A participant is permitted to borrow up to 50% or $50,000 of their account for a loan. 50% of the account is used a loan collateral. Should the 50% loan collateral be maintained at all times? Example: A participant has an account balance of $10,000 and takes out a $5,000 loan. The $5,000 left is the loan collateral. Can the participant then immediately take a hardship for $3,000 or should they wait until they either pay down the loan or make additional contributions to give them additional funds over the collateral amount?
