Cobras59 Posted September 14, 2022 Share Posted September 14, 2022 For participant loans that are being refinanced, can the maturity date go ever go past 5 years from the original loan? https://www.law.cornell.edu/cfr/text/26/1.72(p)-1, 26 CFR Section1.72(p)-1 Q-20, has that if the replace loans satisfies Section 72(p)(2) and this section determined as if if the replacement loan consisted of two separate loans; to the extent the amount of the replacement loan exceeds the amount of t he replaced loan, a new loan is amortized in substantially level payments over a period not later than the last day of latest permissible term of the replacement loan. So if a refinanced loan is less than the available amount is it treated as a new separate loan and has a maturity date from the refinanced loan date and not the date of the original replaced loan? Q-10 makes it sounds like it can. Is there any other clearer direction than Q-20? Link to comment Share on other sites More sharing options...
Gilmore Posted September 15, 2022 Share Posted September 15, 2022 If the participant's balance can support the combined amount of the new loan created by the refinance, plus the balance of the loan being refinanced, you can start a new 5 year term for the new loan. Here is a good article: http://employeebenefitplanaudit.belfint.com/participant-loan-refinancing/ Luke Bailey and ugueth 2 Link to comment Share on other sites More sharing options...
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