Welcome! | Ask A Question
Asked 4/12/2010
|
401K loan I have a loan on my 401K. I pay $250 per pay period (evey other wk). As of 1/1/2010 my company stopped adding our contributions/loans to our accounts as they were switching 401K carriers. The new accounts have been started as of 4/1/2010. Since I am only making loan payments right now my money has not been added to our new 401k account. I was told by my employer that when the final paperwork is signed and the old money is rolled over my loan will rollover and all my payments since 1/1/2010 will be deposited. In the meantime my money is not earning anything since the employer is holding on to it. Is it legal for this to go on for so long. I have made 7 loan payments since the beginning of the year with number 8 coming this week. Do I have recourse? Please advise |
Answer 1/2 - Submitted 4/12/2010
This seems like an extremely long time for them to hold. Call both the old and new 401K companies and see if there is a glitch in the system somehow because you are taking out a loan.
As to whether it is legal or not, it will depend on the terminology and clauses in the 401K contract and the employers own polices regarding the 401K. Since they are administering it for you and if they are doing it to the best of their ability, I don't think they can be held responsible.
Answer 2/2 - Submitted 4/16/2010
Yes you can borrow on 401(k) loans, the rates will be comparable to other loans, but there are no regulations on what can be charged for loans, although federal rules do require plans to charge a "reasonable" interest rate.
Most companies usually make it easy to repay the loan, and will deduct the payments from your paycheck, and the money goes back into your account.
The restrictions on how much you can borrow and on the length of time to repay the loan, it can't be larger than $50,000 or half the balance of your account, whichever is smaller, and it must be repaid within five years, unless used for a home purchase which will allows you to pay out in 10 to 30 years.
Type your Answer in the box below and post your answer.
Related Questions (Ask a New Question)
My position was abolished. i have a loan balance of approx $10,000.00. i wanted to rollover my 401k, but noticed that the loan balance is being taken away from my 401k balance. should i roll over my 401k or wait until the 60 days has lasped? or does it not matter? im trying to find the cheapest...
The company i work for is looking into firing the company that handles our 401k and instead having everyone roll their 401k money into self-managed stocks. however, i have an outstanding 401k loan that i'm only 12 months into paying. how is the company's decision going to affect me? currently...
I have a 401k loan through my employer. i'd like to refinance that loan. the 401k advisor and my hr person is stating that the new loan period is determined by an old date of a dead loan (settled). how can they do that? once a loan is paid off, which that one was, it is considered "dead".
|
My position was abolished. i have a loan balance of approx $10,000.00. i wanted to rollover... |
|
Company stopping 401k program, but i have a 401k loan The company i work for is looking into firing the company that handles our 401k and instead... |
|
I have a 401k loan through my employer. i'd like to refinance that loan. the 401k advisor... |
|
My husband had a outstanding loan on his 401k. he took out another 401k loan and used part... |
|
Question, i have a 401k loan and wanted to know if i cash in my 401k does the loan get paid... |
|
I rolled over my 401k and a 401k loan that was with my previous company which was sold last... |
Ask A Question
Ask a new question about
401k:
About
| Contact Us
| Membership Agreement
| Privacy Policy
| Site Map
| Advertise on this Site
Copyright © 401kQuestions.net 2012. All rights reserved.