Introduction
A 401(k) loan lets you borrow money from your own retirement savings and pay it back over time. This 401(k) loan calculator shows you what that loan will cost each month, how much interest you will pay, and how much smaller your retirement savings may be later.
Enter your vested balance, how much you want to borrow, the interest rate, and the loan term. The calculator gives you your monthly payment, your total payments, your payoff date, and a full month-by-month payment schedule. It also checks the IRS limit for you, which is the lesser of half your vested balance or $50,000.
You can also flip it around. Pick "Maximum Loan Amount," type in the payment you can afford each month, and the tool tells you the largest loan that payment can cover.
The best part is the retirement impact section. It compares two paths side by side: what your account could grow to if you never took the loan, and what it could grow to if you do. That gap is the real price of borrowing, because the money you take out stops earning returns while it is gone. If you want to see how your balance builds when you leave it alone, try our 401k Calculator or the broader Retirement Calculator. The tool works the same way for 403(b) plans, since both follow the same IRS loan rules, and you can model that plan directly with our 403b Calculator.
How to use our 401(k) Loan Calculator
Fill in a few facts about your retirement plan and the loan you want. The calculator shows your monthly payment, total interest, payoff date, your IRS loan limit, and how much the loan may cost your retirement savings.
Plan Type: Pick 401(k) or 403(b). The same IRS loan rules apply to both, so the math does not change.
What do you want to solve for: Choose "Monthly Payment" if you know how much you want to borrow. Choose "Maximum Loan Amount" if you know how much you can pay each month.
Vested Account Balance: Enter the money in your plan that you fully own. This sets your loan cap, which is 50% of the balance or $50,000, whichever is less.
Loan Amount: Type how much you want to borrow. If it is over the IRS limit, the tool lowers it for you. This box is used in Monthly Payment mode.
Desired Monthly Payment: Type the payment you can afford each month. The tool works backward to find the largest loan that fits. This box is used in Maximum Loan Amount mode. A quick check with our Monthly Budget Calculator can help you pick a number you can really live with.
Annual Interest Rate: Enter your plan's loan rate. Most plans charge the prime rate plus 1%. You pay this interest back into your own account. To compare that cost against other borrowing, see our Loan Interest Calculator.
Loan Term (months): Enter how many months you will take to pay it back, or pick a preset. Most plan loans must be paid off in 60 months, unless you are buying a main home.
Expected Annual Investment Return: Enter the growth rate you expect if the money stayed invested. Many people use 7% as a long-term guess. Our Compound Interest Calculator shows how that rate builds over decades.
Current Age: Enter your age today. This shows how many years your money has left to grow.
Expected Retirement Age: Enter the age you plan to retire. It must be higher than your current age. If you are still deciding, our Retirement Age Calculator and When Can I Retire Calculator can help.
Click Calculate to see your results, charts, step-by-step math, and full amortization schedule. Click Reset / Start Over to try new numbers.
What Is a 401(k) Loan?
A 401(k) loan lets you borrow money from your own retirement savings and pay it back with interest. The money does not come from a bank. It comes out of your plan account, and your payments go back into that same account. Most 403(b) plans work the same way. Your employer's plan must allow loans, and not all of them do.
How Much You Can Borrow
The IRS sets a limit. You can borrow the lesser of 50% of your vested balance or $50,000. Vested means the part of the account you fully own, including any employer match you have earned the right to keep. So if your vested balance is $60,000, your most you can borrow is $30,000. If your vested balance is $200,000, the cap is $50,000, not $100,000.
How Repayment Works
You pay the loan back in level payments, usually taken straight from your paycheck. The IRS says most plan loans must be paid off within 5 years (60 months). There is one main exception: if you use the loan to buy your main home, your plan may allow a longer term, often 10 to 15 years. If a home purchase is the reason you are borrowing, run the numbers with our Down Payment Calculator and Home Affordability Calculator first.
The interest rate is set by your plan. A very common rate is the prime rate plus 1%. The good news is that the interest is paid to your own account, not to a lender. Our Amortization Calculator shows the same payment split for any fixed-rate loan.
The Real Cost: Lost Growth
Even though you pay yourself back, a 401(k) loan can still cost you money. The dollars you borrow leave the market. While they are out on loan, they are not earning returns. That missed growth is called opportunity cost, and it can add up over many years because of compound interest.
Example: borrowing $15,000 for 5 years means those dollars miss years of possible growth. If your account would have grown about 7% a year, the loss at retirement can be much larger than the amount you borrowed. You can test that gap yourself with our Future Value Calculator or the Investment Calculator.
Risks to Know Before You Borrow
- Leaving your job: If you quit or are let go, many plans want the full balance paid back fast, often by the tax filing deadline.
- Default: If you do not repay, the unpaid amount is treated as a withdrawal. You owe income tax on it, plus a 10% early withdrawal penalty if you are under age 59½. Our 401k Early Withdrawal Calculator shows what that would cost, and the 401k Withdrawal Calculator covers regular withdrawals.
- Double taxing on interest: Loan payments come from your take-home pay, which was already taxed. See how much of your check is left after taxes with our Take Home Pay Calculator. That money is taxed again when you withdraw it in retirement.
- Smaller contributions: Some people stop adding new money while repaying a loan. That can mean losing employer match dollars too.
When a 401(k) Loan Can Make Sense
A plan loan may be a smart choice if you need cash for a short time, have a steady job, and would otherwise use a high-rate credit card or payday loan. Compare it against a Personal Loan Calculator, a Credit Card Payoff Calculator, or a Home Equity Loan Calculator before you decide. There is no credit check, and the rate is usually low. It is a weaker choice if your job is shaky, if you are close to retirement, or if the loan would replace saving for your future. Building an emergency fund is often the better long-term fix.
Key Terms
- Vested balance: The money in your plan that is truly yours.
- Principal: The amount you borrow. Our Loan Payment Calculator turns any principal into a monthly figure.
- Amortization: The month-by-month plan showing how each payment splits between interest and principal.
- Compound growth: Earnings that build on past earnings over time. The Rule of 72 Calculator is a fast way to see how long money takes to double.
This information is for general learning only. Loan rules can differ by plan, so check your plan documents or talk with your plan administrator or a financial advisor before you borrow.