2026 IRS limit: $24,500 · 50+: $32,500 · 60–63: $35,750

401k Loan Calculator

Updated August 2026 — reflects the IRS §72(p) loan limits.

Borrowing from your 401(k)? See your monthly payment, the total interest you’ll pay back to yourself, the most you’re allowed to borrow, and the market growth you give up while the money is out.

Monthly payment
$0

Total interest (to yourself)
$0
Total repaid
$0
If left invested
$0
Most you can borrow
$0
Sets your limit: the lesser of $50,000 or 50% of this
Plans usually charge around the prime rate plus 1%
Most loans: up to 5 years (longer for a primary home)
What the borrowed money might have earned if left invested

The real cost of a 401(k) loan

A 401(k) loan isn’t free money, but it isn’t as costly as many calculators claim. You pay interest to yourself, not a bank, so the principal and interest both return to your account. The real cost is subtler: the borrowed money misses market growth while it’s out, and the interest is repaid with after-tax dollars.

Here’s the honest version. If your investments would have earned more than your loan rate, you give up that difference on the money while it’s borrowed. If the market underperforms your loan rate over the term, a loan can actually leave you slightly ahead. Either way, you avoid the 10% penalty and income tax that an outright early withdrawal triggers — which usually makes a loan the cheaper of the two ways to tap the account.

A worked example

Borrow $15,000 at 8% over 5 years. Your payment is about $304 a month, and you repay roughly $18,250 in total — about $3,250 of it interest, all deposited back into your own account. Meanwhile, if that $15,000 had stayed invested at 7%, it would have grown to about $21,000 over the same five years. Your repayments are reinvested too, so the true gap is smaller than that headline — but you can see why borrowing at a rate below your expected return still has a cost.

Rules and risks before you borrow

The IRS lets you borrow the lesser of $50,000 or 50% of your vested balance, repaid over up to five years. The biggest risk isn’t the interest — it’s your job. Leave or lose it before repaying and the balance can become a taxable distribution, plus a 10% penalty if you’re under 59½.

  • Borrowing limit. The lesser of $50,000 or 50% of your vested balance, with a $10,000 floor. The $50,000 cap is reduced by your highest loan balance in the prior 12 months.
  • Repayment. Level, amortized payments at least quarterly, within five years — longer only for a primary-home purchase. Usually taken straight from your paycheck.
  • Job change is the trap. If you separate, the balance is typically due by your next tax-filing deadline. Unpaid, it’s a deemed distribution: ordinary income tax plus the 10% penalty under 59½.
  • Double consideration on interest. You repay with after-tax dollars, and that money is taxed again at withdrawal in retirement — a real but often-overstated drawback.

Before borrowing, it’s worth checking what leaving the money untouched would grow into on the main 401k calculator, and comparing against the cost of an early withdrawal.

401(k) loan — FAQ

How much can I borrow from my 401(k)?
The lesser of $50,000 or 50% of your vested balance, with a floor that allows up to $10,000. The $50,000 cap is reduced by your highest loan balance in the past 12 months, and your plan may set lower limits.
Do I pay interest to myself on a 401(k) loan?
Yes — principal and interest both go back into your own account. The cost is the market growth the money misses while it’s out, and that interest is repaid with after-tax dollars.
What happens if I leave my job with a loan outstanding?
The balance is generally due by your next tax-filing deadline. If unpaid, it becomes a deemed distribution — taxed as income, plus the 10% penalty if you’re under 59½. This is the biggest risk of borrowing.
How long do I have to repay?
Up to five years with level payments at least quarterly, usually by payroll deduction. Loans to buy your primary home can run longer. Repaying faster cuts interest and shortens the time out of the market.