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    need 401k help Posts: 2, Reputation: 1
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    #1

    Sep 22, 2007, 10:33 AM
    Repayment of 401k loan
    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's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #2

    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.
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