401(k) loan calculator, 2026 rules
What a 401(k) loan really costs you
The payment is the easy part. Put in your numbers to see the growth you give up, the tax that comes later on the interest, and the bill that lands if you leave your job before it's paid off.
Earnings statement
401(k) loan repayment, after-tax deduction
$140.17 out of each paycheck, 130 times
| Total you repay | $18,222 |
|---|---|
| Of that, interest (paid into your own account) | $3,222 |
| Pay before tax it takes to cover one payment | $179.71 |
| Tax you'll likely owe later on that interest | $709 |
| Your 401(k) when the loan is paid off, no loan | $80,294 |
|---|---|
| Same date, with the loan | $81,351 |
| Ahead with the loan | $1,057 |
| The difference at age 65, at the same return | $3,391 |
If you leave after 24 months
You'd still owe $9,707. To keep it from being taxed, repay it before the plan offsets it, or deposit the offset amount in an IRA or new plan by the due date of your 2028 tax return (April 15, 2029, or October 15 with an extension). Otherwise it's treated as a withdrawal:
| Income tax at your rates | $2,136 |
|---|---|
| 10% early withdrawal tax | $971 |
| Cost of not repaying | $3,106 |
Estimates from your inputs, not tax advice. Tax uses your marginal rates; the real bill depends on your whole return.
Then check the other ways to get the money
Loan vs. hardship withdrawal vs. personal loan vs. HELOC
The same amount of cash, priced four ways with your tax bracket and your quotes.
What happens if you leave your job
The loan comes due. How the offset works, and the deadline most people don't know they have.
The 2026 loan rules in one page
The $50,000 and 50% limits, the 5-year rule, the home-purchase exception, and missed payments.
Using retirement money to start a business
A 401(k) loan, a ROBS, or an SBA loan. What each one costs and what you're risking.
Should you borrow from your 401(k)?
It can be the cheapest money you can get, and it can also be the most expensive. You can usually tell which before you sign.
Leaving the job is the big risk
Leaving is what turns a 401(k) loan into a tax bill. If you quit, get laid off or get fired, most plans want the balance back. If you can’t come up with it by your tax filing deadline (for a 2026 offset, April 15, 2027, or October 15, 2027 with an extension), the unpaid amount is taxed as income, and if you’re under 55 in the year you leave there’s a 10% additional tax on top. On a $15,000 balance in the 22% federal bracket, that’s $4,800 before any state tax (worked example). Set “What if I left this job” in the calculator above to see your number.
Don’t pay for it by cutting contributions
The loan payment comes out of take-home pay. If you make room for it by pausing your contributions, you lose the contributions and any employer match, and that often costs more than the loan itself. Put the amounts in the calculator’s second section and watch the gap at 65.
The market decides the rest
While it’s lent to you, the borrowed money earns your loan rate instead of whatever your investments do. In a flat or falling market that’s a good trade. In a strong year it isn’t. Nobody knows which one you’ll get, which is why the calculator lets you set the return yourself.
What the calculator counts that most don’t
The interest isn’t the cost, because you pay it to yourself. Here’s what the calculator counts instead.
- The growth gap. Your balance on the payoff date with the loan, next to the balance with no loan, using the return you choose. Repayments go back in as they’re made, so they start earning again right away.
- Tax on the interest, later. You repay with after-tax pay into a pre-tax account, so the interest gets taxed again when you withdraw it. That’s a real cost next to not borrowing. Next to a personal loan it isn’t, because that interest is gone entirely. The full arithmetic is in is 401(k) loan interest taxed twice?
- The paycheck view. Your payment per check, and how much gross pay it takes to cover it.
- The exit bill. What you’d still owe if you left after a set number of months, the deadline to repay or roll it over, and the tax and penalty if you can’t.
It runs entirely in your browser. Nothing you type is sent anywhere.
When the numbers usually point elsewhere
If you’d need to stop contributing to afford the payment, or you think there’s a real chance you’ll change jobs in the next few years, compare it with a personal loan before you decide. The comparison tool puts both side by side with a hardship withdrawal and a HELOC, and you can check a personal loan rate to plug in a real number.
If you’re borrowing to buy a home, the 5-year limit doesn’t apply and mortgage underwriters treat the loan differently. Buying a house with a 401(k) loan covers both.
Questions people ask
How much can I borrow from my 401(k)?
Up to half your vested balance, capped at $50,000, under IRC 72(p)(2)(A) as it stands for 2026 (the dollar figures aren't indexed). If half your balance is under $10,000, the tax law allows a loan up to $10,000, but many plans don't offer that. The $50,000 cap shrinks if you've had another plan loan in the past 12 months, and your plan can set a lower limit or offer no loans at all.
How long do I have to pay back a 401(k) loan?
Five years at most, with payments at least every quarter (most plans take them from every paycheck). A loan used to buy your main home can run longer; your plan sets how long.
Is the interest on a 401(k) loan wasted?
No, it goes back into your own account, though it's taxed again when you eventually withdraw it. The bigger cost is usually the growth the borrowed money misses while it's out of the market.
What happens to my 401(k) loan if I quit or get laid off?
Usually the balance comes due and, if unpaid, is offset against your account. If it's a qualified plan loan offset (one caused by leaving the job, within 12 months), you have until your tax filing deadline for that year, including extensions, to roll the amount over and avoid the tax. That deadline comes from IRC 402(c)(3)(C), added by the Tax Cuts and Jobs Act for offsets from 2018 on; other offsets get 60 days.
Does a 401(k) loan show up on my credit report?
Plans don't generally report loans to the credit bureaus, because repayment comes out of your paycheck. That's plan practice rather than a legal rule, and the law does let a plan consider your credit when it decides whether to lend. Most don't.
Price the alternative before you borrow
A personal loan leaves your retirement money invested. Check a rate with a lender and put it next to your 401(k) loan.