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View Full Version : Repayment of 401k loan


need 401k help
Sep 22, 2007, 10:33 AM
I am in the process of leaving my job. I am 100% vested in my 401k plan. I currently have a loan on it and have been paying it back every pay period but still owe on it. If I roll over my 401k do I still owe on the loan?

Thanks in advance for the help

ScottGem
Sep 22, 2007, 10:40 AM
You will need to repay the loan before you take a distribution. Otherwise the balance will be considered an inservice withdrawal and you will owe a 10% penalty and it will be added to your taxable income. If your new job has a 401K, You can get a short term loan, pay off the 401K, rollover the balance into your new company's plan and take a loan from the new co to repay the short term loan. I've dones this with 2 job changes.