Loan help

[greg]

 

 I have gotten loans in the past and not had any problems but last week I tried to get a loan to try to pay off credit card debt and the 401(k) company says hardship only and clearly in my addendum it says there is no restrictions on my policy  no hardships can they do that? 

[ratherbereading]

What does the plan document say?   Ask your employer for the Summary Plan Description if you don't have one already.  I do have a couple of plans who allow loans only for hardship reasons.  Or maybe the plan doesn't allow for loans at all. Good luck!

[Luke Bailey]

greg, as CEB50 points out, they have to have that in the plan document and/or their separate "loan policy" document, and it should also be stated in SPD, although plan document and loan policy are more important.

[DAK]

Your request may exceed the IRS loan limit.  Keep in mind that the maximum loan amount is the lesser of your vested account balance or $50,000 reduced by the highest outstanding loan balance in your account during the prior twelve-month period.  Also, some plans impose a waiting period between paying off a loan and applying for a new loan.  Luke and CEB50 are spot on – check the plan document, SPD, and any separate loan policy.   

[Lou S.]

21 hours ago, greg said:

 

 I have gotten loans in the past and not had any problems but last week I tried to get a loan to try to pay off credit card debt and the 401(k) company says hardship only and clearly in my addendum it says there is no restrictions on my policy  no hardships can they do that? 

The short answer is yes they can. Loans are not a protected benefit and can be eliminated or restricted at any time. Whether or not they did do that is a separate question you would have to ask your plan administrator as your last documentation seems to contradict what your 401(k) company is saying.