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Old 01-28-2019, 11:13 AM
 
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I currently have a 401k loan I am planning paying off to take out another. My vested balance is $30000 (including the loan when it is paid off) and my highest loan balance in last 12 months is $7000. My question is what amount will I be eligible to take out after I pay off my current loan? Approx $15000? Is the highest loan balance in last month - $7000 - only relevant to the max you can take out - $50000? Or do I subtract $7000 from half of my vested balance -$15000?
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Old 01-28-2019, 11:51 AM
 
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Call your benefits people as they are the only ones who can 100% answer the question. It’s most likely 1/2 of the vested total up to 50k where applicable
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Old 01-28-2019, 02:31 PM
 
Location: on the wind
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IMHO I would be looking for ways to avoid taking these loans in the first place.
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Old 01-28-2019, 02:50 PM
 
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if one can't afford to do something without pulling from another front then my opinion is you can't afford to do it ...

you get taxed 2x on the interest you pay too as well as give up gains on the borrowed money .
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Old 01-28-2019, 05:33 PM
 
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I second what Mathjak and Parnassia said.
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Old 01-28-2019, 07:10 PM
 
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That's fine I wasn't asking for financial advice I was wondering how they figure out how much you can take out for a loan once one has been paid off
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Old 01-28-2019, 09:09 PM
 
Location: Florida
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401k loans are bad and you should try and avoid the need for loans if you can.
The loan rules are part of your individual plan. My guess is no more than 50% of your vested value but there could be some restrictions on repeat borrowing.
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Old 01-29-2019, 03:28 AM
 
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i had a 401k loan out years ago and my company went out of business .. i owed the entire amount lump sum .

my co-worker went and bought a new car with a 401k loan . now when the loan was called he could not get any loan deal on the car close to what he could have had day 1 when he bought the car .

Last edited by mathjak107; 01-29-2019 at 04:21 AM..
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Old 01-29-2019, 10:41 AM
 
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It's really hard to figure out because it's a combination of IRS rules and company policy.

The IRS rules have been relaxed regarding having to pay back the loan in a lump sum so it may not as bad a deal as it used to be.

I would dig into the benefits manual...
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Old 01-29-2019, 12:41 PM
 
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Quote:
Originally Posted by steveo2155 View Post
That's fine I wasn't asking for financial advice I was wondering how they figure out how much you can take out for a loan once one has been paid off
I think I can speak for many of us when we say we're sorry for giving unsolicited advice...it's just so many of us have seen people commit financial suicide and/or go nowhere financially with this sort of behavior. We find it frustrating to watch. We don't know your specific case, but it's akin to watching someone with an alcohol or drug problem and not saying anything (because it won't do any good). We know we shouldn't but it's tough to do!
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