What is my 401k loan payment?
Type your vested balance, the amount you want, your plan’s rate, the term and how often you are paid. The 401k loan calculator checks the IRS limit and shows the payment per paycheck, the interest you pay back into your account, and every payment.
- Payment per paycheck
- $189.09
You repay $189.09 per paycheck, 130 payments, with $4,582.33 of interest back into your account.
- Most you can borrow now
- $30,000.00
- Total interest
- $4,582.33
- Total repaid
- $24,582.33
- Number of payments
- 130
- Months
- 130
Payment per paycheck: $189.09. You repay $189.09 per paycheck, 130 payments, with $4,582.33 of interest back into your account.
How fast is the loan paid back?
Every payment
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes the most you can borrow from a 401(k) under the IRS limits, the level payment per paycheck at your plan’s rate, the interest you pay back into your account, and the payment schedule.
Example with the default inputs (Vested balance $60,000.00, Loan amount $20,000.00, Interest rate 8.5%, Repayment term (years) 5, Payments per year Every 2 weeks, Loan to buy my main home No): You repay $189.09 per paycheck, 130 payments, with $4,582.33 of interest back into your account.
Method: Limit = min($50,000 − (highest balance in 12 months − current balance), max($10,000, vested ÷ 2), vested) − current balance; payment = P·r ÷ (1 − (1 + r)^−n) with r = rate ÷ payments per year and n = years × payments per year.
- The IRS limits under IRC 72(p); your plan may lend less or not at all, and may not use the $10,000 rule.
- A loan never exceeds your vested balance.
- Level payments each period with interest on the unpaid balance; the last payment clears the balance.
- The rate is the one your plan charges (type it); no live rates.
Worked examples
Each example is checked against the calculator on every build.
- Vested balance $40,000.00, Loan amount $20,000.00, Interest rate 8.5%, Repayment term (years) 5, Payments per year Monthly, Loan to buy my main home no gives Most you can borrow now $20,000.00, Payment per paycheck $410.33, Number of payments 60.Source: IRS, Retirement Plans FAQs regarding Loans (the lesser of the greater of $10,000 or 50% of the vested balance, or $50,000; $40,000 vested gives $20,000; repay within 5 years, at least quarterly, in substantially equal payments), https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans
- Vested balance $150,000.00, Loan amount $50,000.00, Interest rate 7%, Repayment term (years) 5, Payments per year Every 2 weeks, Loan to buy my main home no gives Most you can borrow now $50,000.00, Payment per paycheck $456.35, Number of payments 130.Source: IRS, Retirement Plans FAQs regarding Loans ($50,000 maximum), https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans; IRC 72(p)(2)
- Vested balance $100,000.00, Loan amount $10,000.00, Interest rate 0%, Repayment term (years) 1, Payments per year Monthly, Loan to buy my main home no, Plan loans you owe now $10,000.00, Highest loan balance in the last 12 months $30,000.00 gives Most you can borrow now $20,000.00, Payment per paycheck $833.33, Total interest $0.00.Source: IRS, Retirement Plans FAQs regarding Loans ($50,000 reduced by the highest outstanding balance in the preceding 12 months minus the current balance; a new loan plus outstanding loans cannot exceed the maximum), https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans
How it works
The limit (IRC 72(p) as the IRS states it), with V the vested balance, O what you owe the plan now and H the highest balance in the past 12 months (taken as at least O):
- cap = $50,000 − (H − O)
- limit for all loans = the least of cap, the greater of $10,000 and V ÷ 2, and V (a loan never exceeds the vested balance)
- most you can borrow now = limit for all loans − O, and never below $0
The payment. r = yearly rate ÷ 100 ÷ payments per year (12, 24, 26 or 52); n = years × payments per year. Payment = P × r ÷ (1 − (1 + r)⁻ⁿ), or P ÷ n at a 0% rate.
The schedule. Each period: interest = balance × r; principal = payment − interest; balance = balance − principal. The last payment pays whatever is left, so the principal adds up to the loan exactly. Nothing is rounded between payments. Total interest is the sum of the interest column; total repaid = loan + total interest; the year column is the payment number ÷ payments per year.
Rules. The loan may not be more than the most you can borrow now, and a term over 5 years needs the main-home box ticked. Either one gives no answer and a message (with the limit in dollars). The loan is from $1 to $50,000, the term from 1 to 30 whole years, the rate from 0% to 30%.
Output format. Money shows in dollars and cents, rounded half up. Payment counts are whole numbers.
Assumptions
- The IRS limits; your plan may lend less, may not use the $10,000 rule, or may not offer loans.
- Level payments every period for the whole term, by payroll deduction.
- You type your plan’s rate; nothing is looked up.
Worked examples by hand
IRS example: $40,000 vested. Greater of $10,000 and $20,000 = $20,000, under $50,000, so $20,000. Borrowed at 8.5% monthly for 5 years: r = 0.085 ÷ 12, n = 60, payment $410.33, 60 payments.
$150,000 vested, $50,000 at 7%, every 2 weeks for 5 years. Half the balance is $75,000, so the $50,000 cap applies. r = 0.07 ÷ 26, n = 130: payment $456.35.
$100,000 vested, owing $10,000 after a high of $30,000. Cap = 50,000 − (30,000 − 10,000) = $30,000; less the $10,000 owed = $20,000 available. A $10,000 loan at 0% over 1 year is 10,000 ÷ 12 = $833.33 a month, $0 interest.
Other questions people ask
How much can I borrow from my 401(k)?
The IRS allows the lesser of $50,000 or the greater of $10,000 and half your vested balance. With $40,000 vested you can borrow up to $20,000. The $50,000 is reduced if you had a plan loan in the past 12 months, and your plan may set lower limits or offer no loans.
How long do I have to repay a 401(k) loan?
Up to 5 years, in substantially equal payments of principal and interest made at least every quarter. A loan to buy your main home may run longer, as your plan allows.
Where does the interest go?
Back into your own 401(k) account. You still pay it from after-tax pay, and the money you borrowed is not invested while it is out.
How is the payment worked out?
Like any level-payment loan: P × r ÷ (1 − (1 + r)⁻ⁿ), where r is the yearly rate divided by the payments per year and n is the number of payments. $20,000 at 8.5% repaid monthly over 5 years is $410.33 a month.
What if I already have a 401(k) loan?
A new loan plus what you still owe cannot pass the limit, and the $50,000 is cut by the amount your highest balance in the past 12 months was above today’s. Owe $10,000 now after a high of $30,000, and the cap is $50,000 − $20,000 = $30,000, so a new loan can be up to $20,000.
What happens if I leave my job?
Many plans ask you to repay the balance soon after you leave. An unpaid balance can be treated as a distribution, which is taxed and may also owe an early-withdrawal tax. Check your plan’s rules.