If you are still employed, a 401(k) loan lets you borrow against your balance and pay yourself back, instead of taking a taxable withdrawal. Key terms:
Amount: minimum $1,000. Maximum is the lesser of 50% of your vested balance or $50,000.
Interest: fixed at the Prime Rate + 2%, paid back into your own account.
Repayment: through payroll deduction, over up to 5 years.
One loan at a time: You sign a promissory note before the money is sent.
If you are married, your spouse signs a consent form (included in the application).
Loans are only available if your plan’s adoption agreement includes them.