need...

I already have an existing loan from my 401k plan,I need cash but can I still get money out of my account?

Jun 18, 2012 by lorena from Brownsville, TX in  |  Flag
3 Answers  |  28 Followers
Follow Question
4 votes

While your plan offers you the option to borrow, you need to be aware of any restrictions put in place by the plan administrator. Such information may be found on the administrator website or in the plan's summary document available from the administrator or possibly your HR representative.

Generally, if the plan allows loans, the rule is you can borrow up to 50% of your vested balance to a maximum of $50,000 IF you had no other plan loan in place in the 12 month period ending on the day you apply for the loan.

In your case where you have a plan loan outstanding, then the new loan is limited. It is the lesser of 50% of the vested account balance or $50,000 minus the outstanding loan balance in the preceding 12 months.

In addition to the minimum loan amount noted previously, your plan administrator may restrict the reason for the loan to a list of approved reasons (for example, uninsured medical expenses, college tuition, purchase of a primary residence).

Just because you can get a loan from your 401k doesn't mean that you should. Sure, it is convenient, fast and relatively inexpensive. Yes, you are "paying yourself" for the borrowed money and not a credit card company or bank. Yes, the interest is tax-sheltered and there is no tax consequence for receiving funds as long as you pay it back.

But if you are nearing retirement, may be changing jobs or are facing a lay-off in the near future, need the proceeds for meeting daily living expenses (as opposed to some extraordinary or large capital expense) or are using your 401k like a piggy bank to buy luxury items or pay for a vacation, then the answer is simple: Don't do it.

View all 21 Comments   |  Flag   |  Jun 25, 2012 from Amesbury, MA
Anthony

Good day
Do you need loan to settle your debt or pay off your bills or start a nice business? Do you need funds to finance your project? We Offers guaranteed loan services of any amount and to any part of the world for (Individuals, Companies, Realtor and Corporate Bodies) at our superb interest rate of 3%. For application and more information send replies to the following E-mail address: quickcashinvestment2933@gmail.com

Thanks

Flag |  4 days ago
Anthony

Good day
Do you need loan to settle your debt or pay off your bills or start a nice business? Do you need funds to finance your project? We Offers guaranteed loan services of any amount and to any part of the world for (Individuals, Companies, Realtor and Corporate Bodies) at our superb interest rate of 3%. For application and more information send replies to the following E-mail address: quickcashinvestment2933@gmail.com

Thanks

Flag |  4 days ago

1|600 characters needed characters left
3 votes

By regulation you can borrow up to $50,000 or 50% of your current account value which ever is less. You will need to contact your plan administrator to determine if your plan allows it.

View all 12 Comments   |  Flag   |  Jun 19, 2012 from Green Bay, WI
Sharon

Hi Everyone, I would like to talk about something that I am just very excited about; I had a small restaurant and in my apartment I had a bad credit. It became very though for my family, because people do not want to loan; banks and other financial institution do not want to loan money to us due to bad credit. So I needed to find someone that was very lenient and also could pay really quick to us. We wanted to add on to our restaurant in other words we needed an $80,000 loan which was really difficult at that time. So a friend of mine 'Sarah William' said checkout: tenterdenfundsplc@yahoo.com or tenterdenfundsplc@outlook.com. I was like okay.. because I already lost $4,300 to scams, I didn't want to get scammed again. and she said' just email or call/ text: +18027369174, On a second thought i took the risk and applied for the loan. That day I got a response, luckily for me I got funded, I was overwhelmed and I couldn't believe how quick it was. I now own a home, my business has expanded and I have a decent credit. Anyways thank you guys at Tenterden Funding Plc. I couldn't have done it without you, thank you for saving us the hassle.

Flag |  Feb 12, 2017
Anthony

Good day
Do you need loan to settle your debt or pay off your bills or start a nice business? Do you need funds to finance your project? We Offers guaranteed loan services of any amount and to any part of the world for (Individuals, Companies, Realtor and Corporate Bodies) at our superb interest rate of 3%. For application and more information send replies to the following E-mail address: quickcashinvestment2933@gmail.com

Thanks

Flag |  4 days ago

1|600 characters needed characters left
1 vote

Some plans may offer more than one loan at a time, and usually a loan minimum of $1000.00 As Tony mentioned, your plan administrator will be able to guide through this process.

View all 26 Comments   |  Flag   |  Jun 19, 2012 from Lititz, PA
Anthony

Good day
Do you need loan to settle your debt or pay off your bills or start a nice business? Do you need funds to finance your project? We Offers guaranteed loan services of any amount and to any part of the world for (Individuals, Companies, Realtor and Corporate Bodies) at our superb interest rate of 3%. For application and more information send replies to the following E-mail address: quickcashinvestment2933@gmail.com

Thanks

Flag |  4 days ago
Anthony

Good day
Do you need loan to settle your debt or pay off your bills or start a nice business? Do you need funds to finance your project? We Offers guaranteed loan services of any amount and to any part of the world for (Individuals, Companies, Realtor and Corporate Bodies) at our superb interest rate of 3%. For application and more information send replies to the following E-mail address: quickcashinvestment2933@gmail.com

Thanks

Flag |  4 days ago

1|600 characters needed characters left