Borrowing Against 401(k) Account

Added March 23, 2009 by Ilyce R. Glink

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Summary: Not all employers allow employees to borrow money against their 401(k) account. If you want to borrow money against your 401(k), the person at your job who deals with benefits can help you do it. Most companies have rules for how much you can borrow from your 401(k), as well as the interest rate and payback schedule.

Q: How can I borrow against my 401(k) savings?

A: If your company will allow you to borrow against your 401(k) account, and not every company does, you should go to the person who heads up these benefits and ask for information on how to do it.

You'll need to see the company rules that tell you how much you can borrow, at what interest rate, and what happens if you are fired or quit your job while you have this loan outstanding. Typically, the funds would have to be paid back within 60 days.

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