What date is used for start of maximum 5-year repayment period for a p

[John A]

When determining the maximum 5-year repayment period for a participant loan, does the 5-year period start on the day of the first payment, on the origination date of the loan, or on some other date?

[Richard Anderson]

I use the date of the check to the participant.

[Alf]

We also go by the date of the check because that is the date the loan starts for interest accrual in our case. It sounds like the date the loan starts (and interest accrual begins) should be the date the 5 year period begins, whenever that is in the case of your legal documentation.

[Guest 1950]

I asked the same question of the reg-writers when the 72(p) regs were in process. Too hard for them. Seems strange and unfair that so much turns on a very specific period of time that no one can tell you when it starts.

My approach: Have all loan checks sent to the plan administrator, who then delivers check to participant/borrower and documents date/time of delivery and simultaneously initiates payroll withholding of payments. Rationale: Shouldn't a loan be considered made when the funds are made available, not when they processed the check? Would you pay a bank interest starting from a date before you got the money? Surely that would violate some law on consumer lending and if so, is the loan really "enforceable"?