Loan amortized incorrectly

[JKW]

I recently took over a plan and while reviewing their loans, I discovered two loans were done by the prior recordkeeper as weekly repayments, the plan has a bi-weekly payroll. Therefore the weekly payment amounts were set up but paid only bi-weekly. Loan #1 should have been paid up already - it has a very small balance left - $250. The 2nd loan still has a significant balance (8,000) and is supposed to be paid up by 2015 - but right now won't pay until almost 2020.

I think the loan that is due in 2015, can be paid back now and then the participant can take out a new loan with the correct amortization schedule. Is there thing else that needs to be done for this?

In regards to the loan that is technically in default, any advice on this?

[masteff]

Thoroughly document the administrative error so you have a paper trail showing it was the plan's mistake and not the participant's.