In certain circumstances, Guideline permits you to take a loan against your 401(k) balance. You can review applicable loan fees within your Terms of Service document under the Individual Fees section here. While we understand you may find yourself in a situation where you need to take money out of your 401(k), we do discourage taking a loan unless you have already exhausted other alternatives, as you will be directly cutting into your retirement savings.
Should you choose to move forward, and your loan is approved, you will have to pay back the loan with interest (1 percentage point above the prime rate). Please note that all interest goes directly back into your account for your benefit.
Before requesting a 401(k) loan, it’s important to determine if you are eligible:
- You are employed with the company sponsoring your Guideline plan
- The minimum amount requested is $1,000
- The maximum loan amount you can request is 50% of your vested balance, not exceeding $50,000, minus the difference between the highest outstanding balance of any additional loans in the past 12 months and the outstanding balance of loans from your plan on the date the loan is made
- You currently have no outstanding loans with Guideline
Loans must be repaid within 5 years or 10 years if for the purchase of a primary residence. For loan terms over 5 years, Guideline can accept the following supporting documentation along with the submitted request:
- A copy of a purchase agreement signed by the buyer and seller including the closing date and balance of the purchase price
- or, A mortgage contract signed by seller and buyer
If you would like to payoff your outstanding loan before requesting a new loan, please reach out to our participant support team for next steps.
For more information, you can review your Loans page within your participant dashboard. If you qualify to take out a 401(k) loan, please see the following helpful article How do I request a 401(k) loan?