I have a question on 401k loans. How is the principal repayment reinvested? Monthly? When the loan is fully paid? Do they cash out that portion of my investments or just use then as collateral?

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Generally speaking they do cash out your investments and you “pay yourself back”, including the agreed interest rate for the loan. I would assume they would allow you to reinvest the paid back portion.

Also note that if you lose your job, the loan is called in and you must pay it back in full immediately, to avoid taxes and penalties.

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Thanks!

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Thanks in advance.

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