Plan a loan from your 401(k). Enter your vested balance, loan amount, rate and term to see the payment for your pay schedule, the maximum the IRS lets you borrow, the interest you pay back into your own account and the investment growth you miss while the money is out.
Last updated:
Your 401(k)
$
Only the vested part counts toward the limit.
$
Reduces the $50,000 cap. 0 if none.
Loan
$
%
Most plans charge prime + 1%.
years
Up to 5 years; longer allowed for buying a main home.
Opportunity cost
%
What the borrowed money would have earned in the market.
Enter your values to see the result.
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How to use the 401(k) Loan Calculator
Enter your vested 401(k) balance and any loan balance you had in the last 12 months.
Enter the loan amount, rate and term. Plans usually charge prime + 1% for up to 5 years.
Pick how often you are paid, since repayments come out of each paycheck.
Set an expected investment return to measure the growth you give up.
Read the payment, maximum loan, interest and lost growth, then check the yearly schedule.
401(k) loan rules at a glance
Rule
Limit (IRC section 72(p))
Maximum loan
Lesser of $50,000 or 50% of vested balance (up to $10,000 allowed when 50% is less)
Prior loans
$50,000 is reduced by the highest outstanding loan balance during the past 12 months
Term
5 years for general loans; longer for buying a principal residence
Payments
Level amortization, at least quarterly (usually every paycheck)
Interest rate
Set by the plan, commonly the prime rate + 1%
Default
Missed payments past the cure period become a taxable deemed distribution
How the opportunity cost is measured
The calculator follows two versions of your account until the loan is paid off:
Without the loan: the whole vested balance grows at your expected return.
With the loan: the balance minus the loan grows at that return, and each payroll repayment (principal + interest) is deposited back and starts growing. The outstanding loan is counted as an asset of the account.
The difference at payoff is the growth you give up. When markets return less than the loan rate, the gap can be negative, meaning the loan actually came out ahead. Future contributions are left out of both versions, because they are the same either way, unless you stop contributing while repaying, which makes the real cost higher.
Biweekly payment per $10,000 borrowed
Rate
1 year
3 years
5 years
7%
$398.75
$142.31
$91.27
8%
$400.80
$144.40
$93.45
9%
$402.85
$146.51
$95.66
Payment uses 26 payments a year: P = 10,000 × r ÷ (1 − (1 + r)−n) with r = rate ÷ 26.
Tips before you borrow
Keep contributing while you repay so you don't lose your employer match.
Borrow only what you need and pick the shortest term you can afford.
Think about job security: leaving or losing your job can make the balance due quickly.
Federal rules cap a 401(k) loan at the lesser of $50,000 or 50% of your vested balance. If half your balance is under $10,000, a plan may let you borrow up to $10,000. The $50,000 cap is reduced by your highest outstanding loan balance in the past 12 months. Your plan can set lower limits or not offer loans at all.
How is the 401(k) loan payment calculated?
It is a standard amortizing payment: P = L × r ÷ (1 − (1 + r)^−n), where L is the loan, r is the yearly rate divided by the number of paychecks a year, and n is the total number of paychecks in the term. Payments must be at least quarterly and are normally taken by payroll deduction.
Do I pay interest to myself?
Yes. The interest goes back into your own 401(k) account, not to a bank. However, you repay it with after-tax pay, and that money is taxed again when you withdraw it in retirement.
What is the real cost of a 401(k) loan?
The main cost is opportunity cost. The borrowed money is out of the market and only earns the loan rate. If investments return more than the loan rate during the loan, your account ends up smaller than it would have been. The calculator shows that gap at payoff.
What happens if I leave my job with a 401(k) loan?
Most plans require the remaining balance to be repaid when you leave. If you don't, the unpaid amount becomes a loan offset distribution: it is taxed as income and, before 59½, may get the 10% penalty. You have until your tax return due date, including extensions, to roll that amount into an IRA to avoid the tax.
How long can a 401(k) loan last?
General-purpose loans must be repaid within 5 years. Loans used to buy your main home can have a longer term set by the plan, often 10 to 15 years or more.
Is a 401(k) loan better than a withdrawal?
Usually, if you can repay it. A loan has no tax or penalty when repaid on time, while an early withdrawal is taxed as income and often penalized 10%. Compare both with the 401(k) early withdrawal calculator.
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