What happens to my 401(k) loan if I am no longer with the company?

If you are no longer with your company, you will need to determine what you want to do with your outstanding loan balance before distributing your remaining account balance.

  • Firstly, you can pay off the loan in full no later than 90 days from your date of termination with the company and avoid a taxable distribution. Be sure to contact our participant support team to request an exact outstanding loan balance and inform our team once you’ve mailed the check.

Check Payable Details: BTC for GDL [Your Guideline Account Number] FBO [Your Name]

Check memo line: Loan repayment 

Where to mail the check: 

Benefit Trust Company 

PO Box 12765 

Overland Park KS, 66282 

  • Secondly, you can have the total outstanding balance treated as a taxable distribution to you via loan offset. If you have a loan balance after 90 days of being dismissed, your loan will automatically be considered offset or “defaulted”. The amount of your outstanding loan balance will be reported on a 1099-R as a taxable distribution to you and may be subject to early withdrawal tax penalty of 10% if you are under the age of 59 ½. If you have a qualified plan loan offset, you will have until your tax filing due date (including extensions) for the tax year during which the offset occurs to rollover your outstanding loan balance to a new provider and avoid taxes. For more information on loan offsets, please see our Tax Notice here for more information.
  • Or third, if you are working for a new employer, and your new company’s plan accepts loan rollovers, you may be able to rollover the loan directly to your new employer’s plan. Please note that loans from one Guideline account cannot be rolled over to another Guideline account for continued servicing.
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