What happens when you take a loan out agains your 401k and you leave or get laid off before the loan is paid back in full?

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You either repay it, or they take that amount out of the remaining 401k balance as the repayment.

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New tax law changed this. You have until the late filing date of the following year to repay. So oct 15th +1 year.

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And I believe that if you don’t pay it back it’s a tax penalty but you don’t have traditional debt where you owe it forever. It’s your money, you just deferred taxes on it so if you spend it now you have to pay the taxes. After the grace period.
And it’s between you and there 401k holder, your employer has nothing to do with it. Leaving mid loan is not an issue. You probably can’t roll it over to a new firm until it’s paid back or taxed, though.

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I borrowed against my 401k and lost my job a month later. The monthly repayments didn't change, I just kept paying. Don't know about the Oct 15th deadline, thought you just paid until it wad repaid.

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Don’t need the riot act about “pursuing all other options first”, would just like someone to explain the worst case scenario in layman’s terms. Thank you!

You pay back the loan.

All at once, immediately?

U leaving doesn’t change the 401k, it’s urs, not the company’s. So whatever plan u had to pay it back can continue. If I roll it over into another plan, then u may have an issue, talk to a good accountant.

Thank you to everyone who answered! Incredibly helpful and appeased a lot of my major fears.

Don't take a loan from your 401k. Read or watch Suze Orman.

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