How many times can you borrow on your 401k?

Question

My husband and I borrowed against his 401k twice in the past 10 years. Is there a limit to how many times you can borrow on your 401K if it is for family emergency or financial hardships?

Answer 1

Yes each plan is different. Some do not even allow borrowing.

Answer 2

As above, each company has its own set of rules.

In general, most plans have a rule about how many loans can be open at the same time (1 - 2) without consolidation ("refinanced") and how many times a loan can be consolidated (1-2) and/or within what period of time (1-3 years).

If you have paid off all the previous loan(s), the simple answer to your question is probably that you can borrow again.

Answer 3

Your husband would need to ask the company how many times he can borrow money from his 401k.  Each company is different.

Answer 4

My company allows you to take one loan a year, up to 1/2 the amount in the account with a maximum limit of $50,000. The maximum time is 5 years. I think there is a limit of 4 loans.

I think there is emergency withdrawals, but it likely be heavily taxed, so the loan would be preferable.  

Answer 5

All companies are different, but I beleive that if your past loans are paid off, you can borrow again.  

Answer 6

Yes, each company has it's own rules with regards to loans.  Most allow only one open loan at a time, and that loan is usually not to exceed a certain amount of the value (ie. half).  There are also IRS rules, but they apply more to withdrawals.  You can only withdraw for a handful of reasons (such as purchase of a new home, death, qualified education, etc.).  Have your husband call his human resource or payroll department.  They should be able to explain all of his options to him.

Answer 7

The only limit is how many loans you can have outstanding at any one time.  You can borrow as may different times as you'd like.  

Answer 8

I have borrowed several times to make improvements

on my house.

Why not let the interest, go back to you, into your 401K

rather than a bank

To borrow is fine. To take a distribution (withdrawal)

There will be a 20% tax, and a 10% penalty involved. <}:-})