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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  |  131 Followers
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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 151 Comments   |  Flag   |  Jun 25, 2012 from Amesbury, MA
Richie

My name is Richie Julie. I live in Berlin Germany and i am a happy woman today? and i told my self that any lender that will rescue my family from our poor situation, i will refer any person that is looking for loan to him,

They gave happiness to me and my family, i was in need of a loan of $20,000.00 to start my life all over as i am a single mother with 2 kids I met this honest and GOD fearing company that help me with a loan of 20,000.00 Euro with interest rate of 3% ,They are GOD fearing And Trustworthy

If you are in need of loan and you are sure you will pay back the loan please contact them On europeanloancompany2@gmail.com or whatsapp/call : +33751432942 And they are located in European part of the world.

Flag |  Jul 09, 2019
Richie

My name is Richie Julie. I live in Berlin Germany and i am a happy woman today? and i told my self that any lender that will rescue my family from our poor situation, i will refer any person that is looking for loan to him,

They gave happiness to me and my family, i was in need of a loan of $20,000.00 to start my life all over as i am a single mother with 2 kids I met this honest and GOD fearing company that help me with a loan of 20,000.00 Euro with interest rate of 3% ,They are GOD fearing And Trustworthy

If you are in need of loan and you are sure you will pay back the loan please contact them On europeanloancompany2@gmail.com or whatsapp/call : +33751432942 And they are located in European part of the world.

Flag |  Jul 09, 2019

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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 110 Comments   |  Flag   |  Jun 19, 2012 from Green Bay, WI
Shaw

HOW I RECEIVED A LOAN FROM SHAW LOCKWOOD.

I am Shaw Lockwood by name, I want to use this medium to alert all loan applicants to be very careful because there are scams everywhere. A few months ago I was very nervous and due to my desperation I was scammed by several online lenders.

I had almost lost hope until a friend of mine referred me to a very reliable lender called Mr. Steve Money (a God fearing) who lent me a loan of 145,000 euros in 72 hours of work without any stress. I explain to the company by mail and all they told me was not to cry anymore because I will get my loan from this company and I have also made the right decision to contact them. I filled out the loan application form and proceeded with everything that was requested of me. and to my surprise they gave me the loan.

If you need any type of loan, contact him now through: unitedloanservice@yahoo.com

I am using this medium to alert all loan seekers through the hell I passed into the hands of those fraudulent lenders.

Thank you United Loan Service for your help.

Flag |  Jun 11, 2019
Richie

My name is Richie Julie. I live in Berlin Germany and i am a happy woman today? and i told my self that any lender that will rescue my family from our poor situation, i will refer any person that is looking for loan to him,

They gave happiness to me and my family, i was in need of a loan of $20,000.00 to start my life all over as i am a single mother with 2 kids I met this honest and GOD fearing company that help me with a loan of 20,000.00 Euro with interest rate of 3% ,They are GOD fearing And Trustworthy

If you are in need of loan and you are sure you will pay back the loan please contact them On europeanloancompany2@gmail.com or whatsapp/call : +33751432942 And they are located in European part of the world.

Flag |  Jul 09, 2019

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2 votes

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 176 Comments   |  Flag   |  Jun 19, 2012 from Lititz, PA