What are the rules about borrowing from your 401K?

Answer by  tamarawilhite (17883)

You have to pay it within 60 days if you terminate your employment before paying the whole loan back. Otherwise the money taken out can be taxed as income. If still employed, you have to pay back the outstanding loan on whatever terms your employer has set. Many companies only allow a 1-5 year loan period.

Answer by  Ariesteddybear (67)

when borrowing from a 401K you have to be very careful cause the average repayment time is 5 years. the only thing that can make this time significantly longer is if it's to purchase a home