Check the Summary Plan Description under My Documents to see if your 401(k) plan allows you to take out a loan.
If your 401(k) plan allows loans, follow the below instructions to take out a loan.
Instructions to take a loan from your account:
If your 401(k) allows loans, it'll have Loan Procedures at the end of the Summary Plan Description that explains your plan's specific loan rules.
Most 401(k) plans have the following requirements:
Maximum loan amount of 50% of your vested account balance, up to $50,000.
Maximum 1 loan outstanding at a time.
Minimum loan amount of $1,000.
If you satisfy your 401(k)'s loan requirements, complete the loan-form.pdf and email to [email protected]
Loan Repayments:
Loans must be repaid through payroll deductions every pay period.
You have the option of repaying your loan over 1-5 years.
Your repayments will depend on the loan amount, how many years you choose to repay it over, and your payroll schedule.
Each 401(k) has different rules for the interest rate, but it is generally the current Prime Rate + 0-2%.
Repayments typically start a month from the date you submit your Loan Request Form.
Once your form has been received, you'll receive a confirmation email and your loan will go through the review process.
Once the review is complete, you and your plan's Trustee or Administrator will be sent the Loan Agreement and Repayment Schedule to Docusign.
Your loan will be issued about 1 week after the Loan Agreement has been Docusigned by both you and your plan's Trustee or Administrator.
Termination of Employment:
Once you leave your employer, you have the option to repay the outstanding loan balance in full by the last day of the calendar quarter after the first missed scheduled repayment.
If you don't repay the outstanding balance in full by the last day of the calendar quarter after the first missed scheduled repayment, your loan will be considered a "Deemed Distribution".
The outstanding balance will be considered a 401(k) distribution and will be subject to income taxes and any early withdrawal tax penalties in the year the deemed distribution takes place.
You'll receive a 1099-R for the year the deemed distribution took place.
Important notes
Please ensure you include all the information the form asks.
Please note, there may be delays in processing if specific information is not included or if any information is incorrect or incomplete. In cases where information is incorrect or incomplete, it may be returned to you.
Processing typically takes about 2 weeks, though these timelines can vary.
Please contact [email protected] if there's an issue or you have any questions.