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401k Loan Calculator

276 words Calculator
Max: $50,000

Loan Summary

Payment per period
$382.02
Total Payments
$22921.39
Total Interest
$2921.39
Opportunity Cost
$21879.81

Payment Breakdown

Balance Over Time

Calculate 401(k) loan payments, interest costs & opportunity losses with our advanced calculator. Understand repayment terms, tax implications, and retirement impact.

What Is a 401(k) Loan Calculator?

A specialized tool that estimates payments, interest, and long-term effects of borrowing from your 401(k) retirement account. It factors in IRS rules, compound interest, and opportunity costs to help you make informed financial decisions.

Key Formulas Used

1. Periodic Payment Calculation

PMT=P×r×(1+r)n(1+r)n−1PMT = \frac{P \times r \times (1+r)^n}{(1+r)^n - 1}
  • P: Loan principal
  • r: Periodic interest rate (annual rate ÷ payments/year)
  • n: Total number of payments

2. Opportunity Cost Estimate

Opportunity Cost=(Account Balance×(1+Market Return)t−(Reduced Balance×(1+Market Return)t)Opportunity\ Cost = (Account\ Balance \times (1 + Market\ Return)^t - (Reduced\ Balance \times (1 + Market\ Return)^t)
  • Assumes 5-7% average annual market return
  • t: Loan term in years

How to Use the Calculator

  1. Enter Your Balance
    Current vested 401(k) account balance.

  2. Set Loan Parameters

    • Amount (max $50,000 or 50% of balance)
    • Interest rate (typically prime +1%)
    • Term (1-15 years)

  3. Choose Repayment Schedule
    Monthly, bi-weekly, or weekly payments.

  4. Review Results

    • Payment amount per period
    • Total interest paid
    • Projected retirement impact

FAQs

❓ Will this affect my credit score?

No. 401(k) loans don’t appear on credit reports.

❓ What happens if I leave my job?

Outstanding balances typically become due within 60-90 days or are taxed as early withdrawals.

❓ Are there tax advantages?

Interest paid goes back into your account, but repayments use after-tax dollars.

Terminology Explained

TermDefinition
Vested BalanceThe portion of your 401(k) you fully own (employer matches may have vesting schedules).
Double TaxationRepayments are made with after-tax dollars, then taxed again upon withdrawal in retirement.
Plan SponsorYour employer or entity managing the 401(k) plan rules.

Design Notes:

  • SEO Optimized: Target keywords like “401k loan payment calculator” naturally integrated
  • Visual Hierarchy: Clear sections with emoji bullet points for FAQs
  • Technical Depth: Formulas use proper LaTeX formatting for technical audiences
  • Mobile-Friendly: Tables and math render correctly on all devices
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