About the 401(k) Loan Calculator
This 401(k) loan calculator shows what borrowing from your retirement plan really costs. Enter your vested balance, the amount you want to borrow, the plan’s interest rate and the repayment term to get the payment taken from each paycheck, the total interest you pay back into your own account, and the IRS maximum loan for your balance.
It also estimates the hidden cost: the money you borrow stops earning market returns while it is out of the account. The calculator compares your projected balance at the end of the loan term with and without the loan, so you can weigh a 401(k) loan against a personal loan, a HELOC or waiting.
The IRS limits a 401(k) loan to the lesser of $50,000 or 50% of your vested balance (or up to $10,000 if half your balance is less than that, when the plan allows), and most loans must be repaid within five years unless used to buy a main home. Interest is paid with after-tax dollars. If you leave your job, the outstanding balance is usually due by your tax-return deadline or it becomes a taxable distribution.
With the default inputs, the payment per paycheck is $277.07. Change any value above to recalculate instantly.
How to use the 401(k) loan calculator
- 1Enter your vested 401(k) balance and the amount you want to borrow.
- 2Enter the loan interest rate from your plan (often prime + 1%).
- 3Choose the repayment term and how often you are paid.
- 4Set the return you expect the investments to earn.
- 5Compare the payment, maximum loan and the cost to your retirement balance.
Formula and method
A 401(k) loan amortizes like any installment loan: the payment per paycheck comes from the standard amortization formula using the loan rate divided by the number of payments per year. Every payment — principal and interest — goes back into your 401(k).
To estimate the retirement cost, the calculator grows your full balance at the expected return for the loan term (no-loan scenario). In the loan scenario, only the balance minus the loan is invested; each repayment is reinvested as it arrives, and any loan still owed counts at its outstanding value. The difference is what borrowing costs your account. The maximum loan is the lesser of $50,000 and 50% of the vested balance, with a $10,000 floor.
- L
- Loan amount
- i
- Interest rate per payment period
- N
- Total number of payments
- k
- Payments per year (26 biweekly, 24 semi-monthly, 12 monthly)
Worked examples
$30,000 loan over 5 years, paid biweekly
At 7.5% repaid over 130 biweekly paychecks the payment is about $277 and total interest is about $6,018 — paid into your own account. Because the $30,000 earns 7.5% instead of an expected 8% for five years, the account ends roughly $508 lower than if it had stayed invested.
Monthly repayment on a $20,000 loan over 3 years
With $60,000 vested you can borrow up to $30,000. Repaying $20,000 at 9% over 36 months costs $635.99 a month and about $2,896 in interest.
Small balance using the $10,000 floor
Half of a $16,000 balance is only $8,000, but plans may allow up to $10,000 in this case. Repaying $10,000 at 7.5% over 24 months costs about $450 a month and $800 of interest.
Frequently asked questions
How much can I borrow from my 401(k)?+
The IRS allows the lesser of $50,000 or 50% of your vested balance. If half your balance is under $10,000, a plan may let you borrow up to $10,000. If you had another plan loan in the past 12 months, the $50,000 cap is reduced by the amount your highest loan balance in that period exceeds the balance you still owe.
What happens to a 401(k) loan if I leave my job?+
Your plan can require the outstanding balance to be repaid when you leave. If it is offset against your account instead, you have until your tax-filing deadline (including extensions) for that year to roll the offset amount over to an IRA or another plan; otherwise it is treated as a distribution, taxed as income, and may incur a 10% penalty if you are under 59½.
Is 401(k) loan interest paid to myself?+
Yes, the interest goes back into your own account, which is why the loan rate is not a true cost. The real cost is the investment growth you miss on the borrowed money, and the interest is repaid with after-tax dollars that will be taxed again at withdrawal.
How long do I have to repay a 401(k) loan?+
General-purpose loans must be repaid within five years with payments at least quarterly, usually by payroll deduction. Loans used to buy your primary residence can have longer terms, often 10 to 25 years depending on the plan.
Is a 401(k) loan better than a personal loan?+
A 401(k) loan needs no credit check and the interest goes to you, but it reduces growth, is due quickly if you lose or change jobs, and some people stop contributing while repaying. A low-rate personal loan can be cheaper when markets rise strongly.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.