In certain circumstances, Guideline permits you to take a loan against your 401(k) balance, subject to fees. You will have to pay back the loan with interest, but the interest goes back into your account for your benefit. We strongly discourage taking a loan unless you have already exhausted other alternatives, as you will be directly cutting into your retirement savings.
Contact email@example.com if you'd like to apply for a loan.
You may request a Participant loan from all your accounts by contacting firstname.lastname@example.org. Loans are available to Participants on a reasonably equivalent basis. Loans will be made to Participants who are creditworthy. Guideline may request that you provide additional information, such as financial statements, tax returns and credit reports to make this determination.
Amount of Loan
A loan cannot be greater than 50% of your vested account balance under the Plan. Additionally, the loan cannot exceed $50,000 minus the difference between the highest outstanding balance of loans in the past 12 months and the outstanding balance of loans from the Plan on the date the loan is made.
The minimum loan amount is $1,000.
Loans must be paid in equal payments over a period not extending beyond five years from the date of the loan. Loan repayments will be made through payroll deduction every pay period.
If you go on a leave of absence you may be able to suspend loan repayments. Please contact email@example.com to determine whether your leave of absence qualifies. You must repay a loan in accordance with the repayment schedule or you may make a full or partial prepayment. Loan repayments will be made each pay period. You may not refinance your loan. Loans are due and payable upon the occurrence of a distributable event, such as termination of employment, disability or death.
You will be charged an interest rate equal to 1 percentage point above the prime rate for any loan received from the Plan. You must pay back the loan with interest, or the loan will be treated as a distribution and taxed accordingly. The interest rate will be fixed for the duration of the loan.
However, you may qualify for a lower interest rate if you are on active duty in the military. If you are on active duty, please contact firstname.lastname@example.org to determine whether you qualify for the lower interest rate.
All loans will be considered a directed investment of your account under the Plan. All payments of principal and interest by you on a loan will be credited to your account.
All loans must be adequately secured. Your vested account balance under the Plan will serve as collateral for the loan. However, a maximum of 50% of your vested account balance may be used as collateral.
You must sign a promissory note along with a loan pledge.
The Plan charges an initial loan processing fee of $100. The Plan charges an ongoing loan maintenance fee of $75 per year. Any fee may be deducted from the proceeds of the loan and/or charged to your account.
Your loan will be in default if a scheduled payment becomes 90 days overdue. Upon default, the entire balance of the loan will be immediately due and the entire balance will be treated as a taxable distribution to you. Interest on the loan, however, will continue to accrue until you have a distributable event for purposes of determining any future loan availability. In addition, your vested account balance may be reduced by the amount of the outstanding principal and interest on the loan. In other cases, this offset will not occur until you are entitled to receive benefits (for example, upon your termination of employment).