# What is my 401k loan payment?

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.

- Page: https://www.acalculator.org/finance/401k-loan-calculator
- JSON spec: https://www.acalculator.org/finance/401k-loan-calculator.json
- Version: 5bda0ebffe28

## Default answer

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.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| vested | Vested balance | The part of your 401(k) balance that is yours to keep. |
| amount | Loan amount | How much you want to borrow. |
| rate | Interest rate | The yearly rate your plan charges, often the prime rate plus 1 or 2 points. |
| years | Repayment term (years) | Up to 5 years, or longer for a loan to buy your main home. |
| per | Payments per year | How often you repay, usually by payroll deduction each paycheck. |
| home | Loan to buy my main home | A loan to buy your principal residence may be repaid over more than 5 years. |
| owe | Plan loans you owe now | The balance of any loans you already have from the plan. Leave empty for none. |
| high | Highest loan balance in the last 12 months | The highest you owed the plan at any time in the past 12 months. Leave empty for none. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| payment | Payment per paycheck | The level payment each period. |
| limit | Most you can borrow now | The IRS limit for a new loan, less what you already owe the plan. |
| interest | Total interest | All the interest, which goes back into your 401(k). |
| total | Total repaid | Loan amount + total interest. |
| count | Number of payments | Years × payments per year. |

## 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.

## Assumptions

- 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

1. vested = $40,000.00, amount = $20,000.00, rate = 8.5%, years = 5, per = 12, home = no gives limit = $20,000.00, payment = $410.33, count = 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.
2. vested = $150,000.00, amount = $50,000.00, rate = 7%, years = 5, per = 26, home = no gives limit = $50,000.00, payment = $456.35, count = 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).
3. vested = $100,000.00, amount = $10,000.00, rate = 0%, years = 1, per = 12, home = no, owe = $10,000.00, high = $30,000.00 gives limit = $20,000.00, payment = $833.33, 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.

## FAQ

### 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.

## Sources

- IRS, Retirement Plans FAQs regarding Loans (a plan may permit loans up to the lesser of the greater of $10,000 or 50% of the vested account balance, or $50,000 reduced by the highest outstanding balance in the preceding 12 months minus the current balance; $40,000 vested allows $20,000; repay within 5 years unless the loan buys a principal residence; substantially equal payments of principal and interest at least quarterly; a new loan plus outstanding loans cannot exceed the maximum). https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans (retrieved 2026-10-02)