401(k) Resource

401k.org has resources for learning about 401(k) plans. Among them are a series of articles, incuding this one on Plan Loans.

Excerpt:
"One of the benefits offered by most 401(k) plans is the ability to borrow against your retirement sav-
ings in times of need. Currently, about 25 percent of employees eligible for a plan loan have taken
advantage of the option, with an average outstanding loan balance of about $7,400. Loans provide two
special advantages:
1. If your plan has a loan program, you have the security of knowing that your money is
available "just in case." This means you can comfortably make the maximum contribution
commitment to your plan without worrying if you might need those funds later.
2. Loans help prevent you from depleting your retirement savings when financial crisis occurs.
If your plan offers loans, you will be required to take a loan first before you can take a
distribution because once money is taken as a distribution, it cannot be replaced.
Let's assume you have an unexpected crisis and you need your money. What should you know?
Loan Basics
• Plans typically allow you to borrow up to 50 percent of your vested plan assets, up to $50,000,
less the amount of any outstanding plan loans.
• Plan loans usually have a minimum amount requirement, which is typically $1,000.
• Loans may be taken from all vested funds, which includes your rollovers from other qualiplans.
• In nearly all cases, you must repay your loan in equal payments over a five-year period.
• In rare cases, your payment period may be longer when the loan is for your primary
residence."