How is the maximum loan amount calculated when there is more than one

[John A]

What would the maximum loan amount be in the following situation:

1-1-99 Participan borrows $14,000 - Loan 1.

3-1-99 Repays $10,000, Outstanding Balance

$4,000.

5-1-99 Repays $3,000, Outstanding Balance

$1,000.

7-1-99 Borrows $21,000 - Loan 2.

12-1-99 Repays $5,000 - Outstanding Balance

of Loan 2 - $16,000.

Participant wants to take the maximum possible as Loan 3. What would the maximum be on:

2-28-2000

2-29-2000

3-01-2000

3-02-2000

6-01-2000

Any explanations would also be appreciated.

[Dawn Hafner]

From your message I calculate the following outstanding loan balances:

1/1/99 $14,000

3/1/99 $4,000

5/1/99 $1,000

7/1/99 $22,000

12/1/99 $17,000

For each of your dates listed, the $22,000 would be the highest outstanding loan balance in the last 12 months. It also depends on the outstanding loan balance as of the date of the third loan. We don't know this given the facts.

If when the third loan is taken the other loans are outstanding for $17,000, then if the participant has a vested balance over $90,000

they could take a maximum loan of $28,000. ($50,000-$22,000) The $90,000 is calculated by $28,000 + $17,000 = $45,000, so must have $90,000 to support this loan level.