401(k) Loan Calculator
See how much you can borrow from your 401(k), what each paycheck repayment will be, and how the loan could affect your retirement balance.
How 401(k) loans work
A 401(k) loan lets you borrow from your own retirement account and repay yourself, with interest, through payroll deductions. Not every plan offers loans, and plans can set stricter rules than the IRS, so check your plan's summary description.
How much can you borrow?
Under IRS rules, the maximum is generally the lesser of $50,000 or 50% of your vested balance. Plans may also allow up to $10,000 even if that's more than half your balance. (The $50,000 cap is also reduced by your highest outstanding loan balance in the prior 12 months, which this calculator doesn't model.) General-purpose loans must be repaid within five years; loans used to buy a primary home can have longer terms.
The real cost: lost growth
The interest you pay goes back into your account, so it isn't lost — but the money you borrowed is out of the market while you repay it. The balance impact estimate compares leaving the money invested at your expected return with taking the loan and investing each repayment as it comes in. If the market does better than your loan rate, the loan costs you; if it does worse, it can come out roughly even.
Watch out if you leave your job
If you separate from your employer, an unpaid loan balance is generally treated as a distribution unless you repay it by your tax return due date (including extensions) for that year — which can mean income tax and, if you're under 59½, a 10% early withdrawal penalty.
Frequently asked questions
Is a 401(k) loan better than a personal loan?
It can be cheaper and doesn't require a credit check, but it puts retirement savings at risk if you leave your job and costs you market growth. Compare it with the payment and total cost from our personal loan calculator.
Is 401(k) loan interest tax-deductible?
Generally no. And because you repay the loan with after-tax paycheck dollars, that money is effectively taxed again when you withdraw it in retirement (for a traditional 401(k)).
Can I keep contributing while I repay the loan?
Usually yes, and it's wise to keep contributing at least enough to get your full employer match, if your budget allows.
What happens if I miss payments?
A loan that goes into default under your plan's rules is typically treated as a taxable distribution, possibly with a 10% penalty if you're under 59½.